The Law Applied in the Federal Courts

When the First Congress met, the national struggle between the Federalists and the and-Federalists was reflected in the debates over the jurisdiction to be conferred upon the federal courts.'One group of anti-Federalists wanted no system of lower federal courts at all, and would have left the enforcement of federal laws to the tribunals of the states.Others favored the establishment of federal district courts, but with jurisdiction limited to admiralty and maritime causes.The Federalists, on the other hand, favored the establishment of a system of federal courts clothed with all the powers granted by the Constitution.It was finally determined that there was to be a system of district courts, but their jurisdiction was hotly argued.Specifically, were these courts to be clothed with the power to hear and determine controversies "between citizens of different states"?2The followers of Hamilton argued, against bitter opposition, that it was desirable to afford for out-of-state litigants tribunals which would be free of* the local prejudices likely to be encountered in state courts-an important consideration in the young nation of thirteen provincial and mutually suspicious states.There was also the hope that by staying out of state courts the commercial and trading classes could avoid some of the growing antagonism of the debtor class 3 The Federalists carried the day, and jurisdiction in diversity cases was conferrecf upon the federal district courts. 4 What law was to be applied by the federal courts?The Congress enacted, in Section 34 of the Judiciary Act of 1789, that "the laws of the several States, except where the Constitution, treaties, or statutes of the United States shall otherwise require or provide, shall be regarded as rules of decision in trials at common law, in the courts of the United States, in cases where they apply." 5 Perhaps no other single word in American law has evoked as much controversy among lawyers and legal scholars as has the word "laws" in this act.Did the drafters intend that it include state decisional law as well as state statutory law?Professor Warren, as a result of his study of the original papers of the First Congress, concluded that they did so intend Other scholars have argued that they did not.