Commercial Litigation and Arbitration

Erie May Trump Deferral to Federal Precedent Construing State Law

From Rutherford Columbia Gas, 575 F.3d 616 (6th Cir. 2009) (dissenting opinion):

In certain cases, our "duty" to properly determine and apply state law comes into conflict with the interests that normally would support our deferring to prior precedent. In such cases, some courts have recognized that the obligation to properly determine state law is more important than the general dictate to defer to prior federal precedent construing state law. See United States v. Maness, 23 F.3d 1006, 1008-09 (6th Cir. 1994) (refusing to follow Fourth Circuit's interpretation of North Carolina state law because "the Fourth Circuit did not follow a contrary prior state supreme court decision" even though "we would usually defer to the Fourth Circuit's prediction of an issue of first impression regarding North Carolina state law"); Factors Etc., Inc. v. Pro Arts, Inc., 652 F.2d 278, 283 (2d Cir. 1981) (emphasizing that prior federal determinations of state law should be followed "for the benefit of both the orderly development of state law and fairness to those subject to state law requirements," but acknowledging that prior federal interpretations may be disregarded where "prior state court decisions had been inadvertently overlooked by the pertinent court of appeals").

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