Horizontal Choice of Law in Federal Court

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Federal courts routinely apply state law. In diversity cases, federal courts apply the state law that the forum state would apply—the so-called Klaxon rule. Outside of diversity, the vitality of Klaxon is far less clear. Federal courts have departed from Klaxon when applying state law in cases arising under bankruptcy, admiralty, the Foreign Sovereign Immunities Act, and more. Scholars have called for courts to abandon Klaxon in cases arising under the Class Action Fairness Act (CAFA) or consolidated as multidistrict litigation (MDL).

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