Gasperini v. Center for Humanities Inc.

PETITIONER: Gasperini
RESPONDENT: Center for Humanities Inc.
LOCATION: Seminole Tribe

DOCKET NO.: 95-719
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Second Circuit

CITATION: 518 US 415 (1996)
ARGUED: Apr 16, 1996
DECIDED: Jun 24, 1996

ADVOCATES:
Jonathan S. Abady - Argued the cause for the petitioner
Theodore B. Olson - Argued the cause for the respondent

Facts of the case

William Gasperini, a journalist and photographer, loaned 300 original slide transparencies to the Center for Humanities, Inc. When the Center lost the transparencies, Gasperini commenced suit in the District Court. The Center conceded liability. A jury awarded Gasperini $1,500 per transparency, the asserted "industry standard" of compensation for a lost transparency. The Center moved for a new trial contending that the verdict was excessive. The District Court denied the motion. The Court of Appeals observed that New York law governed the controversy in this diversity case. Under New York law appellate courts are empowered to review the size of jury verdicts and to order new trials when the jury's award "deviates materially from what would be reasonable compensation." Contrarily, under the Seventh Amendment, "the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law." Guided by New York Appellate Division decisions reviewing damage awards for lost transparencies, the court held that the $450,000 verdict "materially deviates from what is reasonable compensation." The court vacated the judgment entered on the jury verdict and ordered a new trial, unless Gasperini agreed to an award of $100,000.

Question

Does New York's law that empowers appellate courts to review the size of jury's awards conflict with the Seventh Amendment's guarantee of jury trials in civil cases?

Media for Gasperini v. Center for Humanities Inc.

Audio Transcription for Oral Argument - April 16, 1996 in Gasperini v. Center for Humanities Inc.

William H. Rehnquist:

We'll hear argument first this morning in Number 95-719, William Gasperini v. The Center for Humanities, Inc.--

Mr. Abady.

Is that the correct pronunciation of your name?

Jonathan S. Abady:

Yes, it is, Mr. Chief Justice.

William H. Rehnquist:

You may proceed.

Jonathan S. Abady:

Mr. Chief Justice, and may it please the Court:

This case presents the question of whether a Federal appellate court, sitting in diversity, may apply a highly invasive State standard of review to overturn a jury's findings on compensatory damages in the absence of any error at trial, and after the district court judge has considered and denied a Rule 59 motion.

This Court must reverse the Second Circuit's decision for three principal reasons.

First, the Second Circuit's decision to apply a State rather than Federal standard of review violates the Seventh Amendment, the Rules of Decision Act, and this Court's precedent, most recently reaffirmed in a unanimous opinion in Browning-Ferris, where it was expressly held that in a diversity suit it is Federal and not State law that governs the standard of review.

Sandra Day O'Connor:

Mr. Abady, I guess you agree that the Federal district court had to look to New York substantive law--

Jonathan S. Abady:

Well--

Sandra Day O'Connor:

--for the cause of action and what recovery was allowed.

Jonathan S. Abady:

--Yes.

Yes.

State law controlled the substantive law which governed the cause of action and the elements that the jury could consider.

Sandra Day O'Connor:

Has the law in New York been determined to limit tort recovery to amounts that are reasonable?

Jonathan S. Abady:

Not--

Sandra Day O'Connor:

It's my understanding that that's the case law in New York.

Jonathan S. Abady:

--Not as a matter of substantive law at least with respect to--

Sandra Day O'Connor:

Well, why isn't that a matter of substance?

Jonathan S. Abady:

--Well, at least as to the--

Sandra Day O'Connor:

I mean, if New York said, no tort recovery can exceed $100,000, would that be a substantive--

Jonathan S. Abady:

--Yes, that would--

Sandra Day O'Connor:

--requirement?

Jonathan S. Abady:

--That would be a substantive--

Sandra Day O'Connor:

And what if the New York law says it has to be reasonable?

Is that not a substantive requirement?

Jonathan S. Abady:

--Not if the determination of reasonableness is a judicial determination by a reviewing court, as it is in New York under CPLR 5501(c).

5501(c) is a standard of review.

It is not a substantive--