Editor's Note: This Essay is Part III of an exchange between Professors Donald Earl Childress III and Michael Steven Green on international law and the Erie doctrine. Part I of the exchange is available here, and Part II is available here.
If recent trends continue, it is likely that U.S. federal district courts sitting in diversity or alienage will confront transnational choice of law issues in a significant number of cases in the years to come. Currently, when resolving these issues, federal district courts unflinchingly follow state choice of law rules to determine the governing substantive law (U.S. state or foreign). Federal courts believe they are compelled by the Erie doctrine to follow state choice of law rules even in transnational cases because, according to the Supreme Court in a decision from the 1970s that predates the substantial expansion of transnational litigation, a “federal court in a diversity case 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.” Even when the foreign affairs or public policy interests of the United States might be implicated in the case, and even when those interests might be significantly different from the forum state’s interests, federal courts apply state choice of law rules. Put simply, transnational choice of law in diversity and alienage cases before federal district courts is U.S. state law.