Multistate Bar Examination Practice Question

The correct answer is that the federal court should apply the tortious interference law of the state whose choice-of-law rules indicate which state’s substantive law applies. This principle arises from the Erie doctrine and its progeny, including Klaxon Co. v. Stentor Electric Manufacturing Co., which requires federal courts in diversity cases to apply the substantive law of the state in which the federal court is located. This includes applying the forum state's choice-of-law rules to determine which state’s substantive law applies to the dispute. Federal common law (incorrect answer) is not used to decide state-law substantive issues in diversity cases. Similarly, while the breach may feel significant, determining which state’s law applies does not hinge on the geographic location of the breach. Finally, the court does not base its decision on the plaintiff’s preference for a particular state law, as that would violate the Erie doctrine’s requirement of substantive law neutrality.