18. Should the court grant the soldier's motion to dismiss?

Post-Erie, federal common law is still applied in certain instances, even when the basis for federal jurisdiction is diversity. In determining whether to apply federal common law in diversity cases whose subject matter bears some relation to a federal statute, courts employ a balancing test, which weighs federal interests against state interests.

In Byrd v. Blue Ridge Rural Electric Coop., the Court found that federal courts sitting in diversity should apply the federal rule if it is uncertain whether a different result would follow if they apply the federal rule rather than the state rule. 356 U.S. 525 (1958).

The Court directly addressed the issue of defenses based on federal law in Boyle v. United Technologies Corp., 487 U.S. 500 (1988). The Court held that when a federal common law defense is necessary to avoid a significant conflict between federal interests and the state law that supplies the actionable claim, that federal common law defense may preempt state law when there is a unique or peculiar federal interest and the state law is in direct conflict with the federal law.

B is correct. Erie did not take away the authority of federal courts to create and apply «federal common law.» Federal courts will apply federal common law in certain instances, even if the basis for federal jurisdiction is diversity. In diversity cases involving subject matter that bears some relation to a federal statute, courts will balance federal and state interests around whether to apply federal common law. Boyle held that a federal common law defense may preempt a conflicting state law if a unique federal interest is at stake.

Here, the court is likely to find that a tort defense relating to a federal military base is important enough to apply federal common law. There is no indication that a competing state interest exists that would outweigh such a finding.

A is incorrect. This answer reaches the correct answer with incorrect legal reasoning. The court should grant the soldier's motion to dismiss, not because the civilian's suit is automatically invalid under federal preemption. The court should weigh the importance of applying the soldier's defense based on federal common law before granting the motion.

C is incorrect. Although the Erie decision did make it clear that there is no general federal common law, federal courts sitting in diversity still apply federal common law in narrow instances. This includes cases involving peculiarly strong federal interests, such as here, where the court will likely find tort protections of armed service members to be a peculiarly strong federal interest.

D is incorrect. A federal court sitting in diversity would apply the choice-of-law rules of the state in which the federal court is situated (here, State B), not federal choice-of-law rules.