Mayer v. Gary Partners and Co., Ltd.

• Decision Date: 13 July 1994
• Docket Number: K-M,No. 93-3636,93-3636
• Citation: 29 F.3d 330
• Parties: Jennie A. MAYER, Plaintiff-Appellee, v. GARY PARTNERS AND COMPANY, LIMITED, andart Corporation, Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 330

29 F.3d 330

Jennie A. MAYER, Plaintiff-Appellee, v. GARY PARTNERS AND COMPANY, LIMITED, and K-Mart Corporation,

Defendants-Appellants.

No. 93-3636.

United States Court of Appeals,

Seventh Circuit.

Argued April 6, 1994.

Decided July 13, 1994.

Gus J. Galanos, Merrillville, IN, Barry D. Sherman, Joseph P. Allegretti (argued), Sherman & Allegretti, Hammond, IN, for plaintiff-appellee.

Michael D. Sears (argued), Singleton, Crist, Patterson, Austgen & Lyman, Munster, IN, for defendants-appellants.

Before COFFEY, EASTERBROOK, and MANION, Circuit Judges.

EASTERBROOK, Circuit Judge.

Jennie Mayer parked her car in the lot at the Miller Mall in Lake County, Indiana, and bought some articles at K-Mart, one of the mall's seven stores. Returning to the car, Mayer was the victim of a purse snatching, during which the three thieves hit her on the head. She fell to the ground and suffered a fractured pelvis and other injuries. A jury in this diversity suit ordered K-Mart and Gary Partners, the owners of the mall, to pay Mayer $260,000 on the theory that they negligently omitted precautions that would have protected their customers from crime.

Defendants contend that the evidence does not support the verdict, that the damages are excessive, and that errors in the jury instructions are not harmless. Although state law supplies the substantive rules that govern, Erie R.R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), each question has a procedural dimension. Who decides whether the evidence is sufficient, the damages excessive, or the errors harmless? A judge, obviously, but under what standards? Once the judge decides, what is the standard of appellate review? We know from Donovan v. Penn Shipping Co., 429 U.S. 648, 649, 97 S.Ct. 835, 836, 51 L.Ed.2d 112 (1977), that because the seventh amendment and federal rules make the roles of judge and jury a subject of federal law, "[t]he proper role of the trial and appellate courts in the federal system in reviewing the size of jury verdicts [also] is ... a matter of federal law." Accord, Browning-Ferris Industries v. Kelco Disposal, Inc., 492 U.S. 257, 276-80, 109 S.Ct. 2909, 2920-22, 106 L.Ed.2d 219 (1989). Similarly, we know from cases such as Patel v. Gayes, 984 F.2d 214 (7th Cir.1993); Simmons, Inc. v. Pinkerton's, Inc., 762 F.2d 591, 595 (7th Cir.1985); and Platis v. Stockwell, 630 F.2d 1202, 1206 (7th Cir.1980), that federal law supplies the method of proposing, arguing about, objecting to, and evaluating the probable effect of errors in, jury instructions.

Yet cases in this circuit routinely announce that state law supplies the standard of appellate review of the sufficiency of the evidence if there has been a jury trial. E.g., Dolder v. Martinton, 998 F.2d 499, 501 (7th Cir.1993); Amplicon Leasing v. Coachmen Industries, Inc., 910 F.2d 468, 470 (7th Cir.1990). At the same time, federal law provides the standard of appellate review if there has been a bench trial. Anderson v. Bessemer City, 470 U.S. 564, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985); Fed.R.Civ.P. 52(a). Thirty years ago we were confident that federal law governed both questions. Gudgel v. Southern Shippers, Inc., 387 F.2d 723, 725 (7th Cir.1967); Reitan v. Travelers Indemnity Co., 267 F.2d 66, 69 (7th Cir.1959). Opinions that call for the application of state law do not cite the earlier cases specifying a federal standard--and neither set of cases gives reasons. Eleven years ago we noted the contradiction, see Abernathy v. Superior Hardwoods, Inc., 704 F.2d 963, 970-71 (7th Cir.1983), but left matters as we found them. Recently a rumble of discontent with this state of affairs has been heard in our opinions. E.g., Jean v. Dugan, 20 F.3d 255, 263 (7th Cir.1994); Sokol Crystal Products, Inc. v. DSC Communications Corp., 15 F.3d 1427, 1431-32 (7th Cir.1994). The time has come, we believe, to put the matter to rest. Sometimes it is said that a particular state's law is the same as federal law, so that the choice is irrelevant. But Indiana's standard, whether the evidence "points unerringly" to one conclusion, see Huff v. Travelers' Indemnity Co., 266 Ind. 414, 363 N.E.2d 985, 990 (1977), may differ subtly from the federal reasonable-person standard that we discuss below. Ours is a close case, one in which the choice of standard potentially matters, and we therefore want to be sure to get the standard right.

Erie holds that under the Rules of Decision Act, 28 U.S.C. Sec. 1652, state law (including common law) governs the conduct of cases under the diversity jurisdiction unless federal law speaks to the question. The "unless" clause permits the federal forum to apply rules of procedure found in federal statutes (and, equivalently, rules promulgated under the Rules Enabling Act, 28 U.S.C. Secs. 2071-77), even though these procedures may affect the outcome. See Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988); Burlington Northern R.R. v. Woods, 480 U.S. 1, 107 S.Ct. 967, 94 L.Ed.2d 1 (1987); Walker v. Armco Steel Corp., 446 U.S. 740, 100 S.Ct. 1978, 64 L.Ed.2d 659 (1980); Hanna v. Plumer, 380 U.S. 460, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965); cf. Barron v. Ford Motor Co., 965 F.2d 195 (7th Cir.1992) (distinguishing between substance and procedure under the Federal Rules of Evidence). The burden of persuasion is tied to the definition of the right, so state law determines whether the plaintiff must prove the case by a preponderance, by clear and convincing evidence, or by some other standard. Stoner v. New York Life Insurance Co., 311 U.S. 464, 61 S.Ct. 336, 85 L.Ed. 284 (1940); see also American Dredging Co. v. Miller, --- U.S. ----, ---- - ----, 114 S.Ct. 981, 988-89, 127 L.Ed.2d 285 (1994). But who decides an issue is a procedural question. Byrd v. Blue Ridge Rural Electric Cooperative, Inc., 356 U.S. 525, 78 S.Ct. 893, 2 L.Ed.2d 953 (1958). Whether the trier of fact is a jury, a judge, or a magistrate judge (one presided in this case by consent under 28 U.S.C. Sec. 636(c)), is a subject for the forum's own law.

In some states juries are entitled to decide all questions of fact and law, yet this does not compel a federal court to disregard provisions for summary judgment (Fed.R.Civ.P. 56) and verdict as a matter of law (Fed.R.Civ.P. 50), sending every case to a jury. Herron v. Southern Pacific Co., 283 U.S. 91, 51 S.Ct. 383, 75 L.Ed. 857 (1931). Similarly, although some states curtail judges' review of juries' awards of damages, see Honda Motor Co. v. Oberg, --- U.S. ----, 114 S.Ct. 2331, 129 L.Ed.2d ---- (1994), in federal court judges assess the reasonableness of awards. Donovan; Browning-Ferris. The states are not bound by the seventh amendment and therefore may dispense with civil juries altogether; a federal court in the same state would remain obliged to submit cases to juries whenever courts sitting at common law in 1791 would have done so. Sometimes, however, the federal government is stingier with jury trials than are states: a suit against the United States under the Federal Tort Claims Act uses state substantive law, but there will be no jury, even though state courts would use juries to resolve similar disputes. Thus there are bound to be differences between state and federal practice: some states permit juries to resolve questions that are settled by judges in federal court, some states commit to judges questions that the seventh amendment sends to juries in federal litigation, and under the FTCA judges will decide questions under state law that states would allow juries to decide. Federal juries are drawn from wider districts than are state juries, panels serve longer, jurors are compensated differently, and the procedure for voir dire and challenges differs from that used in state courts. These many distinctions, which must on occasion affect the outcome of litigation, imply that each system of courts should be thoroughgoing in using its own rules to determine which questions go to juries and which to judges--and what is the proper relation between trial and appellate judges. Absorbing bits and pieces of some other procedural system cannot eliminate effects on the outcome, but it can cause confusion and uncertainty in a federal system with more than 50 distinct jurisdictions. A court has a hard enough time keeping track of one set of procedural rules.

From beginning to end, diversity litigation is conducted under federal rules of procedure. The filing and content of the complaint, motions for judgment on the pleadings, the introduction of evidence, these and other elements of federal practice suffuse the proceedings. Federal rules dominate even when the subject is evaluation of the sufficiency of the evidence.

. Summary judgment is granted in diversity cases when the non-moving party lacks enough evidence to sustain a jury verdict according to the federal standard: whether reasonable minds could deem the evidence adequate under the governing substantive rule. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-51, 106 S.Ct. 2505, 2510-11, 91 L.Ed.2d 202 (1986). See also Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); McEwen v. Delta Air Lines, Inc., 919 F.2d 58, 60 (7th Cir.1990) ("Erie does not require a federal court to employ the state's rules on the allocation of issues between judge and jury.... Federal courts may grant summary judgment under Rule 56 on concluding that no reasonable jury could return a verdict for the party opposing the motion, even if the state would require the judge to submit an identical case to the jury.").

. When federal judges act as triers of fact in diversity cases, all questions concerning the standard of appellate review are governed by federal law. This means principally the "clearly erroneous" standard specified by Fed.R.Civ.P. 52(a), but it includes related questions as well. See Steven Alan Childress, Judicial Review and Diversity Jurisdiction: Solving an...