Brandeis’s statement in Erie that there is no "federal general common law” could not have meant that there is no federal common law. The same day that Erie was decided the Supreme Court handed down another decision, also authored by Brandeis, that held that an issue was governed by a federal common law rule.
There are lots of great articles by fed courts scholars on the scope of federal courts’ power to make federal common law, mostly concerning the role of separation of powers concerns on this power. The issue is not underexplored. What is underexplored is the following, my question for the day (parallel posted on Prawfsblawg):
A federal court might have the power to create federal common law, but decide that doing so is not advisable, out of constitutionally discretionary respect for Congress or the states. How can we tell whether a theory is really about federal courts’ power to create federal common law or just about when federal courts should, as a self-imposed limitation, choose not to? (This is not a rhetorical question. I’m really asking…)