The Rules of Decision Act mandates that substantive state law be applied in state cases, unless the United States Constitution, treaties of the United States, or acts of Congress say otherwise. The federal courts' authority to exercise general federal common law in state cases sitting in

diversity jurisdiction In the law of the United States, diversity jurisdiction is a form of subject-matter jurisdiction that gives United States federal courts, U.S. federal courts the power to hear lawsuits that do not involve a federal question jurisdiction, federal ...

was made possible by the Rules of Decision Act. This was later overturned in ''

Erie Railroad Co. v. Tompkins ''Erie Railroad Co. v. Tompkins'', 304 U.S. 64 (1938), was a landmark U.S. Supreme Court decision in which the Court held that there is no general American federal common law and that U.S. federal courts must apply state law, not federal law, t ...

''. In significant part, the rule authorizes congress to make rules that must be followed by the federal courts. This later becomes problematic when a collision between substantive state right laws conflict with federal rules of procedure. This act came from Section 34 of the

Judiciary Act of 1789 The Judiciary Act of 1789 (ch. 20, ) was a United States federal statute enacted on September 24, 1789, during the first session of the First United States Congress. It established the federal judiciary of the United States. Article III, Secti ...

. It is now codified, in slightly different form, in . It states that: Its interpretation, especially the meaning of "the laws of the several states", was central to the issue in ''Erie Railroad Co. v. Tompkins''. At this time, the term "State" includes any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, American Samoa, Guam, and the Northern Mariana Islands. .

See also