Gasperini v. Center for Humanities, Inc.

Facts

William Gasperini, a journalist, began reporting on events in Central America in 1984 and took over 5,000 slide transparencies (color slides) there. In 1990 he agreed to supply his original color transparencies to The Center for Humanities, Inc. for use in an educational videotape. He selected 300 slides for the Center, and the videotape used 110 of them. The Center agreed to return the originals but, when the project ended, could not find them. Gasperini, a California citizen, sued the Center, a New York corporation, in federal court in New York on the basis of diversity of citizenship. He pleaded state-law claims, including breach of contract, conversion, and negligence. The Center conceded liability, so only damages went to a jury. Gasperini's expert testified that the industry standard valued a lost transparency at $1,500, the average license fee a commercial photograph could earn over the full course of the photographer's copyright. Gasperini testified that his earnings from photography totaled just over $10,000 for 1984 through 1993. After a three-day trial, the jury awarded $450,000, which the foreperson explained as $1,500 each for 300 slides. The Center moved for a new trial under Federal Rule of Civil Procedure 59, arguing among other things that the verdict was excessive. The District Court denied the motion without comment.

Issues

1. Does New York's standard for reviewing jury awards, under which an award is excessive if it deviates materially from what would be reasonable compensation, apply in a federal diversity case governed by New York law?
2. Can a federal court give effect to that state standard consistently with the Seventh Amendment's Reexamination Clause and the federal division of work between trial and appellate courts, and if so, which court applies it?

Holding

New York's "deviates materially" standard governs a diversity case on New York claims. It can be given effect without detriment to the Seventh Amendment if the federal trial judge applies it and the court of appeals reviews that ruling only for abuse of discretion.