How is federal common law created?
Short Answer
Federal common law is created by federal courts only in limited circumstances, principally where the Constitution, federal statutes, or uniquely federal interests require a federal rule. It is not a general body of judge-made law governing ordinary state-law disputes.[1]
“There is no federal general common law.” Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938)[2]
How It Is Created
| Source of authority | Judicial role |
|---|---|
| Constitutional structure or federal interests | Courts may formulate federal rules where the matter implicates uniquely federal interests, such as federal commercial instruments, federal contracts, or federal lending programs. Clearfield Trust Co. v. United States, 318 U.S. 363, 366–67 (1943)[3] |
| Federal statutes with interstices | Courts may fill gaps in a federal statutory scheme, but only consistently with congressional purposes. United States v. Kimbell Foods, Inc., 440 U.S. 715, 727–29 (1979)[1] |
| Direct constitutional demands | Courts may develop federal rules when necessary to implement the Constitution’s basic structure or federal obligations. Am. Elec. Power Co. v. Connecticut, 564 U.S. 410, 421–22 (2011)[4] |
| State-law incorporation | A court may adopt state law as the federal rule of decision when national uniformity is unnecessary, federal objectives are not frustrated, and reliance on state law will not materially disrupt federal programs. Kimbell Foods, 440 U.S. at 728–40[1] |
Governing Limits
Federal courts must first determine whether:
- Congress has legislated directly on the issue. If so, the statute governs and may displace federal common law. Am. Elec. Power, 564 U.S. at 424–27[4]
- The matter involves a uniquely federal interest.
- A federal rule is necessary to protect that interest or avoid a significant conflict with federal policy. Boyle v. United Technologies Corp., 487 U.S. 500, 504–07, 511–12 (1988)[2]
- A uniform national rule is required. Otherwise, courts generally borrow state law rather than create an independent federal rule. Kimbell Foods, 440 U.S. at 728–30, 740[1]
Thus, federal common law is created through narrow judicial lawmaking authorized by federal constitutional structure, federal statutes, or uniquely federal interests—not through an unrestricted federal power to declare general commercial or tort law.