Origin
The Erie case involved a fundamental question of federalism and the jurisdiction of federal courts in the United States. Congress passed a law still in effect today called the Rules of Decision Act (28 U.S.C. ยง 1652), which states that the laws of a state furnish the rules of decision for a federal court sitting in that state. Thus, a federal court in Texas, hearing a case based on diversity (as opposed to a federal question), has to follow the laws of the applicable state in resolving a case before it.
Read more about this topic: Erie Doctrine
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