12. Which motion should the hospital 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).

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.

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.

C is correct. This lawsuit arises under federal question jurisdiction, not diversity, which means there is no Erie problem and federal law applies to the entire case. As a result, the «shocks the conscience» standard, not the State A «excessiveness» standard, applies here. The hospital should therefore submit both a motion for a new trial and, in the alternative, a motion for remittitur because, under the Seventh Amendment, a federal court may not simply disregard the jury's damages award and lower it. The court must offer the hospital the choice between remittitur and a new trial.

A is incorrect. Although the court should, in fact, apply the federal standard of «shocks the conscience,» the hospital must pair the remittitur motion with a motion for a new trial. Under the Seventh Amendment, a federal court may not disregard a jury's finding on damages and reduce the award on its own. As such, the hospital should file both motions so the pharmacist may have the option between lowering the damages award or a new trial.

B is incorrect. Not only does this choice use the incorrect standard for remittitur (State A's «excessive» as opposed to the federal «shocks the conscience» standard), but it also fails to include the requirement that the hospital file an alternative motion for a new trial. As explained above, this is not a diversity case, which means there is no Erie problem and the court should exclusively apply federal law.

D is incorrect. This answer is only partially correct. Although the hospital should move for remittitur or, in the alternative, a new trial, this choice lists the incorrect standard of «excessive.» As explained above, the correct standard for remittitur is «shocks the conscience,» not «excessive,» because this is a federal question case and only federal law applies, not state substantive law.