Follow-Up to “A Conundrum on Federal Court Determinations of State Law Issues”

In this post last week, I noted that Howard Bashman (of the How Appealing blog) and I had nearly simultaneously (and quite independently) come up with similar questions on federal court determinations of state law.  I had pondered the question as a “hypo” for my legal research students; Bashman asked it in the context of a recent Third Circuit opinion, Jaworowski v. Ciasulli, case no. 05-1423 (June 18, 2007), in which the district court had followed a 19-year-old Third Circuit decision predicting how the state’s high court would decide the state law question.  On appeal, the Third Circuit reconsidered the state law question and decided that the state’s highest court would now decide the issue differently. 

The common question posed by me and Bashman (as stated by him):

It is interesting to consider whether it would have been appropriate, in the first instance, for the federal district court to ignore the earlier Third Circuit ruling if the federal district court were confident that the earlier Third Circuit ruling had incorrectly predicted how New Jersey’s highest court would rule on the issue presented, even though New Jersey’s highest court hadn’t yet ruled on the issue.

Bashman posed the question, and I offered my answer in last week’s post.  Bashman now offers his answer in his weekly article.

In answering the question, Bashman sides with predictability, feeling that the best approach is for the district court to adhere to the circuit’s ruling until the circuit decides to alter its prediction of state law.  In my consideration of the issue, I opted for accuracy over predictability, suggesting that the district court should use the circuit opinion as a starting point and evaluate the prediction therein in light of subsequent developments in state law.

In his article, Bashman considers a second question: whether the Third Circuit was right to reconsider the question in the absence of en banc review.  He and I reach the same conclusion on this one, for similar reasons . . .

We both agree that the Third Circuit did the right thing.  Bashman writes:

In my view, the 3rd Circuit panel that issued last week’s decision departing from an earlier three-judge panel’s Erie prediction did the right thing, even in the absence of rehearing en banc. Because a federal appellate court’s prediction of state law does not bind the state court system, it would be an unfortunate waste of resources for a federal appellate court to hold an en banc rehearing to decide whether to depart from that court’s earlier prediction of how a state court of last resort would rule. Moreover, an earlier federal appellate panel’s prediction of state law should not continue to govern forever, despite persuasive intervening indications of incorrectness, in the absence of a definitive resolution from the applicable state court of last resort.

Bashman’s last sentence jibes with my statement last week that a federal court prediction of how a state’s highest court would rule has a “limited shelf life.”  It would make no sense at all for the circuit to stick to a former prediction it no longer agrees with in light of intervening developments at the state level, even if those developments don’t include a decision from the state high court.  One could even argue that the question isn’t even being “reconsidered” unless there has been absolutely no change in the factors the state court would consider.  Nineteen years had passed in this case, with many intervening developments at the state court level.  I think this demonstrates that the relevant question is always “How would the state’s highest court decide the issue now?”

This argument could be taken too far, of course.  After all, one could argue that if the relevant question is how the state high court would decide the issue now, then the federal court should reexamine the state law question every time the issue arises since a state high court can depart from its earlier rulings.  That is a rare occasion, however, and I don’ think it justifies taking the “now” question that far.

Thanks to Professor Rubinstein at Adjunct Law Prof Blog for the link.

UPDATE (6/28/07): For a more detailed analysis, see the law review article linked in Bashman’s article. That article, written by Colin E. Wrabley and appearing in the Seton Hall Circuit Review, starts (footnote omitted):

The precedential force of decisions by a federal circuit court of appeals might strike the typical practitioner as a settled issue. It is axiomatic, for example, that a federal circuit court of appeals’ decision on questions of federal law binds subsequent panels of that court and district courts within that circuit, absent intervening contrary authority in the form of a federal statute, a decision from the court of appeal sitting en banc, or the Supreme Court of the United States. One might anticipate that a federal circuit court of appeals’ “prediction” of state law in a diversity jurisdiction case pursuant to Erie Railroad Co. v. Tompkins, would have similar force, but is this true?