Predicated Predictions: How Federal Judges Predict Changes in State Law

By Connor Clerkin

Erie v. Tompkins requires federal courts to apply state substantive law in diversity suits. In determining the content of the relevant state law, federal judges tend to rely on decisions made by the highest court of the relevant state. Yet decisions subsequent to Erie required federal judges to do more than mechanically apply prior state law decisions; rather, these judges predict how the highest court of the state would rule on the legal issue at that time, thus reducing the possibility of divergent outcomes due to forum. This rule results in the occasional federal court prediction that, if faced with a given legal issue, a state’s highest court would deviate from its previous decisions.

The purpose of this Note is to collect and analyze those cases in which federal judges predict deviations from established state law. This Note compiles and analyzes each case in which a federal court has predicted a change in state law and follows up with the subsequent state high court decision that either verified or rejected that prediction. This Note then categorizes and tallies the various analytical methods used by federal judges in making their decisions, with a table of cases and their utilized methods collected in Appendix I. First, this Note reviews the mid-century Supreme Court decisions that led to the modern predictive method and demonstrates how each federal Circuit Court utilizes that method. Next, this Note discusses problems with the predictive method addressed by scholarship and illustrated with examples from the collected cases. Finally, this Note analyzes the cases in which federal courts predict deviations from established state law and suggests that to improve the verification rate of their predictions of change, federal courts should predict such a divergence only when capable of making certain kinds of arguments.