Gasperini v. Center for Humanities
Citation and Court
518 U.S. 415 (1996) — Supreme Court of the United States
Facts
William Gasperini, a journalist, sued the Center for Humanities for losing his collection of photographic slides. A jury awarded him $450,000 in compensatory damages. The Center argued that New York’s CPLR § 5501(c) — which required appellate courts to review jury awards and order new trials when the award “deviates materially” from reasonable compensation — should apply in federal court. The Second Circuit applied the New York standard and ordered a new trial on damages.
Issue
Whether a federal court sitting in diversity must apply New York’s standard for appellate review of jury awards, and whether doing so violates the Seventh Amendment.
Holding
Yes. Federal courts sitting in diversity must apply New York’s “deviates materially” standard for reviewing jury awards, but it should be implemented by the district court (not the court of appeals) to avoid Seventh Amendment problems.
Rule / Doctrine
Erie requires applying the state standard for measuring the excessiveness of jury awards because that standard is bound up with state-created rights and its absence would lead to forum shopping. However, the Seventh Amendment’s Re-examination Clause limits the court of appeals’ ability to reweigh facts; therefore, the district court — not the appellate court — should conduct the review under the state standard using a deferential abuse-of-discretion approach.
Significance
Gasperini is a sophisticated Erie case illustrating how courts must accommodate both Erie’s command to apply state law and the Constitution’s structural limits on federal appellate review. It shows that Erie analysis can require splitting a rule — applying its substance while modifying its procedural mechanism to comply with federal constitutional requirements.