Ever since Erie RR Co. v. Tompkins,1 when a case is in federal court on the basis of diversity jurisdiction, all questions of substantive law must be decided according to the governing state law. At times, however, the law of the state may be unclear or nonexistent on the particular issue before the federal court. That circumstance does not relieve the federal court of its duty to determine what result a state court would reach if the case had been brought in state court.2 It may not remit the matter to the state courts for decision.
Diversity litigants are entitled to an adjudication of their rights, and the federal court must decide questions of state law whenever necessary for the disposition of a case. The Supreme Court has held that federal courts may not deny plaintiffs the opportunity to assert their rights in the federal rather than the state courts “merely because the answers to the questions of state law are difficult or uncertain or have not yet been given by the highest court of the state.”3
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