We all remember the twin aims of the Erie rule from first-year civil procedure. A federal court sitting in diversity must use forum state law if it is necessary to avoid "forum shopping" and the "inequitable administration of the laws." This Article offers a reading of the twin aims and a systematic analysis of their proper role in federal and state court. I argue that the twin aims apply in diversity cases not because they protect state interests, but because they serve the federal purposes standing behind the diversity statute. So understood, they are about separation of powers, not federalism. Through the twin aims, state law is incorporated into federal procedural common law in order to serve federal interests.
This reading does not merely have important consequences for diversity cases. It also has an impact on the role of the twin aims outside diversity. If the twin aims have their source in the purposes standing behind the congressional grant of jurisdiction, rather than respect for state interests, the fact that a federal court entertains a state law action is neither a necessary nor a sufficient reason for the twin aims to apply. The twin aims might apply to federal courts when entertaining federal causes of action. Conversely, they might not apply to a federal court when entertaining state law actions under jurisdictional statutes other than diversity.
I therefore examine four jurisdictional scenarios in order to assess the role of the twin aims in each: a federal court entertaining a federal cause of action, a state court entertaining a federal cause of action (sometimes called reverse-Erie), and a federal court entertaining a state law action under supplemental jurisdiction and under bankruptcy. In the course of my argument, I suggest a resolution to the current circuit split about whether a federal court sitting in bankruptcy should use forum state choice-of-law rules. I also argue that the Supreme Court has wrongly assumed that the twin aims apply in a reverse-Erie context. As a result, it has improperly limited state courts’ powers when entertaining federal civil rights actions — most recently in Haywood v. Drown, 556 U.S. 729 (2009).
This Article offers an original justification of the twin aims in diversity cases, and the first comprehensive explanation of their role in a variety of other jurisdictional contexts.