Amicus Curiae Brief — Cuker Interactive, LLC, Petitioner v. Pillsbury Winthrop Shaw Pittman, LLP

NO. 22-18

In the

Supreme Court of the United States

________________

CUKER INTERACTIVE, LLC,

Petitioner,

v.

PILLSBURY WINTHROP SHAW PITTMAN, LLP,

Respondent.

________________

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

________________

BRIEF FOR AMICI CURIAE PROFESSORS

OF LAW IN SUPPORT OF PETITIONER

________________

Frederick R. Yarger

Counsel of Record

Teresa G. Akkara

Wheeler Trigg O’Donnell LLP

370 17th Street, Suite 4500

Denver, CO 80202-5647

Telephone: 303.244.1800

Facsimile: 303.244.1879

Email: yarger@wtotrial.com

akkara@wtotrial.com

Counsel for Amici Curiae

August 5, 2022

TABLE OF CONTENTS

TABLE OF AUTHORITIES ....................................... ii

INTEREST OF AMICI CURIAE ............................... 1

SUMMARY OF ARGUMENT .................................... 3

ARGUMENT ............................................................... 4

I.

The Petition Presents An Important

Question About Choice of Law, On Which

The Circuit Courts Are Split. .............................. 4

A. The Question Has Generated A Circuit

Split. .............................................................. 4

B. Dicta From This Court’s Opinions May

Have Contributed To The Circuit Split. ...... 6

C. The Ninth Circuit’s Approach Is

Inconsistent

With

This

Court’s

Approach To Choice Of Law......................... 8

D. The Ninth Circuit’s Approach Is

Inconsistent

With

This

Court’s

Approach To Federal Common Law. ......... 10

II. The

Question

Presented

Implicates

Important Issues Beyond This Case. ................ 11

A. Substantive Rights ..................................... 11

B. Federalism .................................................. 13

C. Separation of Powers.................................. 15

D. The Twin Aims of Erie ............................... 16

CONCLUSION ......................................................... 17

ii

TABLE OF AUTHORITIES

Cases

Alaska Packers Ass’n v. Indus. Accident Comm’n,

294 U.S. 532 (1935)................................................ 14

Allstate Ins. Co. v. Hague,

449 U.S. 302 (1981)................................................ 14

Atherton v. FDIC,

519 U.S. 213 (1997)................................................ 15

Banco Nacional de Cuba v. Sabbatino,

376 U.S. 398 (1964)................................................ 11

BFP v. Resolution Trust Corp.,

511 U.S. 531 (1994).................................................. 8

Boyle v. United Techs. Corp.,

487 U.S. 500 (1988)................................................ 13

Butner v. United States,

440 U.S. 48 (1979).............................................. 7, 12

Cassirer v. Thyssen-Bornemisza Collection

Foundation, 142 S. Ct. 1502 (2022) .............. passim

Cent. Va. Cmty. Coll. v. Katz,

546 U.S. 356 (2006)................................................ 16

Clearfield Trust Co. v. United States,

318 U.S. 363 (1943)................................................ 11

Day & Zimmermann, Inc. v. Challoner,

423 U.S. 3 (1975)...................................................... 6

Erie R. Co. v. Tompkins,

304 U.S. 64 (1938).......................................... passim

Griffin v. McCoach,

313 U.S. 498 (1941).................................................. 9

Guaranty Tr. Co. of N.Y. v. York,

326 U.S. 99 (1945).................................................... 6

iii

Hanna v. Plumer,

380 U.S. 460 (1965)................................................ 16

In re Gaston & Snow,

243 F.3d 599 (2d Cir. 2001) ..................................... 5

In re Lindsay,

59 F.3d 942 (9th Cir.1995)....................................... 5

In re Merritt Dredging Co.,

839 F.2d 203 (4th Cir. 1988).................................... 5

In re Miller,

853 F.3d 508 (9th Cir. 2017).................................... 5

In re Payless Cashways,

203 F.3d 1081 (8th Cir. 2000).................................. 5

In re Syntax-Brillian Corp.,

573 F. App’x 154 (3d Cir. 2014) ............................... 5

Klaxon Co. v. Stentor Electric Manufacturing Co.,

313 U.S. 487 (1941)................................ 5, 6, 8, 9, 14

Lawrence v. Chater,

516 U.S. 163 (1996)................................................ 10

Lewis v. Mfrs. Nat’l Bank,

364 U.S. 603 (1961)............................................ 7, 12

N. Pipeline Constr. Co. v. Marathon Pipe Line Co.,

458 U.S. 50 (1982)................................................ 4, 7

O’Melveny & Myers v. FDIC,

512 U.S. 79 (1994).................................................. 15

Rodriguez v. FDIC,

140 S. Ct. 713 (2020)...................................... 4, 7, 10

United States v. Kimbell Foods, Inc.,

440 U.S. 715 (1979).......................................... 10, 11

Vanston Bondholders Protective Committee v.

Green, 329 U.S. 156 (1946) .................................. 6, 7

iv

Watson v. Emps. Liab. Assurance Corp.,

348 U.S. 66 (1954).................................................. 14

Wheeldin v. Wheeler,

373 U.S. 647 (1963)................................................ 15

Constitution

U.S. Const. art. I, § 8 ................................................ 16

Other Authorities

19 CHARLES ALAN WRIGHT & ARTHUR R. MILLER,

FEDERAL PRACTICE & PROCEDURE § 4506 (3d

ed.) ............................................................................ 9

Andrew D. Bradt, The Shortest Distance: Direct

Filing and Choice of Law in Multidistrict

Litigation, 88 NOTRE DAME L. REV. 759 (2012)

........................................................................ 8, 9, 13

Zachary D. Clopton, Horizontal Choice of Law in

Federal Court, 169 U. PA. L. REV. 2193 (2021)

.................................................................... 11, 13, 17

S. Elizabeth Gibson, Fed. Jud. Ctr., Judicial

Management Of Mass Tort Bankruptcy Cases

(2005), https://www.uscourts.gov/sites/default/

files/gibsjudi_1.pdf ................................................. 12

Lindsey D. Simon, Bankruptcy Grifters, 131

YALE L.J. 1154 (2022) ............................................ 12

Symeon C. Symeonides, Choice of Law in the

American Courts in 2019: Thirty-Third

Annual Survey, 68 AM. J. COMP. L. 235 (2020) ....... 6

Russell J. Weintraub, The Erie Doctrine and

State Conflict of Laws Rules, 39 IND. L.J. 228

(1963) ...................................................................... 13

v

Patrick Woolley, Erie and Choice of Law After

the Class Action Fairness Act, 80 TUL. L. REV.

1723 (2006) ............................................................. 15

INTEREST OF AMICI CURIAE

Amici curiae are professors of law with expertise

in civil procedure and federal courts. 1 They have a

strong interest in the proper treatment of these

issues by U.S. courts.

Zachary D. Clopton, Professor of

Northwestern Pritzker School of Law;

Law,

Andrew D. Bradt, Professor of Law, University of

California, Berkeley School of Law;

Stephen B. Burbank, David Berger Professor for

the Administration of Justice, Emeritus,

University of Pennsylvania Carey Law School;

Brooke D. Coleman, Professor of Law and Special

Assistant to the Vice President for Diversity &

Inclusion, Seattle University School Of Law;

William S. Dodge, John D. Ayer Chair in

Business Law and Martin Luther King Jr.

Professor of Law, University of California, Davis,

School of Law;

Jonathan R. Nash, Associate Dean for Research

and Robert Howell Hall Professor of Law, Emory

University School of Law;

No counsel for a party authored this brief in whole or in

part, and no person or entity other than amici curiae and their

counsel made a monetary contribution to the preparation or

submission of the brief. Counsel for the parties received notice

of the intention to file this amici curiae brief at least 10 days

prior to the deadline and consented to the filing.

1

2

John T. Parry, Associate Dean of Faculty and

Edward Brunet Professor of Law, Lewis & Clark

Law School;

Kermit Roosevelt, David Berger Professor for the

Administration of Justice, University of

Pennsylvania Carey Law School;

Thomas D. Rowe, Jr., Elvin R. Latty Professor

Emeritus of Law, Duke University School of Law;

Ryan C. Williams, Assistant Professor of Law,

Boston College Law School.

3

SUMMARY OF ARGUMENT

This case raises an important question about the

choice of law rules applicable to claims in

bankruptcy.

Most federal courts apply state choice of law

rules to non-federal claims in bankruptcy, as this

Court has instructed in many other contexts, as

recently as last term in Cassirer v. ThyssenBornemisza Collection Foundation, 142 S. Ct. 1502

(2022). The Ninth Circuit, however, departed from

the mainstream and created an independent federal

common law rule for choice of law in bankruptcy.

The Ninth Circuit’s decision implicates

substantive rights arising under state law. It

implicates federalism principles embodied in choice

of law rules. It implicates the separation of powers

that traditionally allocate lawmaking authority to

Congress, not the courts. And it implicates forum

shopping and the inequitable administration of law

that motivated this Court’s decision in Erie R. Co. v.

Tompkins, 304 U.S. 64 (1938).

For these reasons, this Court should grant the

petition and resolve this pressing circuit split.

Alternatively, this Court could grant the petition,

vacate the decision below, and remand to the Ninth

Circuit so that court may consider the issue in light

of Cassirer.

4

ARGUMENT

I.

The Petition Presents An Important

Question About Choice of Law, On Which

The Circuit Courts Are Split.

Unlike its sister circuits, the Ninth Circuit

applies a special federal common law rule for choice

of law in bankruptcy cases. This approach conflicts

with decisions of other federal courts and is

inconsistent with this Court’s precedents on choice of

law and federal common law. This Court should

grant the petition and address important questions

about the choice of law rules applied in bankruptcy.

A. The Question Has Generated A Circuit

Split.

While many issues in bankruptcy arise under

federal law, both “core” and “non-core” bankruptcy

claims may arise under state law, and issues of state

law may arise in many other contexts in bankruptcy.

See, e.g., Rodriguez v. FDIC, 140 S. Ct. 713 (2020)

(holding that state law provides the rule for the

distribution of tax refunds following a consolidated

return, an issue presented in a Chapter 7

bankruptcy); N. Pipeline Constr. Co. v. Marathon

Pipe Line Co., 458 U.S. 50 (1982) (discussing the

constitutionality of bankruptcy court jurisdiction in a

case alleging breach of contract, breach of warranty,

misrepresentation, coercion, and duress under state

law).

Because bankruptcy proceedings may involve

issues of state law, they necessarily require courts to

decide which state’s law applies. For most situations,

federal courts applying state law will follow the

horizontal choice of law rules of the forum state,

5

following

Klaxon

Co.

v.

Stentor

Electric

Manufacturing Co., 313 U.S. 487 (1941). Last Term,

this Court confirmed that the forum state’s choice of

law rules apply to cases arising under the Foreign

Sovereign Immunities Act. See Cassirer, 142 S. Ct.

1502.

In bankruptcy, most federal courts also follow

state choice of law rules. See, e.g., In re SyntaxBrillian Corp., 573 F. App’x 154, 162 (3d Cir. 2014)

(“‘The conflict of laws rules to be applied by the

federal court in Delaware must conform to those

prevailing in Delaware’s state courts.’”) (quoting

Klaxon, 313 U.S. at 496); In re Payless Cashways, 203

F.3d 1081, 1084 (8th Cir. 2000) (“The bankruptcy

court applies the choice of law rules of the state in

which it sits.”); In re Merritt Dredging Co., 839 F.2d

203, 206 (4th Cir. 1988) (“We believe, however, that

in the absence of a compelling federal interest which

dictates otherwise, the Klaxon rule should prevail

where a federal bankruptcy court seeks to determine

the extent of a debtor’s property interest.”); In re

Gaston & Snow, 243 F.3d 599, 601-02 (2d Cir. 2001)

(“[W]e decide that bankruptcy courts confronting

state law claims that do not implicate federal policy

concerns should apply the choice of law rules of the

forum state.”).

The Ninth Circuit, however, applies a federal

common law approach to choice of law modeled on

the Restatement (Second) of Conflict of Laws. In re

Miller, 853 F.3d 508, 515-16 (9th Cir. 2017) (citing In

re Lindsay, 59 F.3d 942, 948 (9th Cir.1995)).

These differing approaches are not mere trivia;

they can result in different law being applied on the

6

same facts. See, e.g., Symeon C. Symeonides, Choice

of Law in the American Courts in 2019: Thirty-Third

Annual Survey, 68 AM. J. COMP. L. 235 (2020)

(collecting state choice of law approaches, many of

which deviate from the Second Restatement). For

this reason, the circuit split identified in the petition

has real and important consequences in cases arising

in bankruptcy, including this one.

B. Dicta From This Court’s Opinions May

Have Contributed To The Circuit Split.

Part of the explanation for the circuit split may

be found in Supreme Court dicta. This case presents

the Court an opportunity to directly consider and

clarify that dicta.

In 1946, this Court in Vanston Bondholders

Protective Committee v. Green held that federal law

provided the rule of decision on the issue whether to

require the payment of interest on unpaid interest.

329 U.S. 156 (1946). In dicta, the Court commented

on the appropriate choice of law method when a

bankruptcy case called for the application of state

law, implying that at least under some circumstances

a federal court would apply a federal choice of law

rule. Id. at 161-62. 2

There are any number of reasons to discount Vanston

Bondholders’ dicta. For example, the case was decided in 1946,

well before this Court’s more definitive endorsement of Klaxon

in Day & Zimmermann, Inc. v. Challoner, 423 U.S. 3 (1975).

Vanston Bondholders also was decided during the era when the

Court was still working through the scope and mechanics of the

Erie doctrine. See, e.g., Guaranty Tr. Co. of N.Y. v. York, 326

U.S. 99 (1945). It also was decided under the Bankruptcy Act of

2

7

More recent dicta, however, point the other way.

For example, in Butner v. United States, 440 U.S. 48

(1979), 3 this Court addressed what law governed the

collection of rents during a bankruptcy. The Court

applied state law and, in so doing, made the following

observations consistent with the application of state

choice of law rules:

Property interests are created and defined by

state law. Unless some federal interest

requires a different result, there is no reason

why such interests should be analyzed

differently simply because an interested

party is involved in a bankruptcy proceeding.

Uniform treatment of property interests by

both state and federal courts within a State

serves to reduce uncertainty, to discourage

forum shopping, and to prevent a party from

receiving “a windfall merely by reason of the

happenstance of bankruptcy.”

440 U.S. at 55 (quoting Lewis v. Mfrs. Nat’l Bank,

364 U.S. 603, 609 (1961)). This language implies that

state choice of law rules apply. “Uniform treatment

1898, superseded by the Bankruptcy Reform Act of 1978. The

1978 statute greatly expanded bankruptcy jurisdiction’s reach

over state law claims as compared to the era of Vanston

Bondholders, which might be reason to revisit the choice-of-law

framework in bankruptcy. See N. Pipeline Constr. Co. v.

Marathon Pipe Line Co., 458 U.S. 50, 52-56 (1982). And finally,

this Court takes a much less friendly view toward federal

common lawmaking today than it did in 1946.

This Court cited approvingly to Butner two years ago in

Rodriguez v. FDIC, 140 S. Ct. 713 (2020).

3

8

. . . within a state” requires the application of state

choice of law rules; the only way to avoid a “different

result” in bankruptcy would be to follow those state

rules. Cf. Cassirer, 142 S. Ct. 1502 (making the same

point about claims under the FSIA).

This Court also endorsed in dicta the

presumptive respect for state law in bankruptcy in

BFP v. Resolution Trust Corp., 511 U.S. 531 (1994),

explaining: “To displace traditional state regulation

in such a manner, the federal statutory purpose must

be ‘clear and manifest.’ Otherwise, the Bankruptcy

Code will be construed to adopt, rather than to

displace, pre-existing state law.” Id. at 545-55

(internal citations and note omitted). The

presumption that bankruptcy adopts “pre-existing

state law” should extend to pre-existing state choice

of law.

In short, this Court has not spoken clearly on the

choice of law rules applicable in bankruptcy, and

what it has said does not provide a clear answer.

C. The Ninth Circuit’s Approach Is

Inconsistent

With

This

Court’s

Approach To Choice Of Law.

Although this Court has not spoken clearly on

the appropriate choice of law rules for bankruptcy

cases, it has been clear in many other categories of

cases that federal courts should look to state choice of

law.

Three years after Erie v. Tompkins, this Court

took up horizontal choice of law in Klaxon Co. v.

Stentor Electric Manufacturing Co., 313 U.S. 487

(1941). See Andrew D. Bradt, The Shortest Distance:

Direct Filing and Choice of Law in Multidistrict

9

Litigation, 88 NOTRE DAME L. REV. 759, 770-77

(2012). Klaxon was a contract case filed in the

District of Delaware. Both the district court and

court of appeals applied New York law on

prejudgment interest, seemingly following a federal

choice of law rule. This Court unanimously reversed,

holding that the choice of law rule of the forum state

(there, Delaware) should apply. Klaxon, 313 U.S. at

496 (“The conflict of laws rules to be applied by the

federal court in Delaware must conform to those

prevailing in Delaware’s state courts.”).

Klaxon’s holding expressly applies state choice of

law in cases arising under the diversity statute, but it

is not limited to diversity cases. See, e.g., 19 CHARLES

ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL

PRACTICE & PROCEDURE § 4506 (3d ed.). On the same

day as Klaxon, the Supreme Court decided Griffin v.

McCoach, 313 U.S. 498 (1941). Griffin applied state

choice of law rules in a statutory interpleader action

that could not have been filed in state court in the

forum state. Id. Literally from day one, therefore,

state choice of law was not limited to diversity cases.

Last term, this Court held that state choice of

law applies in cases under the Foreign Sovereign

Immunities Act (FSIA). In Cassirer v. ThyssenBornemisza, this Court reviewed a decision of the

Ninth Circuit applying a federal choice of law rule in

FSIA cases. 142 S. Ct. 1502. This Court reversed

unanimously, explaining that the appropriate

approach was to employ state choice of law—a

conclusion this Court called “simple.” Id. at 1506,

1510. Indeed, this Court’s intervening decision in

Cassirer might be grounds to grant the petition,

10

vacate, and remand to the Ninth Circuit. See, e.g.

Lawrence v. Chater, 516 U.S. 163 (1996) (discussing

when “GVR” might be appropriate).

Notably, FSIA cases such as Cassirer may

implicate foreign relations, and thus they might have

been strong candidates for independent federal choice

of law rules. Yet this Court said no. State choice of

law governs in this area too. Id. 4

D. The Ninth Circuit’s Approach Is

Inconsistent

With

This

Court’s

Approach To Federal Common Law.

The Ninth Circuit’s rule is also inconsistent with

this Court’s precedent on when federal courts should

develop federal common law. As this Court recently

reminded, “[j]udicial lawmaking in the form of

federal common law plays a necessarily modest role

under a Constitution that vests the federal

government’s ‘legislative Powers’ in Congress and

reserves most other regulatory authority to the

States.” Rodriguez, 140 S. Ct. at 717. Federal

common law in specialized areas survived Erie’s

admonition that “[t]here is no federal general

common law,” 304 U.S. at 78, “[b]ut before federal

judges may claim a new area for common lawmaking,

strict conditions must be satisfied.” Rodriguez, 140 S.

Ct. at 717. See also United States v. Kimbell Foods,

4 The suggestion that state law should provide the choice of

law rules in bankruptcy does not necessarily mean that federal

courts sitting in bankruptcy should follow forum state choice of

law. Which state’s choice of law rules should apply in

bankruptcy is among the important questions to which this

Court should speak.

11

Inc., 440 U.S. 715 (1979); Clearfield Trust Co. v.

United States, 318 U.S. 363 (1943).

This Court confirmed that its precedents on

federal common law apply in the context of choice of

law in Cassirer. The Court explained that even if the

text of the FSIA did not direct its result, “we see

scant justification for federal common lawmaking in

this context.” 142 S. Ct. at 1509. And, again, the

Court reached this result despite the presence of

potential foreign relations interests that might have

justified federal common lawmaking. Cf. Banco

Nacional de Cuba v. Sabbatino, 376 U.S. 398 (1964).

The decision to follow state choice of law rules

does not eliminate federal common law, but it

maintains a modest role of federal common law and

reserves regulatory authority to the states. See

Zachary D. Clopton, Horizontal Choice of Law in

Federal Court, 169 U. PA. L. REV. 2193, 2212-2231

(2021). At a minimum, this Court should superintend

the making of federal common law by explaining

when such federal interests are present.

II. The

Question

Presented

Implicates

Important Issues Beyond This Case.

The choice of law applied in bankruptcy

implicates important issues of substantive rights,

federalism, the separation of powers, and the twin

aims of Erie. Granting the petition for a writ of

certiorari will allow this Court to resolve a circuit

split implicating these important issues.

A. Substantive Rights

Bankruptcy offers debtors a fresh start, but it

also affects the substantive rights of creditors.

12

Creditors may include individuals or entities with

legal claims against the debtor that arise under state

law. A contract party may have claims under state

contract law. A tort victim may have claims under

state tort law.

Different choice of law rules may select different

state substantive laws. Thus, different choice of law

rules may affect the substantive law that governs

claims sounding in contract, tort, and others. And

because the Ninth Circuit applies a different choice of

law when a case arises in bankruptcy, it allows the

substantive law to turn on “the happenstance of

bankruptcy.” Butner, 440 U.S. at 55 (quoting Lewis,

364 U.S. at 609).

This effect on substantive rights is likely to

become more significant as bankruptcy becomes an

increasingly common method for resolving mass tort

claims. See, e.g., S. Elizabeth Gibson, Fed. Jud. Ctr.,

Judicial Management Of Mass Tort Bankruptcy

Cases 1 (2005), https://www.uscourts.gov/sites/

default/files/gibsjudi_1.pdf; Lindsey D. Simon,

Bankruptcy Grifters, 131 YALE L.J. 1154 (2022). Mass

tort suits typically involve claims arising under state

law. When mass tort claims are aggregated in a

bankruptcy proceeding—rather than, for example, in

federal and state trial courts—a federal bankruptcy

court applying a federal choice of law rule might

apply a different state’s tort law than a court

applying state choice of law. The tort claim,

therefore, might change—or disappear altogether—

based solely on the defendants’ decision to declare

bankruptcy. The ability to declare bankruptcy

strategically, and to affect the applicable substantive

13

law in the process, makes this scenario even more

worrisome. 5

B. Federalism

Whether and when federal courts should make

federal common law are important questions of

federalism that require this Court’s attention.

Erie, 304 U.S. 64, struck a blow for federalism,

announcing that “[t]here is no federal general

common law.” Id. at 78. The Court’s reasoning was

deeply connected to federalism, explaining that the

expansive role for federal law under Swift v. Tyson

was an “invasion of the authority of the state and, to

that extent, a denial of its independence.” Id. at 79

(internal quotation marks omitted). See also Boyle v.

United Techs. Corp., 487 U.S. 500, 517 (1988)

(Brennan, J., dissenting) (“Erie was deeply rooted in

notions of federalism, and is most seriously

implicated when, as here, federal judges displace the

state law that would ordinarily govern with their

own rules of federal common law.”).

This federalism interest extends to choice of law.

Choice of law rules are expressions of substantive

policies. See, e.g., Russell J. Weintraub, The Erie

Doctrine and State Conflict of Laws Rules, 39 IND.

L.J. 228, 242 (1963) (“[T]he choice-of-law rules of a

5 For a discussion of how state choice of law might operate in

bankruptcy, see Zachary D. Clopton, Horizontal Choice of Law

in Federal Court, 169 U. PA. L. REV. 2193, 2231-2233 (2021)

(applying to bankruptcy a solution developed for multidistrict

litigation in Andrew D. Bradt, The Shortest Distance: Direct

Filing and Choice of Law in Multidistrict Litigation, 88 NOTRE

DAME L. REV. 759 (2012)).

14

state are important expressions of its domestic

policy.”); see also Allstate Ins. Co. v. Hague, 449 U.S.

302 (1981); Watson v. Emps. Liab. Assurance Corp.,

348 U.S. 66 (1954); Alaska Packers Ass’n v. Indus.

Accident Comm’n, 294 U.S. 532 (1935).

This Court recognized as much in Klaxon,

explaining that a federal court’s application of state

choice of law is intimately connected with the state’s

ability to make policy via choice of law:

Whatever lack of uniformity this may

produce between federal courts in different

states is attributable to our federal system,

which leaves to a state, within the limits

permitted by the Constitution, the right to

pursue local policies diverging from those of

its neighbors. It is not for the federal courts

to thwart such local policies by enforcing an

independent ‘general law’ of conflict of laws.

Subject only to review by this Court on any

federal question that may arise, Delaware is

free to determine whether a given matter is

to be governed by the law of the forum or

some other law. This Court’s views are not

the decisive factor in determining the

applicable conflicts rule. And the proper

function of the Delaware federal court is to

ascertain what the state law is, not what it

ought to be.

Klaxon, 313 U.S. at 496-97.

The Ninth Circuit’s federal common law rule is

“general law” that thwarts the local policies of states,

which may make different decisions about the

15

applicable substantive law. The question presented,

therefore, implicates important issues of federalism.

C. Separation of Powers

The decision to make federal common law also

implicates the separation of powers. The limited role

of federal common law is a corollary of the limited

power of federal judges to make law. “Whether latent

federal power should be exercised to displace state

law is primarily a decision for Congress, not the

federal courts.” Atherton v. FDIC, 519 U.S. 213, 218

(1997) (internal quotation marks omitted). This is not

to say that federal judges should never make law, but

only that their lawmaking should be limited to “few

and restricted” topics. See O’Melveny & Myers v.

FDIC, 512 U.S. 79, 87 (1994) (quoting Wheeldin v.

Wheeler, 373 U.S. 647, 651 (1963)).

Surely, identifying those “few and restricted”

topics is a task well-suited to this Court. This task is

particularly important here because the choice of rule

affects substantive rights. See supra Section II.A;

Patrick Woolley, Erie and Choice of Law After the

Class Action Fairness Act, 80 TUL. L. REV. 1723, 1725

(2006)

(“Because

choice-of-law

rules

define

substantive rights, Article III cannot properly be

read to authorize the use of independent choice-oflaw rules, but instead requires application of the

whole law of a state—that is, the choice-of-law rules

and internal law of a state—selected without regard

to its content.”).

These separation of powers issues implicated by

federal common law are even more pressing in an

area such as bankruptcy that is under the plenary

control of Congress. The Constitution authorizes

16

Congress “to establish . . . uniform Laws on the

subject of Bankruptcies throughout the United

States.” U.S. Const. art. I, § 8, cl 4. This Court, in a

decision holding that Congress may abrogate state

sovereign immunity in bankruptcy, explained that

the bankruptcy clause “encompasses the entire

‘subject of Bankruptcies.’ The power granted to

Congress by that Clause is a unitary concept rather

than an amalgam of discrete segments.” Cent. Va.

Cmty. Coll. v. Katz, 546 U.S. 356, 370 (2006). When

federal courts make law in bankruptcy, they risk

intruding on Congress’s authority in this area.

D. The Twin Aims of Erie

Famously, the decision in Erie v. Tompkins

furthers twin aims: “discouragement of forum

shopping

and

avoidance

of

inequitable

administration of the laws.” Hanna v. Plumer, 380

U.S. 460, 468 (1965).

This Court should provide guidance to the lower

courts on issues of horizontal choice of law because

they implicate both of the aims of Erie. Horizontal

choice of law implicates forum shopping because if

state and federal courts in the same state apply

different choice of law rules, then parties would have

the incentive to shop for different substantive law.

Likewise, horizontal choice of law implicates

equitable administration because if state and federal

courts in the same state applied different choice of

law rules, then parties would be treated differently

depending on whether they have access to a federal

forum.

Importantly, the twin aims of Erie are also

implicated when federal courts apply different choice

17

of law rules depending on the basis of federal

jurisdiction, as the Ninth Circuit did in this case. If

the choice of law rule (and therefore the substantive

law) depends on the basis of federal jurisdiction, then

parties would have the incentive to “shop” among

bases of jurisdiction. See Clopton, 169 U. PA. L. REV.

2193. Potential defendants, for example, might

declare bankruptcy in order to change the applicable

substantive law. Plaintiffs, too, might select among

potential defendants depending on whether they

were solvent or insolvent. The ability to affect the

choice of law in some but not all cases would thus

result in the inequitable administration of the law

that Erie sought to avoid.

CONCLUSION

For the foregoing reasons, amici curiae

respectfully urge that the petition for a writ of

certiorari be granted.

Respectfully submitted,

Frederick R. Yarger

Counsel of Record

Teresa G. Akkara

Wheeler Trigg O’Donnell LLP

370 17th Street, Suite 4500

Denver, CO 80202-5647

Telephone: 303.244.1800

Facsimile: 303.244.1879

Email: yarger@wtotrial.com

akkara@wtotrial.com

Counsel for Amici Curiae

August 5, 2022