What authority is binding on a U.S. District Court for a breach of contract claim under Alabama state law?

A U.S. District Court is required to follow the interpretations and decisions made by the highest state court in the relevant jurisdiction when applying state law. In the context of a breach of contract claim under Alabama state law, the Supreme Court of Alabama serves as the authoritative source of state law. Its rulings establish the governing principles and legal standards that federal district courts in Alabama must adhere to when considering cases involving Alabama statutes or common law, such as breach of contract.

While cases from the U.S. Supreme Court can set binding precedents on federal law matters and cases from federal appellate courts provide guidance within their respective jurisdictions, they do not specifically dictate state law interpretations. Additionally, cases from a U.S. District Court, even if they are from the Middle District of Alabama, lack the authority to bind any other court outside of their proceedings. This distinction emphasizes the necessity for federal courts to rely on state supreme court rulings to accurately apply state law in their judgments.