This article previews the issues and arguments in Salve Regina College v. Russell, on the Supreme Court’s 1990-91 appellate docket. The issue presented in Salve Regina College is whether, on appeal, a federal appellate court should defer to a federal district court judge's determination of unsettled state law or whether the litigants are entitled to a fresh consideration of the question.
In 1938 the Supreme Court in Erie R.R. v. Tompkins, 304 U.S. 64 (1938), declared that there was no general federal common law and that the law to be applied by federal courts was the law of the state. Easier said than done. More than 50 years later the federal courts are still fine-tuning Erie doctrine, and this term the Court is being asked to resolve yet another nuance.
The competing views on the appropriate standard of review are simply drawn. Four arguments favoring or requiring a fresh or de novo determination of applicable law on appeal: (1) the appellate courts do not hear evidence and therefore are better able to concentrate on pure legal questions; (2) three-judge appellate panels reduce the risk of error and arc able to make determinations of state law in a more contemplative, deliberative fashion than are district court judges; (3) the precedential value of appellate court determinations of state law confers a responsibility to give de novo review to all determinations of state law; and (4) such de novo review allows the Supreme Court to conserve its resources for important questions of national scope.
On the other hand, proponents of deferential review contend that a federal district judge sitting in a particular forum is most likely to have practiced law in that state and therefore to be in the best position to make determinations about applicable state law. In addition, these proponents argue that the deferential standard is necessary to conserve judicial resources: If de novo review is required, then a great temptation will exist to appeal every determination of state law in order to obtain a second (perhaps more favorable) ruling.
The Supreme Court's decision in Salve Regina College is of great importance for the conduct of federal diversity-based cases. The Supreme Court is faced with two stark choices and little middle ground: either it will affirm the deferential standard of review, or it will mandate a new requirement of appellate de novo scrutiny of every district judge's determination of state law. If the Court chooses the latter, then it is likely that many more such state-law determinations will be appealed, giving litigants more bites at the applicable law apple.
Linda S. Mullenix, Eire On Appeal: Deferential or De Novo Review?, 1990-91 Preview of U.S. Supreme Court Cases 97.