There are two main objectives of the Erie decision: (1) to discourage forum shopping among litigants, and (2) to avoid inequitable administration of the laws.
The plaintiff, Tompkins, was walking alongside Erie's railroad tracks in Pennsylvania when a train passed.
He noted that it violated the right to equal protection under the law, although he did not mean it in the sense of the Fourteenth Amendment.
In Byrd v. Blue Ridge Rural Electrical Cooperative, Inc., the Court decided that the federal policy allocating responsibilities between judge and jury, as embodied in the 7th Amendment of the US Constitution, outweighed the state rule requiring a judge to decide whether an employer was immune from suit.
The main goal of the Erie decision was to prevent "forum-shopping," a practice where plaintiffs choose a legal forum simply because of the probability of a more favorable ruling.
The main problem with the decision is that sometimes there is simply no state law or practice on which a federal court may defer.
Justice Frankfurter in Guaranty Trust Co. v. York,[2] summarizes the main point of Erie differently: In essence, the intent of that decision was to ensure that, in all cases where a federal court is exercising jurisdiction solely because of the diversity of citizenship of the parties, the outcome of the litigation in the federal court should be substantially the same, so far as legal rules determine the outcome of a litigation, as it would be if tried in a State court....This suggests that Erie's main goal was to achieve equal protection under the law.
One way that equal protection is intentionally disregarded would be through "forum shopping," but the reduction of inequality was the main target of the doctrine.
An example of a substantive right would be a state law on fraud, which may vary widely in composition depending on the jurisdiction.
However, the substance-procedure distinction is a generality as the Court rejected any test based upon "litmus paper criterion."
Thus, a choice between state and federal law must be made with reference to the underlying policy of the Erie decision.
Gasperini is a post-Hanna decision addressing a conflict between state and federal law for review of jury verdicts.
The New York state provision, a "tort reform" measure, allowed reviewing appellate courts to overturn a jury verdict if it "deviates materially from what would be reasonable compensation."
In both Gasperini and Semtek, the common thread is that the blending is done in a way that is calculated to advance the aims of Erie (and York): non-discrimination between litigants, and discouragement of forum shopping.