Since 1938 the federal courts have been most assiduous in following the decisions of the State courts in diversity cases. The decisions followed, moreover, include not only those of the highest State courts, but those also of intermediate courts. In West v. American Telephone and Telegraph Co.[555] the Supreme Court held that a decision of an Ohio county court of appeals which the Supreme Court of the State had declined to review was binding on the lower federal courts regardless of the desirability of the rule of the decision or of the belief that the highest court of the State might establish a different rule in future litigation. In Fidelity Union Trust Co. v. Field[556] the Court went even farther and ruled that the lower courts were bound to follow the decisions of two chancery courts in New Jersey although there had been no appeal to the highest State court, and obviously other New Jersey courts were not bound by the decisions of two vice-chancellors. The anomaly of this decision was partially removed in King v. Order of United Commercial Travelers,[557] where the Court held that the federal courts were not bound by the decision of a court of first instance of South Carolina, which was the only decision applicable to the interpretation of the insurance policy in dispute. Nor is this the whole story. In the event of a State Supreme Court's reversal of its earlier decisions the federal courts are bound by the latest decision. Hence a judgment of a federal district court, correctly applying State law as interpreted by the State's highest court, must be reversed on appeal if the State court in the meantime has reversed its earlier rulings and adopted a contrary interpretation. Though aware of possible complications from this rule, the Court insisted that "until such time as a case is no longer sub judice, the duty rests upon the federal courts to apply the Rules of Decision statute in accordance with the then controlling decision of the highest state court."[558]
Although the Rules of Decision Act[559] requires the federal courts to follow State decisions only in civil cases, the application of the Tompkins rule has been extended to suits in equity.[560] In Guaranty Trust Co. v. York,[561] the Court held that when a statute of limitations barred recovery in a State court, a federal court sitting in equity could not entertain the suit because of diversity of citizenship. This ruling was based on the express premise that "a federal court adjudicating a State-created right solely because of the diversity of citizenship of the parties is for that purpose, in effect, only another court of the State, * * * "[562] It was held to be immaterial, therefore, whether statutes of limitations were designated as substantive or procedural. The Tompkins Case, it was said, was not an endeavor to formulate scientific legal terminology. "In essence, the intent of that decision was to insure that, in all cases where a federal court is exercising jurisdiction solely because of the diversity of citizenship of the parties, the outcome of the litigation in the federal court should be substantially the same, so far as legal rules determine the outcome of a litigation, as it would be if tried in a State court."[563]
Controversies Between Citizens of the Same State Claiming Lands Under Grants of Different States
This clause was not in the first draft of the Constitution, but was added without objection.[564] Undoubtedly the motivation for this extension of the judicial power was the existence of boundary disputes affecting ten States at the time the Philadelphia Convention met. With the Northwest Ordinance of 1787, the ultimate settlement of boundary disputes between States, and the passing of land grants by States, this clause, never productive of many cases, has become obsolete.[565]
Controversies Between a State, or the Citizens Thereof, and Foreign States, Citizens or Subjects
The scope of this jurisdiction has been limited both by judicial decisions and the Eleventh Amendment. By judicial application of the Law of Nations a foreign State is immune from suit in the federal courts without its consent,[566] an immunity which extends to suits brought by States of the American Union.[567] Conversely, the Eleventh Amendment has been construed to bar suits by foreign States against a State of the American Union.[568] Consequently, the jurisdiction conferred by this clause comprehends only suits brought by a State against citizens or subjects of foreign States, by foreign States against American citizens, citizens of a State against the citizens or subjects of a foreign State, and by aliens against citizens of a State.
SUITS BY FOREIGN STATES
The privilege of a recognized foreign State to sue in the courts of a foreign State upon the principle of comity is recognized by both International Law and American Constitutional Law.[569] To deny a sovereign this privilege "would manifest a want of comity and friendly feeling."[570] Although national sovereignty is continuous, a suit in behalf of a national sovereign can be maintained in the courts of the United States only by a government which has been recognized by the political branches of our own government as the authorized government of the foreign State.[571] Once a foreign government avails itself of the privilege of suing in the courts of the United States, it subjects itself to the procedure and rules of decision governing those courts and accepts whatever liabilities the Court may decide to be a reasonable incident of bringing the suit.[572] Also, certain of the benefits extending to the domestic sovereign do not extend to a foreign sovereign suing in the courts of the United States. Thus a foreign sovereign does not receive the benefit of the rule which exempts the United States and its member States from the operation of the statute of limitations, because considerations of public policy back of the rule are regarded as absent.[573]
Indian Tribes