A more thorough explanation:

The Erie/Klaxon doctrine is a principle in conflict of laws that requires a federal court to apply the choice-of-law rules of the state where the court is located when exercising diversity jurisdiction. This means that the federal court must follow the state law in determining which state's law applies to the case.

For example, if a federal court in California is hearing a case involving a contract dispute between a New York company and a California company, the court must apply California's choice-of-law rules to determine which state's law applies to the contract. This is because the court is located in California and must follow its laws.

The Erie/Klaxon doctrine is based on two landmark cases: Erie v. Tompkins and Klaxon Co. v. Stentor Elec. Mfg. Co. In Erie, the Supreme Court held that federal courts must apply state law in cases involving state law claims. In Klaxon, the Court extended this rule to choice-of-law issues.