Intermediate Appellate Courts
To ascertain substantive state law in a diversity action, a federal court looks first to the governing state’s highest court and then to its intermediate appellate courts.[i] If the state’s highest court has not directly addressed a particular question of state law, a decision of an intermediate state appellate court on that question is binding in a diversity action in the federal court.
A federal court can depart from an intermediate court’s fully reasoned holding as to state law only if convinced that the state’s highest court would not follow that holding.[ii] Accordingly, a federal court cannot refuse to follow an intermediate appellate court’s decision simply because it believes the intermediate court’s decision was wrong, bad policy, or contrary to the majority rule in other jurisdictions.
In Stoner v. New York Life Ins. Co., 311 U.S. 464 (U.S. 1940), the court held that where jurisdiction rests on diversity of citizenship, federal courts follow the decisions of intermediate state courts in the absence of convincing evidence that the highest court of the state would decide differently.
An intermediate state appellate court is the highest court of the state in which a decision can be had if there is no appeal to a higher state court.[iii] Similarly, an intermediate state appellate court becomes the highest court of the state when the higher state court refused to take the case on appeal for want of jurisdiction.[iv]
In Adam v. Saenger, 303 U.S. 59 (U.S. 1938), the court held that a writ of certiorari from the U.S. Supreme Court can be directed to an intermediate state court, since the intermediate court is the highest court in the state in which a judgment can be had. Further, the writ can be directed to an intermediate state court only if the highest state court confirms that it does not have jurisdiction over an appeal, by dismissing the appeal for want of jurisdiction.[v]
Federal jurisdictional statute provides that final judgments or decrees rendered by the highest court of a State in which a decision could be had may be reviewed by the Supreme Court.[vi]
In R. J. Reynolds Tobacco Co. v. Durham County, 479 U.S. 130 (U.S. 1986), the court held that the U.S. Supreme Court will dismiss for want of jurisdiction an appeal from a state intermediate court of appeals, where:
- the intermediate court upheld the validity of a state statute;
- the state supreme court has granted a motion to dismiss the resulting appeal for lack of a substantial federal question;
- the U.S. Supreme Court determines that an appeal will lie from the judgment of the state supreme court, and not from the judgment of the intermediate court.
[i] Lund v. Chemical Bank, 1990 U.S. Dist. LEXIS 1679 (S.D.N.Y. Feb. 16, 1990)
[ii] Assicurazioni Generali, S.p.A. v. Neil, 160 F.3d 997 (4th Cir. Md. 1998)
[iii] Tucker v. Texas, 326 U.S. 517 (U.S. 1946)
[iv] Randall v. Board of Comm’rs, 261 U.S. 252, 253 (U.S. 1923)
[v] Cuyahoga River Power Co. v. Northern Realty Co., 244 U.S. 300 (U.S. 1917)
[vi] 28 USCS § 1257