Laws can be classified according to their origin or to who is to implement them. Legislation can come from bills passed by the Senate or House of Representatives. Laws can also originate from the chief executive or the president. Another body of laws is derived from the Constitution and directly issues such laws under the jurisdiction of federal government agencies. Such laws are referred to as federal common law. These pieces of legislation have originated from the federal courts in their interpretation and implementation of the law within the court system.
Two doctrines have clarified the extent of federal common law. The Swift doctrine, which originated from the Swift v. Tyson case of 1842, states that federal courts had diversity jurisdiction over violations of state statutory laws but not state common laws. However, the Supreme Court stated that the federal courts have the ability to create their own common laws with the essential spirit and principles of the law as their basis. The Erie doctrine overruled the Swift doctrine when in 1938, the Supreme Court stated that there is no general federal common law, and that substantive law must be exercised.
The aforementioned doctrines attempted to clarify what federal common law encompassed, but did not abolish it. Thus, federal common law is developed when Congress allows federal courts to create substantive laws regarding certain matters or when a decision from a federal court proves to be necessary in defending federal interests. Nonetheless, Congress as the only authorized legislature has the power to validate or reject anything that submits itself as federal common law.