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Gasperini v. Center for Humanities, Inc.

Supreme Court of the United States · 1996 · Civil Procedure

Civil ProcedureErie doctrinenew trial standarddamages reviewSeventh AmendmentErieSeventh AmendmentReexamination Clause

Facts

Gasperini supplied 300 original color slide transparencies to the Center for use in an educational videotape, and the Center later conceded liability when it could not find and return them. At trial on damages, Gasperini's expert testified that the photographic publishing industry's standard value for a lost transparency was $1,500, and the jury awarded exactly $1,500 for each of the 300 slides, for a total of $450,000. Gasperini had earned just over $10,000 from photography from 1984 through 1993 and testified that he intended to produce a book containing his best Central America photographs. The District Court denied the Center's motion for a new trial without comment, and the court of appeals then reviewed the size of the verdict under New York law.

Issue

In a diversity case governed by New York law, must a federal court apply New York's CPLR § 5501(c) standard for determining whether a jury's damages award is excessive, and if so, may a federal court of appeals apply that standard directly consistent with the Seventh Amendment? More specifically, can federal courts give effect to the substantive thrust of New York's damages-control rule without upsetting the federal allocation of authority between trial and appellate courts?

Rule

Under Erie, a federal court sitting in diversity must apply a state law standard that substantively controls the permissible size of damages awards. But the Seventh Amendment and the federal system's allocation of functions require that the state excessiveness standard be applied by the federal district court on a Rule 59 motion, while federal appellate review of that ruling is limited to abuse of discretion.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Maya Torres, a Nevada citizen, sued Lakefront Archive Services, Inc., a New York corporation, in federal court in Buffalo on a New York-law negligence claim after the company destroyed a collection of her original design mockups. A jury awarded Maya $900,000, and the defendant moved under Rule 59 for a new trial or remittitur on the ground that the award was excessive.

What standard should the federal district judge apply in deciding the Rule 59 motion?

Explanation. In a diversity case, a state rule aimed at controlling the amount recoverable is substantive for Erie purposes and must be given effect. The majority held that New York's materially-deviates standard governs excessiveness review of damages, but it is to be applied by the federal district court on the Rule 59 motion. The Seventh Amendment does not bar trial-court review of verdict size; it limits the allocation of review authority. (Derived from Gasperini v. Center for Humanities, Inc. (1996).)