Wrong Court

Author:Mr James Beck
Profession:Reed Smith

On practically no issue has this Blog been more insistent than on the principle of Erie conservatism when federal courts sitting in diversity undertake to "predict" state tort law. Our posts on this subject go back to 2006. At that time, we said:

In both of these decisions, novel questions of state law, involving state statutes intended to reduce tort liability, were answered so as to expand liability in ways that no state court had endorsed. Under established principles of federalism, that should not have happened. The Supreme Court made clear in Day & Zimmerman, Inc. v. Challoner, 423 U.S. 3 (1975), that "[a] federal court in diversity is not free to engraft onto those state rules exceptions or modifications which may commend themselves to the federal court, but which have not commended themselves to the State in which the federal court sits." Id. at 4.

We accompanied the Supreme Court precedent with authority for the same proposition from "every Court of Appeals." We again addressed Supreme Court precedent here, including:

[A] federal court is not free to apply a different rule however desirable it may believe it to be, and even though it may think that the state Supreme Court may establish a different rule in some future litigation.

Hicks v. Feiock, 485 U.S. 624, 630 n.3 (1988).

Since then, we've returned to this proposition time and again - addressing it in the context of First Circuit, Third Circuit, Fourth Circuit, Fifth Circuit, Sixth Circuit, and Eleventh Circuit law − even proposing legislation to codify the Supreme Court's position.

Now we're aware of another appeal that has put the Erie conservatism principle front and center. We've mentioned before the winning streak that Amazon.com was on in product liability cases, and wondered whether that online business model could eventually affect the market for prescription drugs. Well, the case that prompted that post, Oberdorf v. Amazon.com, Inc., 295 F. Supp.3d 496 (M.D. Pa. 2017), was recently reversed, 2-1, by a Third Circuit panel. See Oberdorf v. Amazon.com Inc., ___ F.3d ___, 2019 WL 2849153 (3d Cir. July 3, 2019) ("applying" Pennsylvania law).

Until then, no court anywhere had found Amazon (or similar entities) to be a product liability "seller" for purposes of strict liability. See Fox v. Amazon.com, Inc., ___ F.3d ___, 2019 WL 2896326, at *7 (6th Cir. July 5, 2019) (applying Tennessee law); Erie Insurance Co. v. Amazon.com, Inc., 925 F.3d 135, 141-42 (4th Cir...

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