Digesting an opinion by The Honorable John K. Bush, U.S. Court of Appeals for the Sixth Circuit (Judge Bush had no role in WLF’s selecting or editing this opinion for this publication).

Introduction to the Opinion: In Lindenberg v. Jackson Nat’l Life Ins. Co., 912 F.3d 348 (6th Cir. 2018), the Sixth Circuit held that Tennessee common law permits courts to award punitive damages to a plaintiff who is suing an insurer for bad-faith refusal to pay on a policy. The court also ruled that the state statute that capped Lindenberg’s punitive-damage award at $500,000 violated the Tennessee Constitution’s guarantee of a jury trial. The insurer petitioned the Sixth Circuit for rehearing en banc, which the court denied. Judge Bush’s dissent from that denial argues that because Tennessee’s highest court has not ruled definitively on either question of state law before the federal court, the Sixth Circuit should have certified those issues to the state supreme court. The dissent explains the principles of constitutional federalism and judicial comity that underlie federal courts’ certification of state-law issues to state courts and notes how federal-court guesswork can lead to detrimental forum shopping.

JOHN K. BUSH, Circuit Judge, dissenting from the denial of rehearing en banc.

This case presents an unusually strong set of reasons for certification to the Tennessee Supreme Court of state-law questions. It also highlights the need for our circuit to clarify and define certification standards to address the constitutional federalism considerations that underlie Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938). I therefore respectfully dissent from the denial of rehearing.

To explain the reasons for my dissent, some history first is in order. The “judicial Power” of Article III extends to, among other categories, “Controversies … between Citizens of different States” and between state citizens and foreign citizens or subjects. U.S. Const. art. III, § 2. A common Antifederalist criticism of the United States Constitution was that it granted too much power to federal courts at the expense of states generally and state judiciaries in particular. Responding to Antifederalist criticism, Federalists defended federal-court authority to hear such cases—what would be called diversity jurisdiction—as a way to give out-of-state or foreign litigants a fair shake in court. Federal courts were thought to have less bias than state courts in favor of in-state parties, and diversity jurisdiction was designed to address the perceived unfairness of state courts. Diversity jurisdiction did not violate federalism principles because it did not deputize federal courts to apply a different law than would have applied in the case had it been decided in state court.