Erie R. Co. v Tompkins- US Supreme Court (1938)

Ponda Baba, an Aqualish smuggler, was peacefully enjoying a drink in Chalmun's Cantina in Mos Eisley, Tatooine one afternoon when a young Jedi approached him, and began to hassle the bartender Wuher, one of Ponda's friends, for a beer. Seeing that the Jedi had not paid for his drink, and knowing how upset Wuher got when droids entered the cantina, even briefly, Ponda decided to stick up for his friend, and had his partner, Dr. Cornelius Evasan translate his dislike for the arrogant Jedi. Suddenly, an older Jedi appeared and unprovokedly sliced off Ponda's arm with a lightsaber.

Under Tatooine case law (law created by court decisions, rather than by legislative statutes), Jedi were given a certain amount of leeway (to prevent unnecessary Imperial attention), and Ponda knew that any planetary court was likely to dismiss any claim he filed against his attackers.

Ponda therefore decided to file a claim in Tatooine's Imperial District Court based on diversity of citizenship (usually only Imperial issues are tried in Imperial courts, but planetary issues are allowed when, as in Ponda's case, both parties are from different planets and the amount of damages requested exceeds 75,000 credits. This is known as diversity of citizenship, and is meant to protect the non-planetary resident from bias in a planetary court).

When a planetary issue is tried in Imperial Court, the court is required to apply planetary law rather than Imperial law, in order to prevent plaintiffs from bringing suit in Imperial law just to escape unfavorable planetary law (this is known as "forum shopping"). However, at the time Ponda brought his suit against the Jedis, the Imperial court was only required to apply "written" planetary law, which included planetary statutes, but not planetary case law. Since there was no Tatooine statute prohibiting Jedi violence in cantinas, the Imperial court was free to decide the case based on Imperial common law (basically however they wanted), and awarded Ponda his requested damages.

The Jedi appealed the ruling, which was affirmed by the Imperial Appellate Court, and finally petitioned the Imperial Supreme Court. The Imperial Supreme Court reversed the decision, and held in favor of the Jedi. They reasoned that allowing Imperial courts to apply Imperial common law in cases with only planetary issues created a loophole to the prohibition of forum shopping. Under the law as it was, anyone (like Ponda) could use diversity of citizenship as a means of avoiding bringing suit in a planetary court. They pointed to an earlier case (Black & White AT-ATs v Brown & Yellow AT-ATs), where an AT-AT rental company actually moved to a different planet in order to meet the requirements of diversity of citizenship and avoid planetary law. Based on that negative precedent, the Imperial Supreme Court reversed, and held that Imperial courts were hereinafter required to apply both planetary statutes AND planetary case law when deciding diversity of citizenship cases.