Challenging federal appellate review of damage awards: lawyers should cite the forgotten second clause of the Seventh Amendment.

Today most federal appellate courts take for granted their authority to review "excessive" damage awards under a weight-of-the-evidence standard. Even if a trial court denies a new trial motion under Federal Rule of Civil Procedure 59, most appellate judges believe they have the power to review the denial and grant a new trial - although most would also accord great deference to the trial court's resolution of the matter.

The power of federal appellate courts to review these decisions has not always been so casually accepted. In fact, only in the last 40 years has the judiciary come to wield this power.

Throughout most of our history, it was conventional wisdom that a federal appellate court could not review a district court's refusal to set aside as excessive the damages awarded by a jury. The reasons for this, which are complex, stem from appellate procedural idiosyncrasies and differing views of the jury's proper role under the Seventh Amendment.

Many former limits on federal appellate authority, like those that derived from now-changed judicial procedures and practice, no longer exist. However, one independent limit - the Seventh Amendment - surely still applies today. Whether it permits federal appellate courts to review denials of motions that raise excessiveness objections is an open question.

Many old Supreme Court decisions interpreted the amendment as an independent bar to review of the size of a jury's award. This interpretation retains its vitality today. Three times in this century, the Court has pointedly declined to authorize this form of appellate review under the Seventh Amendment.(1)

Accordingly, plaintiffs'' lawyers should begin to challenge the power of federal appellate courts to review district court decisions declining to set aside damages as excessive. At first, appellate judges may be reluctant to embrace plaintiffs' arguments, but reactions should change once lawyers point out that the Supreme Court has never approved this form of appellate review.

At the end of this article, we suggest model language to include in briefs to educate appellate judges on the issue and to prepare a record for possible Supreme Court review.

History

The Reexamination Clause of the Seventh Amendment provides that "no fact tried by jury, shall be otherwise reexamined in any Court of the United States, than according to the rules of the common law." More than a century and a half ago, justice Joseph Story wrote that this part of the amendment is not only a "substantial and independent clause," it is "more important" than the clause that precedes it, which guarantees the right to jury trial.(2)

The reexamination clause is a prohibition on "the direct impairment of the right of trial by jury through judicial reexamination of factfindings of a jury other than as permitted in 1791." Thus, the Supreme Court originally held that federal courts did not have the power to grant judgment as a matter of law to the losing party after a jury's verdict.(3) Not until attorneys started to reserve the right to move for a directed verdict before they submitted the case to the jury did the Court hold that post-trial grant of judgment as a matter of law could be constitutional under the Seventh Amendment.(4)

In fact, between 1879 and 1933, the Supreme Court expressly held in no fewer than 11 cases that it lacked the authority to consider objections to the size of a jury verdict that a district court had already rejected.(5) For example, in the 1887 case of Metropolitan Railroad v. Moore, the Court explained that, although some state appellate courts could overturn a verdict as excessive, "[s]uch a practice in the appellate courts of the United States is perhaps forbidden by the Seventh Amendment. . . ."(6) In the last of these cases, Fairmount Glass Works v. Cub Fork Coal Co., the Court explained,

The rule that this Court will not review the action of a federal trial court in ... denying a motion for a new trial for error of fact ... has been frequently applied where the ground of the motion was that the damages awarded by the jury were excessive or were inadequate. The rule precludes likewise a review of such action by a circuit court of appeals. . . . Sometimes the rule has been rested on . . . the Seventh Amendment. . . .(7)

The reason for the somewhat tentative tone of these decisions is that other procedural barriers also precluded appellate review of excessiveness issues. For example, the Judiciary Act of 1789 gave federal circuit courts the authority to review the final decisions of the district courts in civil cases only on writ of error.

As is commonly understood, this procedural device was concerned only with errors of law apparent on the face of the record.(8) The sufficiency of the evidence presented at trial was not open to review on writ of error.(9) Appellate courts also often denied review on the ground that the decision to grant or refuse a motion for a new trial was a matter wholly within the discretion of the trial courts.

There also were practical problems. In 1830, the Court held in Parsons v. Bedford that it was not error for a trial court to refuse to direct that the testimony at a trial be transcribed.(10) The Court assumed that because appellate courts were without power to examine the sufficiency of the evidence, they would not need transcripts. Without one, appellate review of factual questions is difficult if not impossible.

Seventh Amendment Argument

Although the Supreme Court has never squarely held that the Seventh Amendment precludes appellate review of a district court's denial of a new trial motion that raises an excessiveness claim, the contours of the argument are clear. Under the Reexamination Clause, "when a trial by jury has been had in an action at law . . . the facts there tried and decided cannot be reexamined in any court of the United States, otherwise than according to the rules of the common law of England. . . "(11)

We must therefore analyze the common law modes of review. New trials were highly disfavored at common law. In fact, initially, English courts had no power at all to grant new trials for perceived excessive damages.

In Beardmore v. Carrington, decided in 1764, the court of common pleas explained that "it is clear that the practice of granting new trials is modern, and that Courts anciently never exercised this power. . . . [T]here is not one case to be found in the Year-Books where ever the Court abridged the damages after a principal verdict. . . ."(12)

The English courts were somewhat more willing to grant new trials outside the damages context - for example, when the question involved issues of liability. But even there, the practice was that a new trial would not be granted where there was evidence supporting both sides of the case.(13)

Eventually, a procedure emerged by which a new trial could be granted, but it was extremely strict. A new trial could be granted only if the judge who had heard the case believed that the verdict was against the evidence. In ordinary cases, an itinerant trial judge would travel to the county where the jurors resided in order to conduct the trial. After trial, the record was sent to Westminster, where judgment was pronounced. A new trial could be granted only where the "[trial] judge certified in writing that the verdict was against the evidence" and succeeded in persuading at least one of his two colleagues on a three-judge panel at Westminster to join him in ordering this.(14)

There was simply no appellate review of excessiveness issues in cases where the trial judge refused to grant a new trial. As justice Story commented,

The only modes known to the common law to reexamine such facts, [found by the jury] are the granting of a new trial by the court where the issue was tried, or to which the record was properly returnable; or the award of a [new trial], by an appellate court, for some error of law which intervened in the proceedings.(15)

For that reason, the Seventh Amendment must be viewed as "a prohibition to the courts of the United States to reexamine any facts tried by a jury in any other manner."(16)

The amendment "requires that questions of fact m common law actions shall be settled by a jury, and that the court shall not assume directly or indirectly to take from the jury or to itself such prerogative."(17) To permit federal appellate courts to order new trials based on their own views of whether damage awards are against the weight of the evidence would allow reexamination of facts found by a jury in a way that was previously unknown at common law.

Modern-Day Practice

Because appellate review of excessiveness challenges is relatively common today, many would assume that it must be constitutional. As Justice Anthony Kennedy has commented in another context, however, "it has never been the rule that federal courts . . . acquire power by adverse possession."(18)

Moreover, the modern-day development of the practice of appellate review of these decisions does not lend support to its legitimacy. Before 1950, the prevailing view was that appellate courts lacked the authority to grant new trials on grounds of excessiveness.(19) Judge Learned Hand was only one of many appellate judges who assumed that he did not possess this power.(20)

With the abolition of the writ of error and the disappearance of the other procedural barriers that made appellate review of factual issues impracticable, the issue was brought into focus. The Ninth Circuit Court of Appeals, and then the Fourth Circuit, asserted the authority to grant a new trial or a remittitur on excessiveness grounds.(21) In 1950, in Affolder v. New York, Chicago & St. Louis Railroad, the Supreme Court commented, "We agree with the Court of Appeals that the amount of damages awarded by the District Court's judgment is not monstrous in the circumstances of this case" - even though the defendant had not claimed the damages awarded were excessive.(22) Since then, the courts of appeals have, one by one, interpreted Affolder as implicitly authorizing appellate review of the size of jury verdicts.

This expansion of appellate power was not without criticism.(23) For example, no less an authority than then-Judge Harry Blackmun expressed strong constitutional reservations about the authority of appellate courts to review the denial of new trial motions raising excessiveness objections.(24)

The chief rationale for giving the courts of appeals the power to review these challenges is that a district court's affirmance of an excessive damages award is a kind of "legal error" - like the erroneous admission of evidence or a faulty jury instruction - for which appellate courts had always been empowered (even at common law) to grant a new trial.

But the analogy is flawed. There is a world of difference between a legally incorrect input that taints a jury's verdict and an output that is "tainted" only by a federal court's after-the-fact assessment that the verdict is against the weight of the evidence. Indeed, the same reasoning that purports to justify appellate review for excessiveness can rationalize any reexamination of a jury's factfinding - leading to complete evisceration of the Seventh Amendment's second clause.

The thin reed on which appellate review of excessiveness challenges rests is apparent from the fact that since Affolder the Supreme Court has repeatedly refused to endorse the practice. In 1955, the Court granted certiorari in Neese v. Southern Railway(25) to review a Fourth Circuit decision directing a new trial on the ground that the damages were excessive.

But the Supreme Court did not rule on the constitutional authority for the appellate court's action. Instead, it held merely that the trial judge's decision sustaining the jury verdict had sufficient "support in the record."(26)

More than 10 years later, in Grunenthal v. Long Island Rail Road,(27) the Court granted certiorari to review the question "[w]hether a Court of Appeals may constitutionally review the exercise of discretion by a District Judge in refusing to set aside a verdict for excessiveness."(28) Once again, however, the Court did not reach the constitutional question. Instead, it merely held that the trial court had not erred in sustaining the original jury verdict.(29)

Six years ago, in Browning-Ferris Industries v. Kelco Disposal, Inc., the Supreme Court pointedly observed that

[w]e have never held expressly that the Seventh Amendment allows appellate review of a district court's denial of a motion to set aside an award as excessive. Although we granted certiorari in two cases in order to consider the issue, in both instances we found it unnecessary to reach the question when we decided the case.(30)

The Supreme Court does not idly place such language in its decisions, and the deliberate insertion of such an important caveat must be taken as significant, especially when the Court noted later in its opinion that "federal courts operate under the strictures of the Seventh Amendment. As a result, we are reluctant to stray too far from traditional common law standards, or to take steps which ultimately might interfere with the proper role of the jury."(31)

Some will point out that the Court recently held in Honda Motor Co. v. Oberg(32) that due process requires some form of judicial review to ensure that punitive damage awards are not arbitrary and irrational. But this is far from the weight-of-the-evidence review ordinarily undertaken in federal court.

More important, because it is dear that there is no constitutional right to federal appellate review,(33) the implication of Oberg (which arose in state court, where the Seventh Amendment does not apply) is merely that there must be district court review of punitive awards, not that there must be appellate review of the trial court's refusal to set aside the award.

Persuasive Language

Plaintiffs who have successfully defended against new trial motions at the district court level might consider responding to defendants' excessiveness arguments by including something like the following as a footnote in their appellate briefs:

Although this Court is apparently bound by circuit precedent to the contrary, plaintiff wishes to preserve the argument that the Seventh Amendment precludes appellate review of the denial of a new trial motion asserting excessiveness of a jury's verdict. The Supreme Court has pointedly refused to approve the practice, see Browning-Ferris Industries v. Kelco Disposal, Inc., 492 U.S. 257, 279 n.25 (1989), and in fact held in 11 cases decided between 1879 and 1933 that such appellate review is unavailable. See Fairmount Glass Works v. Cub Fork Coal Co., 287 U.S. 474, 481-82 & n.3 (1933) (citing cases).

Only plaintiffs who raise the question on appeal by including language like this in their briefs will be able to seek certiorari on the issue. Moreover, properly preserving the point on appeal will ensure that a plaintiff can claim the benefit of any favorable Supreme Court ruling on the issue that is handed down after a negative court of appeals decision but before the 90-day period for filing certiorari has run.

Very little will be lost by including this language, and a great deal may be gained.

Notes

(1) Browning-Ferris Indus. v. Kelco Disposal, Inc., 492 U.S. 257, 279 n.25 (1989); Grunenthal v. Long Island Rail Road, 393 U.S. 156 (1968); Neese v. Southern Ry., 350 U.S. 77 (1955). (2) Parsons v. Bedford, 28 U.S. (3 Pet.) 433, 447 (1830). (3) Slocum v. New York Life Ins. Co., 228 U.S. 364 (1913). (4) Baltimore & Carolina Line, Inc. v. Redman, 295 U.S. 654, 657 (1935). (5) See, e.g., Texas & Pac. Ry. v. Hill, 237 U.S. 208, 215 (1915); Southern Ry.-Carolina Div. v. Bennett, 233 U.S. 80, 87 (1914); Phoenix Ry. v. Landis, 231 U.S. 578, 587 (1913); Herencia v. Guzman, 219 U.S. 44, 45 (1910); City of Lincoln v. Power, 151 U.S. 436, 437-38 (1894); New York, Lake Erie & W. R.R. v. Winter, 143 U.S. 60, 75 (1892); Wilson v. Everett, 139 U.S. 616, 621 (1891); Arkansas Valley Land & Cattle Co. v. Mann, 130 U.S. 69, 75 (1889); Railroad Co. v. Fraloff, 100 U.S. 24, 31 (1879). (6) 121 U.S. 558, 573 (1887). (7) 287 U.S. 474, 481-82 (1933). (8) E.g., Edson R. Sunderland, The Problem of Appellate Review, 5 TEX. L. REV. 126, 142 (1927). (9) Miles v. United States, 103 U.S. 304, 313 (1880). (10) 28 U.S. (3 Pet.) 433, 449. (11) Capital Traction Co. v. Hof, 174 U.S. 1, 13 (1899). (12) 95 Eng. Rep. 790, 792 (C.P. 1764). (13) See Hanckey v. Trotman, 96 Eng. Rep. 1, 1-2 (K.B. 1746); Anon., 95 Eng. Rep. (K.B. 1743); Ashley v. Ashley, 93 Eng. Rep. 1088 (K.B. 1740); Smith v. Huggins, 93 Eng. Rep. 1089 (K.B. 1740); Barker v. Dixie, 95 Eng. Rep. 180, 180-81 (K.B. 1735-36). (14) See John Marshall Mitnick, From Neighbor-Witness to Judge of Proofs: The Transformation of the English Civil Juror, 32 AM. J. LEGAL HIST. 201, 212-15 (1988). (15) Parsons, 28 U.S. (3 Pet.) 433, 447-48 (emphasis added). (16) Id. (17) Walker v. New Mexico & So. Pac. R.R., 165 U.S. 593, 596 (1897). (18) Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 839 (Kennedy, J., dissenting), reh'g denied, 492 U.S. 932 (1989). (19) See 11 CHARLES, ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE [sections] 2820 (1973). 20) Miller v. Maryland Casualty Co., 40 F.2d 463, 465 (2d Cir. 1930). (21) Virginian Ry. v. Armentrout, 166 F.2d 400 (4th Cir. 1948); Cobb v. Lepisto, 6 F.2d 128 (9th Cir. 1925). (22) 339 U.S. 96, 101 (1950). (23) See generally Eric Schnapper, Judges Against Juries - Appellate Review of Federal Civil Jury Verdicts, 1989 WIS. L. REV. 237, 243-45. (24) Solomon Dehydrating Co. v. Guyton, 294 F.2d 439, 446-48 & n.3 (8th Cir.), cert. denied, 368 U.S. 929 (1961). (25) 350 U.S. 77 (1955). (26) Id. (27) 393 U.S. 156 (1968). (28) Petition for a Writ of Certiorari at 2, Grunenthal, 393 U.S. 156. (29) 393 U.S. 156, 160-62. (30) 492 U.S. 257, 279 n.25 (1989). (31) Id. at 280 n.26. (32) 114 S. Ct. 2331 (1994). (33) E.g., Abney v. United States, 431 U.S. 651, 656 (1977).