The short version
A photojournalist's slides went missing, a jury valued them at $1,500 apiece, and a New York statute told courts to cut awards that "deviate materially" from reasonable compensation. In Gasperini v. Center for Humanities, Inc., 518 U.S. 415 (1996), the Supreme Court had to decide two things at once: whether a federal court sitting in diversity must use New York's tougher standard for excessive verdicts, and, if so, which federal judge applies it without running into the Seventh Amendment. Its answer split the statute in two. The standard is substantive and applies; the job of applying it belongs to the federal trial judge, with only limited review on appeal. For the full Erie framework, see our Erie doctrine guide.
| Citation | 518 U.S. 415 (1996), No. 95-719 |
| Court | Supreme Court of the United States, on review from the Second Circuit |
| Argued / decided | April 16, 1996 / June 24, 1996 |
| Vote and author | 5–4. Justice Ginsburg, joined by Justices O'Connor, Kennedy, Souter, and Breyer. Justice Stevens dissented; Justice Scalia dissented, joined by Chief Justice Rehnquist and Justice Thomas. |
| Disposition | Court of Appeals' judgment vacated; case sent back to the District Court to apply New York's standard |
| Holding | CPLR § 5501(c)'s "deviates materially" standard is substantive for Erie purposes and governs in federal court. The district judge applies it on a Rule 59 new-trial motion; the court of appeals reviews only for abuse of discretion. |
Facts: 300 lost slides and an "industry standard" verdict
William Gasperini, "a journalist for CBS News and the Christian Science Monitor, began reporting on events in Central America in 1984." In 1990 he agreed to supply his original color transparencies to The Center for Humanities, Inc. "for use in an educational videotape, Conflict in Central America." In the Court's summary, he "loaned 300 original slide transparencies" to the Center, and "the Center lost the transparencies."
Gasperini sued in the Southern District of New York, invoking diversity jurisdiction. "The Center conceded liability," so trial was only about damages. "After a trial on damages, a jury awarded Gasperini $1,500 per transparency, the asserted "industry standard" of compensation for a lost transparency." That came to $450,000.
| Item | Detail |
|---|---|
| Plaintiff | Gasperini, journalist and photographer |
| Defendant | The Center for Humanities, Inc., producer of the educational video |
| What was lost | 300 original slide transparencies |
| Verdict | $1,500 per slide × 300 = $450,000 |
| Law governing the claim | New York state law, in federal court on diversity |
What CPLR § 5501(c) changed
"In 1986, as part of a series of tort reform measures, New York codified a standard for judicial review of the size of jury awards." Section 5501(c) directs New York's appellate courts to find an award excessive or inadequate if it "deviates materially from what would be reasonable compensation."
Before 1986, New York courts used the familiar "shock the conscience" test, the same loose standard federal courts used. The new statute replaced it. As the Court put it, § 5501(c) "influences outcomes by tightening the range of tolerable awards." That tightening is the whole problem: if federal judges in New York kept using the looser test, the same claim could produce a much bigger award across the street in federal court.
How the case reached the Supreme Court
| Court | What happened |
|---|---|
| District Court (S.D.N.Y.) | The Center moved for a new trial, arguing the verdict was excessive. The judge denied the motion without comment. |
| Second Circuit | Applied § 5501(c) itself, found the award deviated materially from reasonable compensation, and ordered a new trial unless Gasperini accepted $100,000. |
| Supreme Court | Granted certiorari, argued April 16, 1996, and vacated the Second Circuit's judgment on June 24, 1996. |
The two questions
The reasoning: splitting § 5501(c) in two
The key move is to see that § 5501(c) does two different things, and the Court treated them differently.
Part 1: The standard ("deviates materially") — substantive, so it applies
The Court started from a point both sides accepted: "Gasperini acknowledges that a statutory cap on damages would supply substantive law for Erie purposes." A tighter review standard works like a soft cap. Applying Hanna's twin-aims test, the Court concluded that ignoring it would produce substantial variations between state and federal money judgments, the kind of difference that invites forum shopping and inequitable administration of the laws.
Part 2: Who applies it (New York's appellate courts) — runs into federal interests
In New York state court, the Appellate Division does the checking. In federal court, that collides with the Seventh Amendment's Reexamination Clause and with what Byrd v. Blue Ridge called "an essential characteristic" of the federal system: how it divides trial functions between judge and jury.
The accommodation
"In this case, the principal state and federal interests can be accommodated." New York's interest "can be respected, without disrupting the federal system, once it is recognized that the federal district court is capable of performing the checking function, i. e., that court can apply the State's "deviates materially" standard in line with New York case law evolving under CPLR § 5501(c)." Appellate review of that ruling is for abuse of discretion.
The disposition puts this into practice: "Accordingly, we vacate the judgment of the Court of Appeals and instruct that court to remand the case to the District Court so that the trial judge, revisiting his ruling on the new trial motion, may test the jury's verdict against CPLR § 5501(c)'s "deviates materially" standard."
The dissents
| Justice | Position |
|---|---|
| Stevens | Would have affirmed the Second Circuit's judgment. |
| Scalia (joined by Rehnquist, C.J., and Thomas, J.) | Argued the Seventh Amendment bars federal appellate review of a district court's refusal to set aside a jury award as excessive, and that Federal Rule 59 supplies a federal standard for new trials, so New York's standard should not govern. |
Justice Scalia opened with a sharp charge: "Today the Court overrules a longstanding and well-reasoned line of precedent that has for years prohibited federal appellate courts from reviewing refusals by district courts to set aside civil jury awards as contrary to the weight of the evidence." His Rule 59 argument previews the later debate in Shady Grove over when a Federal Rule displaces state law.
Gasperini next to Byrd, Hanna, and Shady Grove
| Case | State rule at issue | Result |
|---|---|---|
| Byrd v. Blue Ridge (1958) | Judge decides a statutory-employer defense | Federal jury decides; the federal judge–jury allocation outweighs the state rule |
| Hanna v. Plumer (1965) | State rule on service of process | Valid Federal Rule controls; otherwise apply Erie's twin aims |
| Gasperini (1996) | Tighter standard for excessive verdicts | State standard applies, but the federal trial judge applies it |
| Shady Grove v. Allstate (2010) | Ban on class actions for statutory penalties | Rule 23 answers the question and governs; Ginsburg's dissent relied on Gasperini |
Byrd presented an either-or choice, in Gasperini's words "trial by judge as in state court, or trial by jury according to the federal practice." Gasperini found a third way, which is what makes it useful. Fourteen years later, Justice Ginsburg's dissent in Shady Grove cited Gasperini for the idea that federal courts should read the Federal Rules "with sensitivity to important state interests," and noted that "Rule 59(a) did not inhibit federal-court accommodation of New York's invigorated test." The majority went the other way, so Gasperini's accommodation approach now works mainly when no Federal Rule squarely answers the question. Our guide to Rule 23 class actions covers the rule at issue in Shady Grove.
How Gasperini shows up on exams
Gasperini is the go-to cite when a fact pattern involves a state rule about damages, remittitur, or new trials in a diversity case. Professors like it because it forces you to separate a state's substantive policy from the procedure the state uses to carry it out.
Two mistakes to avoid: treating the whole state statute as one unit (Gasperini split it), and forgetting the appellate standard (abuse of discretion). If the fact pattern raises who decides a disputed fact rather than how big an award may be, pair Gasperini with the Byrd v. Blue Ridge case brief.
Practice hypo (with a worked answer)
The video
The animation at the top of this page runs about four and a half minutes. It follows the lost slides to the $450,000 verdict, shows the Second Circuit's $100,000 remittitur, and splits § 5501(c) into its two parts on screen before ending with the Gasperini exam playbook. For related reading, see the Asahi Metal v. Superior Court case brief, browse all Law School guides, or review the Civil Procedure cheat sheet.
Frequently asked questions
What did Gasperini v. Center for Humanities hold?
The Supreme Court held 5–4 that New York's CPLR § 5501(c) "deviates materially" standard for excessive jury awards is substantive under Erie and applies in federal diversity cases. To respect the Seventh Amendment, the federal district judge applies the standard on a Rule 59 motion, and the court of appeals reviews that ruling only for abuse of discretion.
What is CPLR 5501(c)?
It is a New York statute, adopted in 1986 as part of a series of tort reform measures, that tells New York's appellate courts to treat a jury award as excessive or inadequate if it "deviates materially from what would be reasonable compensation." It replaced the looser "shock the conscience" test.
Is the deviates materially standard substantive or procedural?
Both parts exist in the statute. The Court treated the standard itself as substantive for Erie purposes, because it limits how much a plaintiff can recover, much like a damages cap. The part assigning review to state appellate courts is procedural and gives way in federal court to the Seventh Amendment and the federal judge–jury structure.
How does Gasperini relate to Byrd v. Blue Ridge?
Gasperini relied on Byrd's description of the judge–jury allocation as an essential characteristic of the federal system. Byrd faced an either-or choice between trial by judge and trial by jury. Gasperini found a middle path: apply the state's substantive standard, but have the federal trial judge apply it.
What did Justice Scalia's dissent argue?
Justice Scalia, joined by Chief Justice Rehnquist and Justice Thomas, argued that the Seventh Amendment bars federal appellate courts from reviewing a district court's refusal to set aside a jury award as excessive, and that Federal Rule 59 supplies a federal standard for new trials that displaces New York's rule.
What happened to the $450,000 verdict?
The Supreme Court vacated the Second Circuit's order, which had required a new trial unless Gasperini accepted $100,000. It sent the case back so the federal district judge could revisit the new-trial motion and test the verdict against New York's "deviates materially" standard.
Related Verbloom guides
Sources
- Gasperini v. Center for Humanities, Inc., 518 U.S. 415 (1996) — all opinions (Justia)
- Byrd v. Blue Ridge Rural Electric Cooperative, Inc., 356 U.S. 525 (1958) (Justia)
- Hanna v. Plumer, 380 U.S. 460 (1965) (Justia)
- Shady Grove Orthopedic Associates v. Allstate, 559 U.S. 393 (2010) — Ginsburg dissent (Cornell LII)
Want 1L doctrine to finally click?
Verbloom breaks down the law school concepts that confuse first-years — like Civil Procedure — into short, plain-English lessons and practice built around how the rules actually work.