In resolving conflicts between state law and the federal rules, the initial step is to determine whether, when fairly construed, the scope of the federal rule is "sufficiently broad" to cause a "direct collision" with the state law or, implicitly, to "control the issue" before the court, thereby leaving no room for the operation of that law. The rule must then be applied if it represents a valid exercise of Congress' rulemaking authority, which originates in the U.S. Constitution and has been bestowed on the court by the Rules Enabling Act, 28 U.S.C.S. § 2072.
Respondents brought a tort action in Alabama state court to recover damages for injuries sustained in a motorcycle accident. Petitioner removed the case to a federal district court based upon proof of diversity jurisdiction. The trial court entered judgment in favor of respondents after a jury trial. Petitioner posted bond to stay the judgment, pending appeal, and the court of appeals affirmed without modification. The court of appeals then granted respondents' motion pursuant to Ala. Code § 12-22-72 (1986), for a mandatory affirmance penalty. Petitioner filed a petition for writ of certiorari to review the applicability of the mandatory affirmance penalty. On certiorari, the Court reversed, holding that the mandatory affirmance penalty had no application to the judgment entered by a federal diversity court because it conflicted with a federal rule of appellate procedure.
Does a mandatory affirmance penalty apply to a judgment entered by a federal court sitting in diversity?
The United States Supreme Court reversed, holding that the mandatory affirmance penalty had no application to the judgment entered by a federal court sitting in diversity because it conflicted with Fed. R. App. P. 38. Rule 38 of the Federal Rules of Appellate Procedure affords federal courts of appeals plenary discretion to award damages to an appellee upon determining that the appeal is frivolous. Federal Rule 38's discretionary mode of operation conflicts with the Alabama statute's mandatory operation. Furthermore, the purposes underlying Rule 38 -- to penalize frivolous appeals and to compensate injured appellees for the delay and added expense inherent therein -- are sufficiently coextensive with the statute's purposes to indicate that the Rule occupies the statute's field of operation. The fact that Alabama has a similar Appellate Rule coexisting with the statute does not mean that a federal court could impose the mandatory statutory penalty while remaining free to exercise its Federal Rule 38 discretionary authority, since the statute would improperly limit the exercise of that discretion in instances in which the court wished to impose a penalty of less than 10%.