Salve Regina College v. Russell

Syllabus Respondent Russell filed a diversity action in the District Court, alleging, inter alia, that petitioner college, located in Rhode Island, had breached an implied agreement to educate her when it asked her to withdraw from its nursing program for failing to meet certain weight loss commitments. The court denied petitioner's motion for a directed verdict, concluding that the Rhode Island Supreme Court would apply the commercial doctrine of substantial performance in an academic setting, such that Russell could prevail even though she had not fully complied with the contract's terms. The jury returned a verdict for Russell, which the Court of Appeals affirmed. Applying the appellate deference that it customarily accords to interpretations of state law made by federal judges of that State, the Court of Appeals found that the District Court's state-law determination did not constitute reversible error. Held: Courts of appeals must review de novo district courts' state-law determinations. Pp. 231-240. (a) The general rule of independent appellate review of legal issues best serves the dual goals of doctrinal coherence and economy of judicial administration. Courts of appeals are structurally suited to the collaborative juridical process that promotes decisional accuracy. They are able to devote their primary attention to legal issues. They have the advantage of refined briefs which bring to bear on the legal issues more information and more comprehensive analysis than was provided to the district judge. And they employ multijudge panels that permit reflective dialogue and collective judgment. P. 231-233. (b) Departure from the rule of independent appellate review is not warranted by the exercise of diversity jurisdiction. Appellate deference to the district court's state-law determination is inconsistent with the aims of Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 to discourage forum shopping and to avoid inequitable administration of the laws, since it invites divergent development of state law among the federal trial courts within a single State and creates a dual system of enforcement of state-created rights, in which the substantive rule applied to a dispute may depend on the choice of forum. Such deference is also contrary to this Court's cases decided after Erie. See, ''e.g., New York Life Ins. Co. v. Jackson,'' 304 U.S. 261, 58 S.Ct. 871, 82 L.Ed. 1329. Pp. 233-235. (c) Russell's argument that appellate courts professing adherence to the deference rule actually are reviewing de novo the district court state-law determinations is rejected. Courts of appeals that profess deference are, in fact, deferring. When de novo review is compelled, no form of appellate deference is acceptable. Russell's argument that district judges are better arbiters of unsettled state law because they have exposure to the judicial system of the State in which they sit is based on overbroad generalizations and is foreclosed by this Court's decision in Erie. Pp. 235-239. 890 F.2d 484 (CA1 1989), reversed and remanded. BLACKMUN, J., delivered the opinion of the Court, in which MARSHALL, O'CONNOR, SCALIA, KENNEDY, and SOUTER, JJ., joined. REHNQUIST, C.J., filed a dissenting opinion, in which WHITE and STEVENS, JJ., joined, post, p.. Steven E. Snow, Providence, R.I., for petitioner. Edward T. Hogan, East Providence, R.I., for respondent. Justice BLACKMUN delivered the opinion of the Court.