Related: Bashman Archive
Where the statutory requirements for diversity of citizenship are satisfied, a federal district court possesses subject matter jurisdiction to decide a lawsuit governed by state law. The goal of the federal court system when adjudicating such a lawsuit is to reach the same result that a state court would reach. To that end, a federal court will apply state law as definitively announced by the highest court of the state in question. But where no state court of last resort ruling governs the question of state law to be resolved in federal court, it becomes the obligation of the federal courts to predict how the relevant state court of last resort would rule on the issue.
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