Here's a legal puzzle for you. The Supreme Court often says that when an issue of state law arises, the Supreme Court should generally defer to the construction of the state law held by the circuit court that includes the state. We saw this most recently in the pledge of allegiance case, Elk Grove Unified School Dist. v. Newdow, 542 U.S. 1, 16 (2004), where the Court stated that "[o]ur custom on questions of state law ordinarily is to defer to the interpretation of the Court of Appeals for the Circuit in which the State is located."

  The Supreme Court has based this rule on institutional competence concerns: circuit court judges are more likely to know and understand state law of local states than are Supreme Court Justices over in Washington, DC. See, e.g., Propper v. Clark, 337 U.S. 472, 486-487 (1949)("In dealing with issues of state law that enter into judgments of federal courts, we are hesitant to overrule decisions by federal courts skilled in the law of particular states unless their conclusions are shown to be unreasonable.").

  So far, so good. But now add in Salve Regina College v. Russell, 499 U.S. 22 (1991), a case on whether circuit courts should defer to district court interpretations of state law. In Russell, the Supreme Court held that circuit courts must not defer to district court determinations of state law; review must be de novo. The Supreme Court reasoned that trial judges have little time to give each case, while circuit courts are staffed by legal eagles who are really good at legal research, federal or state. The Court rejected the notion that district court judges from a state are more likely to understand state law than the appellate judges, who usually won't be from that state. The Court found this argument "to be founded fatally on overbroad generalizations":

[T]he bases of state law are as equally communicable to the appellate judges as they are to the district judge. To the extent that the available state law on a controlling issue is so unsettled as to admit of no reasoned divination, we can see no sense in which a district judge's prior exposure or nonexposure to the state judiciary can be said to facilitate the rule of reason.

The Court also added a constitutional argument, that the position was foreclosed by Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938).

  So here's the question: Can you reconcile these two lines of cases? If so, how? Why should the Supreme Court defer to Circuit Courts but Circuit Courts not defer to District Courts? (Oh, and no, I'm not writing on this — I'm just curious.)