Resolving Equity's Erie Problem.

States are modernizing the use of equitable remedies for state law. Their authority to do so is widely accepted. But one thing stands in the way--the federal courts. Bound by "traditional equitable principles," federal courts dismiss state law claims seeking equitable remedies, even when state law makes the litigant's desired remedy available. Problematically, it is not clear where those traditional equitable principles come from, nor why or how they supplant state law--the very inquiries that the renowned Erie case requires. This Article examines what happens when traditional equitable principles face off against contemporary state law remedies. The resolution offered here preserves state law's remedial design while also accounting for traditional understandings of the federal judicial role in awarding equitable remedies. This Article argues that the traditional principles of equity should be understood as limitations on federal court subject matter jurisdiction. In fact, these principles historically served a jurisdictional function and continue to operate precisely like jurisdictional limits in operation and purpose but lack the formal classification. While federal courts frequently reference their "equitable jurisdiction," there has been no attempt to doctrinally justify traditional equitable principles as jurisdictional and entitled to the treatment that comes with the label. This Article provides that justification. To the extent that state remedial law exceeds the bounds of federal court jurisdiction, therefore, such cases should be adjudicated by state courts with the authority to act beyond equity's traditional limitations. [ABSTRACT FROM AUTHOR]