B. & W. TAXI. CO. v. B. & Y. TAXI. CO. Case Brief
Complete case briefs with LSD+
Every LSD.Law brief pairs a full IRAC analysis with opinion summaries at three levels of depth, written by a team of Harvard Law and MIT graduates - a quick synopsis when you are pressed for time, the complete reasoning when you need to go deep.
Adaptive Case Views
Toggle between Flash, Standard, and Expanded. Get what you need, when you need it.
Exam-Ready IRAC Format
We deliver the precise structure professors look for in exam answers.
Complex Cases, Clarified
We break down dense legal reasoning into something digestible, helping you grasp core concepts.
Case Brief Summary & Legal Analysis
tl;dr: A company reincorporated in another state to create diversity jurisdiction and enforce a contract in federal court. The Supreme Court upheld this maneuver and, applying federal general common law under Swift v. Tyson, validated the contract despite contrary state court precedent.
Legal Significance: This case represents the high-water mark of the Swift v. Tyson doctrine, allowing federal courts in diversity cases to ignore state common law on matters of “general law.” It was famously criticized by Justice Holmes and later overruled by Erie Railroad Co. v. Tompkins.
Case Facts & Court Holding
Key Facts & Case Background
A Kentucky taxicab company, aware that Kentucky courts deemed exclusive-privilege contracts with railroads void as against public policy, dissolved and reincorporated in Tennessee. The new Tennessee corporation then entered into the same exclusive contract with a Kentucky railroad. The purpose of this reincorporation was to create diversity of citizenship, enabling the company to sue a competing Kentucky taxicab company in federal court, where such contracts were considered valid under federal “general common law.” The defendant company challenged the federal court’s jurisdiction as collusively manufactured and argued that Kentucky’s common law rule should apply to invalidate the contract. The lower federal courts found jurisdiction proper and upheld the contract by applying federal common law.
Court Holding & Legal Precedent
Issue: In a diversity of citizenship case, must a federal court apply a state’s common law rule on a matter of general commercial law, or may it exercise its own independent judgment to apply a contrary federal common law rule?
The federal courts are not bound by the Kentucky state court decisions. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint oc
IRAC Legal Analysis
About IRAC analysis
IRAC (Issue, Rule, Analysis, Conclusion) is the structure professors expect in exam answers. Each LSD.Law brief states the issue, the governing rule with citations, the court's application of that rule, and the conclusion - the same reasoning pattern you will use on exams and in practice.
Legal Issue
In a diversity of citizenship case, must a federal court apply a state’s common law rule on a matter of general commercial law, or may it exercise its own independent judgment to apply a contrary federal common law rule?
Conclusion
This case is the quintessential example of the forum-shopping and inequitable administration Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad mi
Legal Rule
Under the doctrine of *Swift v. Tyson*, 41 U.S. (16 Pet.) 1 Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis au
Legal Analysis
The Court's analysis proceeded in two main parts. First, it addressed the Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugia
Flash-to-Full Case Opinions
Flash Summary
- A corporation’s motive for reincorporating in another state to create diversity