Shady Grove: Duck-Rabbits, Clear Statements, and Federalism
This essay adds to the burgeoning literature on Shady Grove by examining the use of clear statement rules in diversity cases where the federal court must ascertain the scope of an applicable state law, as well as resolve an apparent collision between a state law and a Federal Rule of Civil Procedure. Part I recounts what was in dispute in Shady Grove. Part II examines how the district court resolved whether New York’s ban on penalty class actions applied in a case involving statutory interest. Because lower courts are increasingly treating Justice Stevens’ Shady Grove concurrence as the controlling opinion of the divided Court, Part III focuses on how these courts are resolving whether to apply a state procedural rule that involves substantive state policies in the face of a conflicting Federal Rule. Part IV raises concerns about the federal courts’ interpretive approach at both stages of the analysis. I argue that requiring a clear statement both disempowers and over-empowers states in ways that subvert federalism and nationalism. I conclude by briefly discussing potential alternative approaches.