Appellate Review of Unclear State Law in the Ninth Circuit After in Re Mclinn

• Publication year: 1985

UNIVERSITY OF PUGET SOUND LAW REVIEWVolume 9, No. 2WINTER 1986

NOTES

Appellate Review of Unclear State Law in the Ninth Circuit After In Re McLinn

Daniel L. Brewster

In In re McLinn(fn1) the Ninth Circuit Court of Appeals held that it will no longer defer to a federal district court's interpretation of state law when reviewing state law issues on appeal. The traditional standard of review for state law issues had required deference to a district court's determination of state law unless the district court was "clearly wrong."(fn2) In rejecting the traditional standard, the court reasoned that the previous clearly wrong standard was an abdication of the court's duty as a court of review and adversely affected the appellate court's precedent adopting function.(fn3) The Ninth Circuit therefore adopted the rule that questions of state law are reviewable under the same independent de novo standard as questions of federal law.(fn4)

I. Introduction

The proper weight to be given a federal district court's conclusions of state law on appeal is not clearly settled. In respect to a court's findings of fact, Rule 52(a) of the Federal Rules of Civil Procedure provides that the trial court's findings of fact shall be sustained on appeal unless "clearly erroneous."(fn5) Rule 52(a) is silent, however, regarding the proper standard for reviewing conclusions of law. This silence has been interpreted to mean that the clearly erroneous standard does not apply to the trial court's conclusions of law, and that such conclusions are freely reviewable on appeal.(fn6)

The current practice among most of the circuit courts is to give some degree of deference or weight to a district court's interpretation of state law.(fn7) The rationale behind according deference is that a federal district court judge who sits in a particular state and who has practiced before its courts is better able to resolve complex questions of state law than a federal appellate court judge who has had no experience with the law of that state.(fn8)

In McLinn, the Ninth Circuit significantly departed from the practice of the other circuits, and from its own prior practice, when it rejected the deferential standard of review normally applied to a federal district court's interpretation of state law. This Note discusses the Ninth Circuit's decision in McLinn and examines the deferential standard employed in the other circuits and in the United States Supreme Court. The Note takes the position that McLinn was correct in rejecting the former practice of accepting a district court's interpretations of state law unless clearly wrong, but that McLinn went too far in holding that a district court's rulings on unclear state law are entitled to no deference. The Note asserts that neither fairness to the parties nor concern for reaching the most accurate determination of state law is furthered by the McLinn decision. An appellate court, inexperienced in the law of the state, should not be given unlimited freedom to second guess the district court as to how a state court will eventually rule on an issue. When a question of state law is unsettled, resulting in little or no guidance to the federal courts in deciding how the state courts would rule on a question, then the experience of the federal district court judge in state law matters should play a significant role on appeal. The Note concludes that, absent a means for accurately predicting how a state's courts will one day decide a matter of state law,(fn9) a deferential standard of review similar to that applied by the other circuits(fn10) provides the most reliable and judicially prudent result.

II. Procedural History of McLinn

In re McLinn was an admiralty action brought in the United States District Court for the District of Alaska.(fn11) The outcome of the action depended in part on the interpretation of an Alaska statute that imposed liability for the negligent operation of any "watercraft . . . devoted to recreational pursuits."(fn12) The trial court had to determine whether a seine skiff not normally used for recreation was a "watercraft" within the meaning of the statute. The statute had not yet been interpreted by the Alaska Supreme Court and reasonably could have been construed to favor either party.(fn13)

The district court decided in favor of defendants, granting partial summary judgment. On appeal, the three-judge circuit court of appeals requested an en banc hearing of the Ninth Circuit to determine the proper standard for reviewing the district court's interpretation of the statute. The appellate court determined that there was some confusion in the Ninth Circuit regarding the proper standard of review to be applied to a district court's ruling on state law.(fn14) The court furthermore believed that the standard of review it employed would affect the outcome of the case: if the panel reviewed the district court's decision under the deferential standard normally employed in the Ninth Circuit, the panel would affirm; but if the panel reviewed the decision under a non-deferential standard, it would reverse.(fn15) The request for a hearing was granted, and in a six-to-five decision the Ninth Circuit held that the standard of review that applied when reviewing questions of federal law also should be applied when reviewing questions of state law, the result being that the court of appeals would no longer defer to a district court's interpretation of state law.(fn16)

III. Ascertaining State Law

Federal courts are regularly confronted by questions of state law that have not been decided by the courts of the state in which the federal court sits. Although a federal district court judge usually must decide even difficult questions of state law, in certain circumstances the federal judge may abstain from deciding a question,(fn17) or wait until a state ruling has been obtained through certification of the question by the state supreme court.(fn18) But if the federal court chooses to resolve the question, it must do so by trying to ascertain how the state supreme court would resolve it.(fn19) In such instances the federal court must exercise its independent judgment to determine what the legislature intended in passing the statute or what common law rule the courts might adopt, guided by analogous state court decisions, if any, and by the court's own reasoning and experience. The federal district court must consider any data tending to show convincingly what the state law is, including decisions from other jurisdictions, other federal decisions, the American Law Institute's Restatement of the Law, scholarly treatments of the law, and any other pertinent authority.(fn20)

Once the federal district court rules on the question of state law, the parties may appeal the decision to the appropriate circuit court of appeals.(fn21) In the Ninth Circuit, an appeal must identify the proper standard of review for each contention raised.(fn22)

The proper standard for reviewing a federal court's findings of fact is governed by Rule 52(a) of the Federal Rules of Civil Procedure, which provides that the trial court's findings of fact shall not be set aside unless clearly erroneous.(fn23) The Ninth Circuit has noted that one of the policy objectives of Rule 52(a) is to promote judicial efficiency by relieving the appellate courts of the burden of completely reviewing the evidence.(fn24) The primary policy underlying the deferential standard of Rule 52(a), however, is the recognition that a trial judge is in a better position than an appellate panel to evaluate the credibility of witnesses and to weigh the evidence. For this reason a circuit court of appeals must defer to a district court's findings of fact unless the findings are clearly erroneous.(fn25)

IV. Deferential Review in the Federal Courts

In the absence of a rule governing the standard of review to be given to a trial court's conclusions of law, the United States Supreme Court and a majority of the circuit courts of appeal have developed the practice of deferring to the interpretations of state law by federal district court judges.(fn26) Although no single standard of deference has emerged from the decisions, most of the circuits accord some form of "great weight" or "substantial deference" to the district court's determinations of state law.(fn27) A few of the circuits have applied a clearly wrong test, reversing the district court only for clear error, or when clearly wrong.(fn28)

The United States Supreme Court initiated the practice of deferring to lower federal courts on matters of unclear state law.(fn29) The Court has recognized that federal district and circuit court judges are in a better position to ascertain state law because the lower federal courts deal regularly with questions of state law and are more often than not better acquainted with, and therefore "closer" to, the law of the states in which they sit.(fn30) The Court has stated that it will "leave undisturbed the interpretation placed upon purely local law by a . . . federal judge of long experience and by three circuit judges whose circuit includes [the state whose law is in question]."(fn31) By the same token, the Court has reversed decisions of the lower federal courts when they were not in an adequate position to make a "confident guess" as to how the state courts would have decided an issue.(fn32)

The Supreme Court's...