Gasperini v. Center for Humanities, Inc.
518 U.S. 415, 116 S. Ct. 2211, 135 L. Ed. 2d 659 (1996)

  • Gasperini, a photo-journalist, loaned 300 slides to the Center for Humanities, who then lost them. Gasperini sued in the Federal Court.
    • The Center conceded liability (aka they admitted that they lost the slides).
  • The Trial Court awarded Gasperini $1,500 per slide (for a total of $450k!).
    • That’s what Gasperini said was the industry standard of compensation for a lost slide.
  • The Center moved for a new trial, contending that the verdict was excessive.
    • The Center argued that Gasperini had only earned $10k over the past 10 years from selling his photographs, so it was ridiculous to give him $450k.
  • The Trial Court denied the motion. The Center appealed.
  • The Federal Appellate Court reversed. Gasperini appealed.
    • The Federal Appellate Court noted that New York law governed since this was a diversity case.
      • That’s the Erie Doctrine.
    • Under New York law, appellate courts can review the size of jury verdicts and to order new trials when the jury’s award “deviates materially from what would be reasonable compensation.”
      • Under Federal common law, jury verdicts can only be overturned if they shock the conscious of the judge.
    • On the other hand, under the 7th 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.” That would imply that an Appellate Court doesn’t have the authority to overturn a jury’s decision about damage awards.
    • The Federal Appellate Court found that the $450k verdict “materially deviates from what is reasonable compensation.”
      • They came to this conclusion after looking at New York State court decisions about how much to award for lost slides.
  • The US Supreme Court affirmed.
    • The US Supreme Court found that that New York’s law controlling compensation awards can be used, without violating to the 7th Amendment.
    • The Court noted that if New York had a statutory hard cap on damages (say $250k max), then clearly you would use the New York State cap, since that’s State law. The Court felt that the New York’s “standard of reasonableness” is really the same thing as a hard cap statutory limit, it just isn’t a hard number. Therefore, the State law is substantive and needs to be used.
  • In a dissent it was argued that the 7th Amendment says that a finding by a jury cannot be reexamined, except by the rules of common law. The Federal common law standard is the shock the conscious standard and that’s what should be used.
  • One interesting point about this case is that the majority and the dissent saw two completely different issues with this case. With most Supreme Court cases, how you couch the question often makes a big difference as to what answer you get.