Tenth Circuit Holds Federal Rules of Evidence Not Subject to Erie Doctrine’s Substance/Procedure Distinction

BNA’s United States Law Week reported in Vol. 75, No. 19 (Nov. 21, 2006) on the case Sims v. Great American Life Insurance Co., --- F.3d ----, 2006 WL 3200866 (10th Cir. Nov. 7, 2006). Here is an excerpt from the case:

This case presents us with a classic civil procedure question--in the face of a conflicting state statute, when does a federal court sitting in diversity apply federal law? This question, of course, invokes the Supreme Court's seminal decision in Erie Railroad v. Tompkins and the landmark trilogy which followed. See Guar. Trust Co. v. York, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945) (creating the outcome determination test); Byrd v. Blue Ridge Rural Elec. Coop., 356 U.S. 525, 78 S.Ct. 893, 2 L.Ed.2d 953 (1958) (holding that the outcome determination test is not dispositive in the face of countervailing federal interests); Hanna v. Plumer, 380 U.S. 460, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965) (holding Erie inapplicable to the Federal Rules of Civil Procedure). Collectively, the "broad command" flowing from these cases requires federal courts "to apply state substantive law and federal procedural law." Hanna, 380 U.S. at 465. However, the sweep of this broad command is limited--only federal common law is governed by the Erie doctrine; congressional acts and the Federal Constitution fall outside its scope.

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In sum, because Erie does not apply to acts of Congress, the substance/procedure dichotomy embodied in that doctrine is inapplicable to the Federal Rules of Evidence as originally enacted. Further, because an act of Congress is subject to neither the Rules Enabling Act nor the Rules of Decision Act, these Acts do not work to limit the applicability of the unamended Federal Rules of Evidence in the face of conflicting state law.

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Where a state law excludes certain evidence in order to effect substantive policy considerations, Rule 401 acts to exclude the evidence since the proposition for which the evidence is submitted is not properly provable and, therefore, irrelevant to the claim. See Huff v. Shumate, 360 F.Supp.2d 1197 (D.Wyo.2004) (holding that although the Federal Rules of Evidence apply, the Rules nonetheless bow to state substantive policy based on the relevancy requirement of Rules 401 and 402); see also Jack B. Weinstein & Margaret A. Berger, Weinstein's Federal Evidence, § 401.04[3] [b] (Joseph M. McLaughlin ed.2006). For example, state law defines the elements and defenses of a cause of action in a diversity case. If, in such a case, a defendant proffers evidence supporting a defense that is no longer permitted by state statute, that proffer is of no consequence to the action and therefore not properly provable.

In sum, although we find that the Federal Rules of Evidence are not subject to Erie's substance/procedure distinction, this distinction still has meaning in making evidentiary determinations in federal diversity cases.

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