518 U.S. 415 (1996)

GASPERINI
v.
CENTER FOR HUMANITIES, INC.

No. 95-719.

United States Supreme Court.

Argued April 16, 1996. Decided June 24, 1996. CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

*417 *417 *418 Ginsburg, J., delivered the opinion of the Court, in which O'Connor, Kennedy, Souter, and Breyer, JJ., joined. Stevens, J., filed a dissenting opinion,post, p. 439. Scalia, J., filed a dissenting opinion, in which Rehnquist, C. J., and Thomas, J., joined, post, p. 448.

Samuel A. Abady argued the cause for petitioner. With him on the briefs were Jonathan S. Abady, Matthew D. Brinckerhoff, and Andrew Dwyer.

Theodore B. Olson argued the cause for respondent. With him on the brief were Theodore J. Boutrous, Jr., Douglas R. Cox, Mark Snyderman, and Francis A. Montbach.^[*]

Justice Ginsburg, delivered the opinion of the Court.

Under the law of New York, 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." N. Y. Civ. Prac. Law and Rules (CPLR) § 5501(c) (McKinney 1995). Under the Seventh Amendment, which governs proceedings in federal court, but not in state court, "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." U. S. Const., Amdt. 7.

*419 The compatibility of these provisions, in an action based on New York law but tried in federal court by reason of the parties' diverse citizenship, is the issue we confront in this case. We hold that New York's law controlling compensation awards for excessiveness or inadequacy can be given effect, without detriment to the Seventh Amendment, if the review standard set out in CPLR § 5501(c) is applied by the federal trial court judge, with appellate control of the trial court's ruling limited to review for "abuse of discretion."

I

Petitioner William Gasperini, a journalist for CBS News and the Christian Science Monitor, began reporting on events in Central America in 1984. He earned his living primarily in radio and print media and only occasionally sold his photographic work. During the course of his seven-year stint in Central America, Gasperini took over 5,000 slide transparencies, depicting active war zones, political leaders, and scenes from daily life. In 1990, Gasperini agreed to supply his original color transparencies to The Center for Humanities, Inc. (Center) for use in an educational videotape, Conflict in Central America. Gasperini selected 300 of his slides for the Center; its videotape included 110 of them. The Center agreed to return the original transparencies, but upon the completion of the project, it could not find them.

Gasperini commenced suit in the United States District Court for the Southern District of New York, invoking the court's diversity jurisdiction pursuant to 28 U. S. C. § 1332.^[1] He alleged several state-law claims for relief, including breach of contract, conversion, and negligence. See App. 5-6. The Center conceded liability for the lost transparencies and the issue of damages was tried before a jury.

*420 At trial, Gasperini's expert witness testified that the "industry standard" within the photographic publishing community valued a lost transparency at $1,500. See id. , at 227. This industry standard, the expert explained, represented the average license fee a commercial photograph could earn over the full course of the photographer's copyright, i. e., in Gasperini's case, his lifetime plus 50 years. See id. , at 228; see also 17 U. S. C. § 302(a). Gasperini estimated that his earnings from photography totaled just over $10,000 for the period from 1984 through 1993. He also testified that he intended to produce a book containing his best photographs from Central America. See App. 175.

After a three-day trial, the jury awarded Gasperini $450,000 in compensatory damages. This sum, the jury foreperson announced, "is [$]1500 each, for 300 slides." Id. , at 313. Moving for a new trial under Federal Rule of Civil Procedure 59, the Center attacked the verdict on various grounds, including excessiveness. Without comment, the District Court denied the motion. See App. to Pet. for Cert. 12a.

The Court of Appeals for the Second Circuit vacated the judgment entered on the jury's verdict. 66 F. 3d 427 (1995). Mindful that New York law governed the controversy, the Court of Appeals endeavored to apply CPLR § 5501(c), which instructs that, when a jury returns an itemized verdict, as the jury did in this case, the New York Appellate Division "shall determine that an award is excessive or inadequate if it deviates materially from what would be reasonable compensation." The Second Circuit's application of § 5501(c) as a check on the size of the jury's verdict followed Circuit precedent elaborated two weeks earlier in Consorti v. Armstrong World Industries, Inc., 64 F. 3d 781, superseded, 72 F. 3d 1003 (1995). Surveying Appellate Division decisions that reviewed damage awards for lost transparencies, the Second Circuit concluded that testimony on industry standard alone was insufficient to justify a verdict; prime among other factors *421 warranting consideration were the uniqueness of the slides' subject matter and the photographer's earning level.^[2]

Guided by Appellate Division rulings, the Second Circuit held that the $450,000 verdict "materially deviates from what is reasonable compensation." 66 F. 3d, at 431. Some of Gasperini's transparencies, the Second Circuit recognized, were unique, notably those capturing combat situations in which Gasperini was the only photographer present. Id. , at 429. But others "depicted either generic scenes or events at which other professional photojournalists were present." Id. , at 431. No more than 50 slides merited a $1,500 award, the court concluded, after "[g]iving Gasperini every benefit of the doubt." Ibid. Absent evidence showing significant earnings from photographic endeavors or concrete plans to publish a book, the court further determined, any damage award above $100 each for the remaining slides would be excessive. Remittiturs "presen[t] difficult problems for appellate courts," the Second Circuit acknowledged, for court of appeals judges review the evidence from "a cold paper record." Ibid. Nevertheless, the Second Circuit set aside the $450,000 verdict and ordered a new trial, unless Gasperini agreed to an award of $100,000.

*422 This case presents an important question regarding the standard a federal court uses to measure the alleged excessiveness of a jury's verdict in an action for damages based on state law. We therefore granted certiorari. 516 U. S. 1086 (1996).

II

Before 1986, state and federal courts in New York generally invoked the same judge-made formulation in responding to excessiveness attacks on jury verdicts: courts would not disturb an award unless the amount was so exorbitant that it "shocked the conscience of the court." See Consorti, 72 F. 3d, at 1012-1013 (collecting cases). As described by the Second Circuit:

"The standard for determining excessiveness and the appropriateness of remittitur in New York is somewhat ambiguous. Prior to 1986, New York law employed the same standard as the federal courts, see Matthews v. CTI Container Transport Int'l Inc., 871 F. 2d 270, 278 (2d Cir. 1989), which authorized remittitur only if the jury's verdict was so excessive that it `shocked the conscience of the court.' " Id. , at 1012.

See also D. Siegel, Practice Commentaries C5501:10, reprinted in 7B McKinney's Consolidated Laws of New York Ann., p. 25 (1995) ("conventional standard for altering the verdict was that its sum was so great or so small that it `shocked the conscience' of the court").

In both state and federal courts, trial judges made the excessiveness assessment in the first instance, and appellate judges ordinarily deferred to the trial court's judgment. See, e. g., McAllister v. Adam Packing Corp., 66 App. Div. 2d 975, 976, 412 N. Y. S. 2d 50, 52 (3d Dept. 1978) ("The trial court's determination as to the adequacy of the jury verdict will only be disturbed by an appellate court where it can be said that the trial court's exercise of discretion was not reasonably grounded."); Martell v. Boardwalk Enterprises, *423 Inc., 748 F. 2d 740, 750 (CA2 1984) ("The trial court's refusal to set aside or reduce a jury award will be overturned only for abuse of discretion.").

In 1986, as part of a series of tort reform measures,^[3] New York codified a standard for judicial review of the size of jury awards. Placed in CPLR § 5501(c), the prescription reads:

"In reviewing a money judgment . . . in which it is contended that the award is excessive or inadequate and that a new trial should have been granted unless a stipulation is entered to a different award, the appellate division shall determine that an award is excessive or inadequate if it deviates materially from what would be reasonable compensation."^[4]

As stated in Legislative Findings and Declarations accompanying New York's adoption of the "deviates materially" formulation, the lawmakers found the "shock the conscience" test an insufficient check on damage awards; the legislature therefore installed a standard "invit[ing] more careful appellate scrutiny." Ch. 266, 1986 N. Y. Laws 470 (McKinney). At the same time, the legislature instructed the Appellate Division, in amended § 5522, to state the reasons for the court's rulings on the size of verdicts, and the factors the *424 court considered in complying with § 5501(c).^[5] In his signing statement, then-Governor Mario Cuomo emphasized that the CPLR amendments were meant to rachet up the review standard: "This will assure greater scrutiny of the amount of verdicts and promote greater stability in the tort system and greater fairness for similarly situated defendants throughout the State." Memorandum on Approving L. 1986, Ch. 682, 1986 N. Y. Laws, at 3184; see also Newman & Ahmuty, Appellate Review of Punitive Damage Awards, in Insurance, Excess, and Reinsurance Coverage Disputes 1990, p. 409 (B. Ostrager & T. Newman eds. 1990) (review standard prescribed in § 5501(c) "was intended to . . . encourage Appellate Division modification of excessive awards").

New York state-court opinions confirm that § 5501(c)'s "deviates materially" standard calls for closer surveillance than "shock the conscience" oversight. See, e. g., O'Connor v. Graziosi, 131 App. Div. 2d 553, 554, 516 N. Y. S. 2d 276, 277 (2d Dept. 1987) ("apparent intent" of 1986 legislation was "to facilitate appellate changes in verdicts"); Harvey v. Mazal American Partners, 79 N. Y. 2d 218, 225, 590 N. E. 2d 224, 228 (1992) (instructing Appellate Division to use, in setting remittitur, only the "deviates materially" standard, and not the "shock the conscience" test); see also Consorti, 72 F. 3d, at 1013 ("Material deviation from reasonableness is less than that deviation required to find an award so excessive as to `shock the conscience.' "); 7 J. Weinstein, H. Korn, & A. Miller, New York Civil Practice ¶ 5501.21, p. 55-64 (1995) ("Under [§ 5501(c)'s] new standard, the reviewing court is given greater power to review the size of a jury award than had heretofore been afforded . . . .").

*425 Although phrased as a direction to New York's intermediate appellate courts, § 5501(c)'s "deviates materially" standard, as construed by New York's courts, instructs state trial judges as well. See, e. g., Inya v. Ide Hyundai, Inc., 209 App. Div. 2d 1015, 619 N. Y. S. 2d 440 (4th Dept. 1994) (error for trial court to apply "shock the conscience" test to motion to set aside damages; proper standard is whether award "materially deviates from what would be reasonable compensation"); Cochetti v. Gralow, 192 App. Div. 2d 974, 975, 597 N. Y. S. 2d 234, 235 (3d Dept. 1993) ("settled law" that trial courts conduct "materially deviates" inquiry); Shurgan v. Tedesco, 179 App. Div. 2d 805, 806, 578 N. Y. S. 2d 658, 659 (2d Dept. 1992) (approving trial court's application of "materially deviates" standard); see also Lightfoot v. Union Carbide Corp., 901 F. Supp. 166, 169 (SDNY 1995) (CPLR 5501(c)'s "materially deviates" standard "is pretty well established as applicable to [state] trial and appellate courts."). Application of § 5501(c) at the trial level is key to this case.

To determine whether an award "deviates materially from what would be reasonable compensation," New York state courts look to awards approved in similar cases. See, e. g., Leon v. J & M Peppe Realty Corp., 190 App. Div. 2d 400, 416, 596 N. Y. S. 2d 380, 389 (1st Dept. 1993) ("These awards. . . are not out of line with recent awards sustained by appellate courts."); Johnston v. Joyce, 192 App. Div. 2d 1124, 1125, 596 N. Y. S. 2d 625, 626 (4th Dept. 1993) (reducing award to maximum amount previously allowed for similar type of harm). Under New York's former "shock the conscience" test, courts also referred to analogous cases. See, e. g., Senko v. Fonda, 53 App. Div. 2d 638, 639, 384 N. Y. S. 2d 849, 851 (2d Dept. 1976). The "deviates materially" standard, however, in design and operation, influences outcomes by tightening the range of tolerable awards. See, e. g., Consorti, 72 F. 3d, at 1013, and n. 10, 1014-1015, and n. 14.

*426 III

In cases like Gasperini's, in which New York law governs the claims for relief, does New York law also supply the test for federal-court review of the size of the verdict? The Center answers yes. The "deviates materially" standard, it argues, is a substantive standard that must be applied by federal appellate courts in diversity cases. The Second Circuit agreed. See 66 F. 3d, at 430; see also Consorti, 72 F. 3d, at 1011 ("[CPLR § 5501(c)] is the substantive rule provided by New York law."). Gasperini, emphasizing that § 5501(c) trains on the New York Appellate Division, characterizes the provision as procedural, an allocation of decision making authority regarding damages, not a hard cap on the amount recoverable. Correctly comprehended, Gasperini urges, § 5501(c)'s direction to the Appellate Division cannot be given effect by federal appellate courts without violating the Seventh Amendment's Reexamination Clause.

As the parties' arguments suggest, CPLR § 5501(c), appraised under Erie R. Co. v. Tompkins, 304 U. S. 64 (1938), and decisions in Erie `s path, is both "substantive" and "procedural": "substantive" in that § 5501(c)'s "deviates materially" standard controls how much a plaintiff can be awarded; "procedural" in that § 5501(c) assigns decision making authority to New York's Appellate Division. Parallel application of § 5501(c) at the federal appellate level would be out of sync with the federal system's division of trial and appellate court functions, an allocation weighted by the Seventh Amendment. The dispositive question, therefore, is whether federal courts can give effect to the substantive thrust of § 5501(c) without untoward alteration of the federal scheme for the trial and decision of civil cases.

A

Federal diversity jurisdiction provides an alternative forum for the adjudication of state-created rights, but it does not carry with it generation of rules of substantive law. As *427 Erie read the Rules of Decision Act:^[6] "Except in matters governed by the Federal Constitution or by Acts of Congress, the law to be applied in any case is the law of the State." 304 U. S., at 78. Under the Erie doctrine, federal courts sitting in diversity apply state substantive law and federal procedural law.

Classification of a law as "substantive" or "procedural" for Erie purposes is sometimes a challenging endeavor.^[7]Guaranty Trust Co. v. York, 326 U. S. 99 (1945), an early interpretation of Erie, propounded an "outcomedetermination" test: "[D]oes it significantly affect the result of a litigation for a federal court to disregard a law of a State that would be controlling in an action upon the same claim by the same parties in a State court?" 326 U. S., at 109. Ordering application of a state statute of limitations to an equity proceeding in federal court, the Court said in Guar- *428 anty Trust: "[W]here a federal court is exercising jurisdiction solely because of the diversity of citizenship of the parties, the outcome of the litigation in the federal court should be substantially the same, so far as legal rules determine the outcome of a litigation, as it would be if tried in a State court." Ibid.; see also Ragan v. Merchants Transfer & Warehouse Co., 337 U. S. 530, 533 (1949) (when local law that creates the cause of action qualifies it, "federal court must follow suit," for "a different measure of the cause of action in one court than in the other [would transgress] the principle of Erie "). A later pathmarking case, qualifying Guaranty Trust, explained that the "outcome-determination" test must not be applied mechanically to sweep in all manner of variations; instead, its application must be guided by "the twin aims of the Erie rule: discouragement of forumshopping and avoidance of inequitable administration of the laws." Hanna v. Plumer, 380 U. S. 460, 468 (1965).

Informed by these decisions, we address the question whether New York's "deviates materially" standard, codified in CPLR § 5501(c), is outcome affective in this sense: Would "application of the [standard] . . . have so important an effect upon the fortunes of one or both of the litigants that failure to [apply] it would [unfairly discriminate against citizens of the forum State, or] be likely to cause a plaintiff to choose the federal court"? Id., at 468, n. 9.^[8]

We start from a point the parties do not debate. Gasperini acknowledges that a statutory cap on damages would supply substantive law for Erie purposes. See Reply Brief for *429 Petitioner 2 ("[T]he state as a matter of its substantive law may, among other things, eliminate the availability of damages for a particular claim entirely, limit the factors a jury may consider in determining damages, or place an absolute cap on the amount of damages available, and such substantive law would be applicable in a federal court sitting in diversity."); see also Tr. of Oral Arg. 4-5, 25; Consorti, 72 F. 3d, at 1011.^[9] Although CPLR § 5501(c) is less readily classified, it was designed to provide an analogous control.

New York's Legislature codified in § 5501(c) a new standard, one that requires closer court review than the commonlaw "shock the conscience" test. See supra, at 422-423. More rigorous comparative evaluations attend application of § 5501(c)'s "deviates materially" standard. See supra, at 423-425. To foster predictability, the legislature required the reviewing court, when overturning a verdict under § 5501(c), to state its reasons, including the factors it considered relevant. See CPLR § 5522(b); supra, at 423-424. We think it a fair conclusion that CPLR § 5501(c) differs from a statutory cap principally "in that the maximum amount recoverable is not set forth by statute, but rather is determined by case law." Brief for City of New York as Amicus Curiae 11. In sum, § 5501(c) contains a procedural instruction, see supra, at 426, but the State's objective is manifestly substantive. Cf. S. A. Healy Co. v. Milwaukee Metropolitan Sewerage Dist., 60 F. 3d 305, 310 (CA7 1995).

It thus appears that if federal courts ignore the change in the New York standard and persist in applying the "shock *430 the conscience" test to damage awards on claims governed by New York law,^[10] "`substantial' variations between state and federal [money judgments]" may be expected. See Hanna, 380 U. S., at 467-468.<sup>[11]</sup> We therefore agree with the Second Circuit that New York's check on excessive damages implicates what we have called Erie `s "twin aims." See supra, at 428.^[12] Just as the Erie principle precludes a federal court from giving a state-created claim "longer life . . . than [the claim] would have had in the state court," Ragan, *431 337 U. S., at 533-534, so Erie precludes a recovery in federal court significantly larger than the recovery that would have been tolerated in state court.

B

CPLR § 5501(c), as earlier noted, see supra, at 425, 426, is phrased as a direction to the New York Appellate Division. Acting essentially as a surrogate for a New York appellate forum, the Court of Appeals reviewed Gasperini's award to determine if it "deviate[d] materially" from damage awards the Appellate Division permitted in similar circumstances. The Court of Appeals performed this task without benefit of an opinion from the District Court, which had denied "without comment" the Center's Rule 59 motion. 66 F. 3d, at 428. Concentrating on the authority § 5501(c) gives to the Appellate Division, Gasperini urges that the provision shifts factfinding responsibility from the jury and the trial judge to the appellate court. Assigning such responsibility to an appellate court, he maintains, is incompatible with the Seventh Amendment's Reexamination Clause, and therefore, Gasperini concludes, § 5501(c) cannot be given effect in federal court. Brief for Petitioner 19-20. Although we reach a different conclusion than Gasperini, we agree that the Second Circuit did not attend to "[a]n essential characteristic of [the federal court] system," Byrd v. Blue Ridge Rural Elec. Cooperative, Inc., 356 U. S. 525, 537 (1958), when it used § 5501(c) as "the standard for [federal] appellate review," Consorti, 72 F. 3d, at 1013; see also 66 F. 3d, at 430.

That "essential characteristic" was described in Byrd, a diversity suit for negligence in which a pivotal issue of fact would have been tried by a judge were the case in state court. The Byrd Court held that, despite the state practice,^[13] the plaintiff was entitled to a jury trial in federal court. *432 In so ruling, the Court said that the Guaranty Trust "outcome-determination" test was an insufficient guide in cases presenting countervailing federal interests. See Byrd, 356 U. S., at 537. The Court described the countervailing federal interests present in Byrd this way:

"The federal system is an independent system for administering justice to litigants who properly invoke its jurisdiction. An essential characteristic of that system is the manner in which, in civil common-law actions, it distributes trial functions between judge and jury and, under the influence—if not the command—of the Seventh Amendment, assigns the decisions of disputed questions of fact to the jury." Ibid. (footnote omitted).

The Seventh Amendment, which governs proceedings in federal court, but not in state court,^[14] bears not only on the allocation of trial functions between judge and jury, the issue in Byrd; it also controls the allocation of authority to review verdicts, the issue of concern here. The Amendment reads:

"In Suits at common law, where the value in controversy shall exceed twenty dollars, 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." U. S. Const., Amdt. 7.

Byrd involved the first Clause of the Amendment, the "trial by jury" Clause. This case involves the second, the "re-examination" Clause. In keeping with the historic understanding,^[15]*433 the Reexamination Clause does not inhibit the authority of trial judges to grant new trials "for any of the reasons for which new trials have heretofore been granted in actions at law in the courts of the United States." Fed. Rule Civ. Proc. 59(a). That authority is large. See 6A Moore's Federal Practice ¶ 59.05[2], pp. 59-44 to 59-46 (2d ed. 1996) ("The power of the English common law trial courts to grant a new trial for a variety of reasons with a view to the attainment of justice was well established prior to the establishment of our Government."); see also Aetna Casualty & Surety Co. v. Yeatts, 122 F. 2d 350, 353 (CA4 1941) ("The exercise of [the trial court's power to set aside the jury's verdict and grant a new trial] is not in derogation of the right of trial by jury but is one of the historic safeguards of that right."); Blunt v. Little, 3 F. Cas. 760, 761-762 (No. 1,578) (CC Mass. 1822) (Story, J.) ("[I]f it should clearly appear that the jury have committed a gross error, or have acted from improper motives, or have given damages excessive in relation to the person or the injury, it is as much the duty of the court to interfere, to prevent the wrong, as in any other case."). "The trial judge in the federal system," we have reaffirmed, "has . . . discretion to grant a new trial if the verdict appears to [the judge] to be against the weight of the evidence." Byrd, 356 U. S., at 540. This discretion includes overturning verdicts for excessiveness and ordering a new trial without qualification, or conditioned on the verdict winner's refusal to agree to a reduction (remittitur). See Dimick v. Schiedt, 293 U. S. 474, 486-487 (1935) (recognizing that remittitur withstands Seventh Amendment attack, but rejecting additur as unconstitutional).^[16]

*434 In contrast, appellate review of a federal trial court's denial of a motion to set aside a jury's verdict as excessive is a relatively late, and less secure, development. Such review was once deemed inconsonant with the Seventh Amendment's Reexamination Clause. See, e. g., Lincoln v. Power, 151 U. S. 436, 437-438 (1894); Williamson v. Osenton, 220 F. 653, 655 (CA4 1915); see also 6A Moore's Federal Practice ¶ 59.08[6], at 59-167 (collecting cases). We subsequently recognized that, even in cases in which the Erie doctrine was not in play—cases arising wholly under federal law— the question was not settled; we twice granted certiorari to decide the unsettled issue, but ultimately resolved the cases on other grounds. See Grunenthal v. Long Island R. Co., 393 U. S. 156, 158 (1968); Neese v. Southern R. Co. , 350 U. S. 77 (1955).^[17]

Before today, we have not "expressly [held] that the Seventh Amendment allows appellate review of a district court's denial of a motion to set aside an award as excessive." Browning-Ferris Industries of Vt., Inc. v. Kelco Disposal, Inc., 492 U. S. 257, 279, n. 25 (1989). But in successive reminders that the question was worthy of this Court's attention, we noted, without disapproval, that courts of appeals engage in review of district court excessiveness determinations, *435 applying "abuse of discretion" as their standard. See Grunenthal, 393 U. S., at 159. We noted the Circuit decisions in point, id. , at 157, n. 3, and, in Browning-Ferris, we again referred to appellate court abuse-of-discretion review:

"[T]he role of the district court is to determine whether the jury's verdict is within the confines set by state law, and to determine, by reference to federal standards developed under Rule 59, whether a new trial or remittitur should be ordered. The court of appeals should then review the district court's determination under an abuse-of-discretion standard." 492 U. S., at 279.^[18]

As the Second Circuit explained, appellate review for abuse of discretion is reconcilable with the Seventh Amendment as a control necessary and proper to the fair administration of justice: "We must give the benefit of every doubt to the judgment of the trial judge; but surely there must be an upper limit, and whether that has been surpassed is not a question of fact with respect to which reasonable men may differ, but a question of law." Dagnello v. Long Island R. Co., 289 F. 2d 797, 806 (CA2 1961) (quoted in Grunenthal, 393 U. S., at 159). All other Circuits agree. See, e. g., Holmes v. Elgin, Joliet & Eastern R. Co., 18 F. 3d 1393, 1396 (CA7 1994); 11 C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure § 2820, p. 209 (2d ed. 1995) ("[E]very circuit has said that there are circumstances in which it can reverse the denial of a new trial if the size of the verdict seems to be too far out of line."); 6A Moore's Federal Practice *436 ¶ 59.08[6], at 59-177 to 59-185 (same).^[19] We now approve this line of decisions, and thus make explicit what Justice Stewart thought implicit in our Grunenthal disposition: "[N]othing in the Seventh Amendment . . . precludes appellate review of the trial judge's denial of a motion to set aside [a jury verdict] as excessive." 393 U. S., at 164 (Stewart, J., dissenting) (internal quotation marks and footnote omitted).^[20]

C

In Byrd, the Court faced a one-or-the-other choice: trial by judge as in state court, or trial by jury according to the federal practice.^[21] In the case before us, a choice of that *437 order is not required, for the principal state and federal interests can be accommodated. The Second Circuit correctly recognized that when New York substantive law governs a claim for relief, New York law and decisions guide the allowable damages. See 66 F. 3d, at 430; see also Consorti, 72 F. 3d, at 1011. But that court did not take into account the characteristic of the federal court system that caused us to reaffirm: "The proper role of the trial and appellate courts in the federal system in reviewing the size of jury verdicts is . . . a matter of federal law." Donovan v. Penn Shipping Co., 429 U. S. 648, 649 (1977) (per curiam); see also Browning-Ferris, 492 U. S., at 279 ("[T]he role of the district court is to determine whether the jury's verdict is within the confines set by state law . . . . The court of appeals should then review the district court's determination under an abuse-of-discretion standard.").

New York's dominant 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).^[22] We recall, in this regard, that the *438 "deviates materially" standard serves as the guide to be applied in trial as well as appellate courts in New York. See supra, at 425.

Within the federal system, practical reasons combine with Seventh Amendment constraints to lodge in the district court, not the court of appeals, primary responsibility for application of § 5501(c)'s "deviates materially" check. Trial judges have the "unique opportunity to consider the evidence in the living courtroom context," Taylor v. Washington Terminal Co., 409 F. 2d 145, 148 (CADC 1969), while appellate judges see only the "cold paper record," 66 F. 3d, at 431.

District court applications of the "deviates materially" standard would be subject to appellate review under the standard the Circuits now employ when inadequacy or excessiveness is asserted on appeal: abuse of discretion. See 11 Wright & Miller, Federal Practice and Procedure § 2820, at 212-214, and n. 24 (collecting cases); see 6A Moore's Federal Practice ¶ 59.08[6], at 59-177 to 59-185 (same). In light of Erie `s doctrine, the federal appeals court must be guided by the damage-control standard state law supplies,^[23] but as the Second Circuit itself has said: "If we reverse, it must be because of an abuse of discretion. . . . The very nature of the problem counsels restraint. . . . We must give the benefit of *439 every doubt to the judgment of the trial judge." Dagnello, 289 F. 2d, at 806.

IV

It does not appear that the District Court checked the jury's verdict against the relevant New York decisions demanding more than "industry standard" testimony to support an award of the size the jury returned in this case. As the Court of Appeals recognized, see 66 F. 3d, at 429, the uniqueness of the photographs and the plaintiff's earnings as photographer—past and reasonably projected—are factors relevant to appraisal of the award. See, e. g., Blackman v. Michael Friedman Publishing Group, Inc., 201 App. Div. 2d 328, 607 N. Y. S. 2d 43, 44 (1st Dept. 1994); Nierenberg v. Wursteria, Inc., 189 App. Div. 2d 571, 571-572, 592 N. Y. S. 2d 27, 27-28 (1st Dept. 1993). 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.

It is so ordered.

Justice Stevens, dissenting.

While I agree with most of the reasoning in the Court's opinion, I disagree with its disposition of the case. I would affirm the judgment of the Court of Appeals. I would also reject the suggestion that the Seventh Amendment limits the power of a federal appellate court sitting in diversity to decide whether a jury's award of damages exceeds a limit established by state law.

I

The Court correctly explains why the 1986 enactment of § 5501(c) of the N. Y. Civ. Prac. 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 *440 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 422— 425. Instead, New York courts have held that all jury awards, not only those reviewed