In a federal diversity case, which of the following governs substantive legal issues?
State substantive law
Federal procedural law
A blend of federal and state substantive law
Federal substantive law
In federal diversity cases, under the Erie doctrine (derived from Erie Railroad Co. v. Tompkins), federal courts must apply state substantive law to ensure outcomes would be similar to what would occur in state courts, thereby promoting fairness and discouraging forum shopping. Federal procedural law, however, continues to govern procedural issues. The distinctions reflect the goal of maintaining a balance between federal and state legal structures. Answers suggesting that federal substantive law applies are incorrect because the Erie doctrine mandates applying state substantive law, even in the federal system.
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