When written federal constitutional or statutory law does not provide the answer to a particular issue presented in a case, a federal judge may decide either that state laws control or that the court should devise a rule of federal common law to govern, in state and federal courts, at least until Congress replaces it with a statutory rule. In Swift v. Tyson (1842), the court established a federal commercial law.
Sometimes judges make federal common law to govern specific issues, as when they fill a gap in a federal statutory scheme (Clearfield Trust Co. v. United States, 1943). Sometimes the Supreme Court interprets an enactment to direct judges to create federal rules throughout a substantive area. For example, the Supreme Court has interpreted Article III's grant of admiralty and maritime jurisdiction to give courts power to create a body of federal admiralty law.
A central issue is how judges are to be confined to making law only when consistent with congressional or constitutional intent. To date, the system has relied primarily on judicial self‐restraint; judges are to make federal common law only when important federal interests require it. There is uneasiness with such an open‐ended approach, yet no workable alternative has been found. Because state law may apply if judges do not make a federal rule, the exercise of restraint in developing federal common law contributes to a healthy federalism.
Federal common law is often misunderstood because of the famous statement in *Erie Railroad v. Tompkins (1938) that “there is no federal general common law” (p. 78). Nonetheless, federal common law is an important part of our tradition of case‐by‐case adjudication, allowing the judiciary to resolve unforeseen issues fairly; federal common law shows no sign of diminishing in importance.
See also Common Law; Judicial Power and Jurisdiction.
— Martha A. Field
The Oxford Companion to the Supreme Court of the United States. Copyright © 1992, 2005 by Oxford University Press. All rights reserved.
