11. Which motion should the farmer file to challenge the damages award?

The jurisdiction of federal courts is concurrent with state courts. This means that a particular controversy that is litigable in federal court may also be brought in state court. Where jurisdiction is concurrent, the plaintiff makes the initial decision whether to use state or federal court by filing his case. The defendant may then choose to remove or remain under the state court's jurisdiction.

When determining whether to do an Erie analysis, the threshold question is whether there is a controlling Federal Rule of Civil Procedure (FRCP) or federal statute. If any federal law controls (is «on point»), there is no Erie problem. However, in the absence of a controlling federal statute or Rule, the question becomes whether the issue at hand is substantive or procedural.

In the Erie decision, the U.S. Supreme Court held that a federal court sitting in diversity must apply state substantive law of the state in which it sits on all substantive issues in a case. This includes the state's conflict of law rules. For all procedural issues, a federal court sitting in diversity must apply federal procedural rules (the FRCP).

A motion for a new trial may be filed based on numerous grounds, including that the verdict is either excessive or inadequate. If a federal judge believes the jury's damages award is too high (excessive) such that it «shocks the conscience,» or, in a diversity case, if the award meets the applicable state standard for excessiveness, the judge may order a new trial or offer the alternative of a reduction in damages («remittitur»). See Gasperini v. Center, 518 U.S. 415 (1996) (requiring federal trial courts to apply a state standard when considering a motion for a new trial based on excessiveness of the verdict). When a plaintiff is offered remittitur, he may choose between accepting an award less than given by the jury or submitting to a new trial.

Even a federal court sitting in diversity, and therefore applying state substantive law, may not simply lower the award given by the jury. The court must offer the plaintiff the option between receiving a lower award or a new trial. Hetzel v. Prince Williams County, 523 U.S. 208 (1998).

If the trial judge believes that the jury's compensatory damages are too low (inadequate), he may NOT offer the defendant the choice of accepting a higher award («additur») or submitting to a new trial. «Additur» is not allowed in federal cases because it violates the Seventh Amendment. However, additur is permissible in many state cases because the Seventh Amendment does not apply. In federal court, if the judge believes damages are too low, the court may grant a new trial.

Exam tip: When a potential Erie analysis arises on the MBE, pay close attention to the facts. If the court is not sitting in diversity and is exercising federal question jurisdiction, federal law will apply and there is no need to examine applicable state law.

D is correct. Under Erie, a federal court sitting in diversity is required to apply the substantive law of the state in which it sits and federal procedural law. This is a diversity case, so the court is required to apply the State A standard of «excessive» rather than «shocks the conscience» if it believes the damages are high. If the judge finds that the damages are excessive, he may offer a choice between a new trial OR remittitur. The court may not simply reduce the geologist's damages award on its own; it must give the geologist this choice. Reducing the damages without the option for a new trial would violate the Seventh Amendment right to a jury trial, which prevails over state law in Erie situations. As such, the farmer should pair a motion for remittitur with a motion for a new trial, in the alternative.

A is incorrect. This answer applies the incorrect standard for remittitur. Under the Erie doctrine, the court must follow the remittitur rules of the state in which it is situated, so the appropriate remittitur standard here is «excessive» rather than «shocks the conscience.»

B is incorrect. This choice is only partially correct. Although the farmer should move for remittitur and, in the alternative, a new trial, this choice lists the incorrect standard of «shocks the conscience.» As explained above, the correct standard for remittitur is «excessive,» not «shocks the conscience,» because the court is sitting in diversity and must apply the state substantive law issue under Erie.

C is incorrect. This choice is also only partially correct. The court should apply the State A standard of «excessiveness» here, but the farmer must file both motions to provide the geologist with an option between lowering the damages award through remittitur or a new trial. A federal court may not disregard a jury's finding on damage and reduce the damages award on its own. Doing so would violate the Seventh Amendment, which prevails over state law in Erie situations.