|Syllabus ||Dissent |
[ Stevens ]
[ Scalia ]
[ Ginsburg ]
WILLIAM GASPERINI, PETITIONER v. CENTER
FOR HUMANITIES, INC.
on writ of certiorari to the united states court of appeals for the second circuit
The Court correctly explains why the 1986 enactment of §5501(c) of the New York Civil Practice Law and Rules (McKinney 1995) changed the substantive law of the State. A state law ceiling on allowable damages, whether fixed by a dollar limit or by a standard that forbids any award that "deviates materially from what would be reasonable compensation," ibid., is a substantive rule of decision that federal courts must apply in diversity cases governed by New York law.
I recognize that state rules of appellate procedure do not necessarily bind federal appellate courts. The majority persuasively shows, however, that New York has not merely adopted a new procedure for allocating the decision making function between trial and appellate courts.
Ante, at 5-9. Instead, New York courts have held that all jury awards, not only those reviewed on appeal, must conform to the requirement that they not "deviat[e] materially" from amounts awarded in like cases. Ante, at 8-9. That New York has chosen to tie its damages ceiling to awards traditionally recovered in similar cases, rather than to a legislatively determined but inflexible monetary sum, is none of our concern.
Given the nature of the state law command, the Court of Appeals for the Second Circuit correctly concluded in Consorti v. Armstrong World Industries, Inc., 64 F. 3d 781, superseded by 72 F. 3d 1003 (1995), that New York's excessiveness standard applies in federal court in diversity cases controlled by New York law. Consorti erred in basing that conclusion in part on the fact that a New York statute requires that State's appellate division to apply the standard, but it was nevertheless faithful to the Rules of Decisions Act, as construed in Erie R. Co. v. Tompkins, 304 U.S. 64 (1938), in holding that a state law limitation on the size of a judgment could not be ignored. [n.1] Similarly, the Court of Appeals correctly followed Consorti in this case and considered whether the damages awarded materially deviated from damages awarded in similar cases. 66 F. 3d 420, 431 (CA2 1995). I endorse both opinions in these respects.
Although the majority agrees with the Court of Appeals that New York law establishes the size of the damages that may be awarded, it chooses to vacate and remand. The majority holds that a federal court of appeals should review for abuse of discretion a district court's decision to deny a motion for new trial based on a jury's excessive award. As a result, it concludes that the District Court should be given the opportunity to apply in the first instance the "deviates materially" standard that New York law imposes. Ante, at 23.
The District Court had its opportunity to consider the propriety of the jury's award, and it erred. The Court of Appeals has now corrected that error after "drawing all reasonable inferences in favor of" petitioner. 66 F. 3d, at 431. As there is no reason to suppose that the Court of Appeals has reached a conclusion with which the District Court could permissibly disagree on remand, I would not require the District Court to repeat a task that has already been well performed by the reviewing court. I therefore would affirm the judgment of the Court of Appeals.
Although I have addressed the question presented as if our decision in Erie alone controlled its outcome, petitioner argues that the second clause of the Seventh Amendment, which states that "no fact tried by jury, shall be otherwise re examined in any Court of the United States, than according to the rules of the common law," U. S. Const., Amdt. VII, bars the procedure followed by the Court of Appeals. There is no merit to that position.
Early cases do state that the Reexamination Clause prohibits appellate review of excessive jury awards, but they do not foreclose the practice altogether. See, e.g., Southern Railway Carolina Div. v. Bennett, 233 U.S. 80, 87 (1914) ("It may be admitted that if it were true that the excess appeared as [a] matter of law; that if, for instance, the statute fixed a maximum and the verdict exceeded it, a question might arise for this court"); 11 C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure §2820, pp. 207-209 (2d ed. 1995). Indeed, for the last 30 years, we have consistently reserved the question whether the constitution permits such review, ante, at 18-19, and, in the meantime, every Court of Appeals has agreed that the Seventh Amendment establishes no bar. 11 Wright & Miller, §2820, at 209.
Taking the question to be an open one, I start with certain basic principles. It is well settled that jury verdicts are not binding on either trial judges or appellate courts if they are unauthorized by law. A verdict may be insupportable as a matter of law either because of deficiencies in the evidence or because an award of damages is larger than permitted by law. If an award is excessive as a matter of law--in a diversity case if it is larger than applicable state law permits--a trial judge has a duty to set it aside. A failure to do so is an error of law that the court of appeals has a duty to correct on appeal.
These principles are sufficiently well established that no Seventh Amendment issue would arise if an appellate court ordered a new trial because a jury award exceeded a monetary cap on allowable damages. That New York has chosen to define its legal limit in less mathematical terms does not require a different constitutional conclusion.
New York's limitation requires a legal inquiry which cannot be wholly divorced from the facts, but that quality does not necessarily make the question one for the factfinder rather than the reviewing court. Three times this Term we have assigned appellate courts the task of independently reviewing similarly mixed questions of law and fact. See Ornelas v. United States, 517 U. S. ___ (1996) (slip op., 6-7); Markman v. Westview Instruments, 517 U. S. ___ (1996) (slip op., at 18-20); Thompson v. Keohane, 516 U. S. ___ (1995) (slip op., at 12-16). Such appellate review is proper because mixed questions require courts to construe all record inferences in favor of the factfinder's decision and then to determine whether, on the facts as found below, the legal standard has been met. See Ornelas, 517 U. S., at ___ (slip op., at 7) (quoting Pullman Standard v. Swint, 456 U.S. 273, 289, n. 19 (1982). In following that procedure here, the Court of Appeals did not reexamine any fact determined by a jury. 66 F. 3d, at 431. It merely identified that portion of the judgment which constitutes "unlawful excess." See Dimick v. Schiedt, 293 U.S. 474, 486 (1935). [n.2]
Even if review by the Court of Appeals implicates the Reexamination Clause, it was "according to the rules of the common law." U. S. Const., Amdt. VII. At common law, the trial judge sitting nisi prius recommended whether a judicial panel sitting en banc at Westminster should accept the jury's award. The en banc court then ruled on the motion for new trial and entered judgment. 11 Wright & Miller, §2819, at 203
Petitioner correctly points out that under this procedure motions for new trial based on excessiveness were not technically subject to appellate review. Riddell, New Trial at the Common Law, 26 Yale L. J. 49, 57 (1916) ("It seems clear that in criminal as in civil cases, the trial Judge had not the power to grant a new trial, but that recourse must be had to `the Court above' "), id., at 60. However, because the nisi prius judge often did not serve on the en banc court, the "court above" was in essentially the same position as a modern court of appeals. It considered the legality of the jury's award in light of the trial judge's opinion, but without any firsthand knowledge of what had transpired below. See Blume, Review of Facts in Jury Cases--The Seventh Amendment, 20 J. Am. Jud. Soc. 130, 131 (1936). [n.3]
Petitioner also contends that at common law the en banc court could only grant a new trial if the trial judge so recommended. That contention is undermined by numerous cases in which the "court above" granted new trials without making any reference to the trial judge's view of the damages. See, e.g., Honda Motor Co. v. Oberg, 512 U. S. ___, ___ (1994) (slip op., at 5-7) (citing cases). [n.4] Moreover, early English cases repeatedly state that the power to order a new trial when the jury returned an excessive award rested with "the Court," rather than the judge below, [n.5] and Blackstone identifies excessive damages as an independent basis on which the "court above" may grant a new trial but makes no mention of a requirement that the trial judge must so recommend. 3 W. Blackstone, Commentaries *387.
Even when read most favorably to petitioner, therefore, no meaningful distinction exists between the common law practice by which the "court above" considered a new trial motion in the first instance, and the practice challenged here, by which an appellate court reviews a district court's ruling on a new trial motion. See Riddell, 26 Yale L. J., at 57. As Justice Stone explained, in a dissenting opinion joined by Chief Justice Hughes, Justice Brandeis, and Justice Cardozo:
"[The Seventh Amendment], intended to endure for unnumbered generations, is concerned with substance and not with form. There is nothing in its history or language to suggest that the Amendment had any purpose but to preserve the essentials of the jury trial as it was known to the common law before the adoption of the Constitution. For that reason this Court has often refused to construe it as intended to perpetuate in changeless form the minutiae of trial practice as it existed in the English courts in 1791. From the beginning, its language has been regarded as but subservient to the single purpose of the Amendment, to preserve the essentials of the jury trial in actions at law, serving to distinguish them from suits in equity and admiralty, see Parsons v. Bedford, 3 Pet. 433, 446, and to safeguard the jury's function from any encroachment which the common law did not permit.
"Thus interpreted, the Seventh Amendment guarantees that suitors in actions at law shall have the benefits of trial of issues of fact by a jury, but it does not prescribe any particular procedure by which these benefits shall be obtained, or forbid any which does not curtail the function of the jury to decide questions of fact as it did before the adoption of the Amendment. It does not restrict the court's control of the jury's verdict, as it had previously been exercised, and it does not confine the trial judge, in determining what issues are for the jury and what for the court, to the particular forms of trial practice in vogue in 1791." Dimick v. Schiedt, 293 U. S., at 490-491.
Because the Framers of the Seventh Amendment evinced no interest in subscribing to every procedural nicety of the notoriously complicated English system, see Henderson, The Background of the Seventh Amendment, 80 Harv. L. Rev. 289, 290 (1966), the common law practice certainly does not demonstrate that the Reexamination Clause prohibits federal appellate courts from ensuring compliance with state law limits on jury awards.
Nor does early and intricate English history justify the more limited assertion that federal appellate courts must be limited to a particular, highly deferential standard of excessiveness review. Common law courts were hesitant to disturb jury awards, but less so in cases in which "a reasonably certain measure of damages is afforded." 1 D. Graham, Law of New Trials in Cases Civil and Criminal 452 (2d ed. 1855); G. Washington, Damages in Contract at Common Law, 47 L. Q. Rev. 345, 363-364 (1931).
Here, New York has prescribed an objective, legal limitation on damages. If an appellate court may reverse a jury's damages award when its own conscience has been shocked, 66 F. 3d, at 430, or its sense of justice outraged, Dagnello v. Long Island R. Co., 289 F. 2d 797, 802 (CA2 1961); cf. Honda Motor Co. v. Oberg, 512 U. S., at ___ (1994) (citing English cases), it may surely follow a sovereign's command that it do so when a jury has materially deviated from awards granted by other juries. If anything, the New York standard, though less deferential, is more certain. [n.6]
For the reasons set forth above, I agree with the majority that the Reexamination Clause does not bar federal appellate courts from reviewing jury awards for excessiveness. I confess to some surprise, however, at its conclusion that " `the influence--if not the command-- of the Seventh Amendment,' " ante, at 16 (quoting Byrd v. Blue Ridge Rural Elec. Cooperative, Inc., 356 U.S. 525, 537 (1958), requires federal courts of appeals to review district court applications of state law excessiveness standards for an "abuse of discretion." Ante, at 22.
The majority's persuasive demonstration that New York law sets forth a substantive limitation on the size of jury awards seems to refute the contention that New York has merely asked appellate courts to reexamine facts. The majority's analysis would thus seem to undermine the conclusion that the Reexamination Clause is relevant to this case.
Certainly, our decision in Byrd does not make the Clause relevant. There, we considered only whether the Seventh Amendment's first clause should influence our decision to give effect to a state law rule denying the right to a jury altogether. Byrd v. Blue Ridge Rural Elec. Cooperative, Inc., 356 U. S., at 537. That holding in no way requires us to consult the Amendment's second clause to determine the standard of review for a district court's application of state substantive law.
My disagreement is tempered, however, because the majority carefully avoids defining too strictly the abuse of discretion standard it announces. To the extent that the majority relies only on "practical reasons" for its conclusion that the Court of Appeals should give some weight to the District Court's assessment in determining whether state substantive law has been properly applied, ante, at 22, I do not disagree with its analysis.
As a matter of federal court administration, we have recognized in other contexts the need for according some deference to the lower court's resolution of legal, yet fact intensive, questions. See Ornelas v. United States, 517 U. S., at ___ (slip op., at 9-10); Pierce v. Underwood, 487 U.S. 552, 558, n. 1 (1988). Indeed, it is a familiar, if somewhat circular, maxim that deems an error of law an abuse of discretion.
In the end, therefore, my disagreement with the label that the majority attaches to the standard of appellate review should not obscure the far more fundamental point on which we agree. Whatever influence the Seventh Amendment may be said to exert, Erie requires federal appellate courts sitting in diversity to apply "the damage control standard state law supplies." Ante, at 22.
Because I would affirm the judgment of the Court of Appeals, and because I do not agree that the Seventh Amendment in any respect influences the proper analysis of the question presented, I respectfully dissent.
1 Because there is no conceivable conflict between Federal Rule of Civil Procedure 59 and the application of the New York damages limit, this case is controlled by Erie and the Rules of Decisions Act, rather than by the Rules Enabling Act's limitation on federal procedural rules that conflict with state substantive rights. See Ely, The Irrepressible Myth of Erie, 87 Harv. L. Rev. 693, 698 (1974); see also Sibbach v. Wilson & Co., 312 U.S. 1 (1941). The Rule does state that new trials may be granted "for any of the reasons for which new trials have heretofore been granted in actions at law in the courts of the United States," but that hardly constitutes a command that federal courts must always substitute federal limits on the size of judgments for those set by the several States in cases founded upon state law causes of action. Even at the time of the Rule's adoption, federal courts were bound to apply state statutory law in such cases.
2 I thus disagree with Justice Scalia's view that there is a separate federal standard to "determine whether the award exceeds what is lawful to such degree that it may be set aside by order for new trial or remittitur." Post, at 17. In my view, if an award "exceeds what is lawful," ibid., legal error has occurred and may be corrected. Certainly Dimick does not premise a court's power to overturn an award that exceeds lawful limits on the degree of the excess.
3 For that reason, Justice Scalia is wrong to contend that the court at Westminster acted in no more of an appellate fashion when it entertained motions for new trials in causes tried at bar than when it entertained them in causes tried at nisi prius. Post, at 9. In the former cases, the en banc court would entertain a motion for new trial after having heard the evidence itself. In the latter, it would sometimes entertain the motion only after having heard the report on the evidence of the nisi prius judge.
4 Although Honda itself involved review of punitive damages awards, we expressly noted that there was no basis for suggesting "that different standards of judicial review were applied for punitive and compensatory damages before the twentieth century," 512 U. S., at ___, n. 2 (slip op., at 6, n. 2). Indeed, many of the decisions we relied upon in Honda involved compensatory damages, and there is some authority to suggest that judicial review of the former has a more secure historical pedigree than does judicial review of the latter.
5 See, e.g., Bright v. Eynon, 1 Burr. 390, 97 Eng. Rep. 365, 368 (K. B. 1757) (Denison, J., concurring) ("[T]he granting a new trial, or refusing it, must depend upon the legal discretion of the Court; guided by the nature and circumstances of the particular case, and directed with a view to the attainment of justice"); Wood v. Gunston, Sty. 466 82 Eng. Rep. 867 (K. B. 1655) ("It is in the discretion of the Court in some cases to grant a new tryal, but this must be a judicial and not an arbitrary discretion, and it is frequent in our books for the Court to take notice of miscarriages of juries, and to grant new tryals upon them . . .").
6 Our per curiam decision in Donovan v. Penn Shipping Co., 429 U.S. 648 (1977), provides no support for the proposition that federal appellate courts are confined to a federal standard of excessiveness. That case held only that a plaintiff who had consented to a remittitur could not challenge its adequacy on appeal. Id., at 649. Although we stated in dicta that "[t]he proper role of the trial and appellate courts in the federal system in reviewing the size of jury verdicts is, however, a matter of federal law," ibid., that broad statement was supported by citation to two cases, Hana v. Plumer, 380 U.S. 460 (1965), and Byrd v. Blue Ridge Rural Elec. Cooperative, Inc., 356 U.S. 525 (1958), which did not involve the review of jury awards.