How does Erie distinguish substantive from procedural law in practice?

• A. Substantive law governs processes of litigation; procedural law governs rights and obligations.
• B. Procedural law governs rights and obligations; substantive law governs the processes of litigation.
• C. Both are equally mixed and not different for diversity cases.
• D. Substantive law governs rights and obligations; procedural law governs the processes of litigation.

Answer: (D)

The key idea is that substantive law defines what rights and obligations people have, and what claims or defenses exist, while procedural law fixes how a case is brought and handled in court. In practice, Erie uses this distinction to guide conflict of laws in federal courts sitting in diversity: state substantive rules determine the rights and obligations of the parties, while federal procedural rules govern the conduct of the litigation—the steps, timing, and methods of proceeding. So the correct understanding is that substantive law governs rights and obligations, and procedural law governs the processes of litigation.