Opinion ID: 181605
Heading Depth: 1
Heading Rank: 5

Heading: Declining to Apply Section 556 in Federal Court Would Disserve the Dual Aims of Erie

Text: Here, application of Section 556 would best serve the `twin aims of the Erie rule: discouragement of forum shopping and inequitable administration of the laws.' Commercial Union Ins. Co. v. Walbrook Ins. Co., 41 F.3d 764, 773 (1st Cir.1994) (quoting Stewart, 487 U.S. at 27 n. 6, 108 S.Ct. 2239 (1988)). If application of federal law would disserve these two policies, state law applies. Id. Plainly, Section 556 substantively alters Maine-law claims that are based on a defendant's protected petitioning activity by shifting the burden to the plaintiff and altering the showing the plaintiff must make. Me.Rev.Stat. tit. 14, § 556. Section 556 also allows courts to award attorney's fees to prevailing defendants, and alters the traditional common-law rule that, in libel cases, a plaintiff need not demonstrate specific damages to recover on a claim, as alleging damages per se does not satisfy Section 556's actual injury standard. See Schelling, 942 A.2d at 1232 (citing Restatement (Second) of Torts § 569, cmt. b (1977)). Declining to apply Section 556 in federal court would thus result in an inequitable administration of justice between a defense asserted in state court and the same defense asserted in federal court. See Commercial Union Ins. Co., 41 F.3d at 773. Likewise, were Section 556 not to apply in federal court, the incentives for forum shopping would be strong: electing to bring state-law claims in federal as opposed to state court would allow a plaintiff to avoid Section 556's burden-shifting framework, rely upon the common law's per se damages rule, and circumvent any liability for a defendant's attorney's fees or costs.