The United States Supreme Court determined in "Erie Railroad Co. v. Tompkins" (1938) that the law to be applied in a diversity case would be the law of whatever state in which the action was filed. This decision overturned precedents that had held that federal courts could create a general federal common law, instead of applying the law of the forum state. This decision was an interpretation of the word "laws" in 28 U.S.C. 1652, known as the Rules of Decision Act, to mean not just statutes enacted by the legislature but also the common law created by state courts.