Can someone please explain the outcome-determination test? Forum

[BankruptMe]

I have read Erie, Guaranty and Hanna and I am having trouble with what the outcome-determination test is and how to apply it to a fact pattern.

can someone please help? Thanks

[banjo]

Have you read Glannon's E&E chapter on the outcome-determinative test? It's called "Eerie Erie" and it deserves a pulitzer prize.

[Mal Reynolds]

Guaranty was a pretty wooden, bright line rule. So the only thing a court would have to ask is if they ignored a state law, would the outcome be different from a federal law outcome? if the answer was yes, then they would apply state law. The only problem is that EVERYTHING is outcome determinative from this type of test. The issue wouldn't be litigated if there wasn't a difference in state and federal law so it's too over inclusive of things that probably shouldn't have state law application.

Hanna asks a slightly modified version of the outcome determination question, that is, whether at THE OUTSET OF LITIGATION, will litigants flock to one or the other of federal or state courts. This makes the analysis a little more logical within the policy goals of erie (litigant equality and discouraging forum shopping). So in Hanna, at the outset of litigation (before lawyers filed suit), they aren't more likely to pick federal court because of its different service requirements. That's a pretty ridiculous reason to pick a court. However in Gasperini, one of the holdings focused on damages awards. A different damages standard would absolutely encourage people to forum shop and flock to federal court if there was a potential for a larger damages award. So in that instance, state law should trump.

[Mal Reynolds]

Don't forget on a test to highlight both though. It's definitely smart to say which outcome would follow from both tests and whether they differ, then circle the square and probably say something about how the Hanna test fits more within the Erie framework and policy goals.

[BankruptMe]

Thanks. I greatly appreciate it.