Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-14-72343/USCOURTS-ca9-14-72343-0/pdf.json

Parties Involved:
County of Orange

Tata America International Corporation
Real Party in Interest
Tata Consultancy Services Ltd
Real Party in Interest
United States District Court for the Central District of California, Santa Ana
Respondent

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

IN RE COUNTY OF ORANGE,

COUNTY OF ORANGE, a political

subdivision of the State of

California,

Petitioner,

v.

UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF

CALIFORNIA, SANTA ANA,

Respondent,

TATA CONSULTANCY SERVICES

LTD., an Indian corporation; TATA

AMERICA INTERNATIONAL

CORPORATION, a New York

corporation,

Real Parties in Interest.

No. 14-72343

D.C. No.

8:13-cv-00683-

JLS-JC

OPINION

Petition For Writ Of Mandamus

Argued and Submitted

March 4, 2015—Pasadena, California

Filed April 16, 2015

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2 IN RE COUNTY OF ORANGE

Before: Ronald M. Gould and Richard C. Tallman, Circuit

Judges, and Edward R. Korman, Senior District Judge.*

Opinion by Judge Tallman

SUMMARY**

Writ of Mandamus / Erie Doctrine

The panel granted a petition for a writ of mandamus

brought by the County of Orange, California, and directed

the district court to deny Tata America International

Corporation’s motion to strike the County’s demand for a

jury trial.

Under California law, Grafton Partners, L.P. v. Superior

Court, 116 P.3d 479 (Cal. 2005), pre-dispute jury trial

waivers are invalid unless expressly authorized by statute. 

Federal law, on the other hand, permits such waivers as long

as each party waived its rights knowingly and voluntarily.

The panel held that the five factors to apply to a

mandamus petition, and announced in Bauman v. U.S.

District Court, 557 F.2d 650 (9th Cir. 1977), did not apply in

the extraordinary case where, as here, the petitioner claimed

erroneous deprivation of a jury trial. 

* The Honorable Edward R. Korman, Senior United States District Judge

for the Eastern District of New York, sitting by designation.

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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IN RE COUNTY OF ORANGE 3

Because no Federal Rule of Civil Procedure or federal

law governs pre-dispute jury trial waivers, the panel applied

the “relatively unguided” Erie R. Co. v. Tompkins, 304 U.S.

64 (1938), analysis. The panel found that the law governing

pre-dispute jury trial waivers was procedural under Erie, and

therefore federal courts should apply federal law to determine

the validity of a waiver. The panel also concluded that the

federal “knowing and voluntary” standard did not necessarily

conflict with California’s Grafton rule because the federal

standard was a constitutional minimum courts use to protect

litigants’ Seventh Amendment rights to trial by jury. The

panel held, therefore, that Erie’s federalism principle required

federal courts sitting in diversity to import, as the federal rule,

state law governing jury trial waivers, where, as here, state

law was even more protective than federal law of the jury

trial right. The panel applied California law, and held that the

parties’ contractual jury trial waiver was unenforceable. The

panel concluded that the district court erroneously deprived

a California county of a jury trial when it granted Tata

America’s motion to strike, and mandamus relief was

therefore warranted.

COUNSEL

Benjamin Parker Broderick (argued), Allan L. Schare,

Alexander George Brizolis, and Todd Thodora, Theodora

Oringher P.C., Costa Mesa, California, for Petitioner.

William A. Escobar (argued), Kelley Drey & Warren LLP,

New York, New York; Allison S. Brehm and Kenneth David

Kronstadt, Kelley Drey & Warren LLP, Los Angeles,

California, for Real Parties in Interest.

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4 IN RE COUNTY OF ORANGE

OPINION

TALLMAN, Circuit Judge:

This mandamus petition requires us to decide whether,

under Erie R. Co. v. Tompkins, 304 U.S. 64 (1938), a federal

court sitting in diversity applies state or federal law to

determine the validity of a pre-dispute jury trial waiver

contained in a contract governed by California law. 

California and federal law treat such waivers differently: 

Under California law, pre-dispute jury trial waivers are

invalid unless expressly authorized by statute. See Grafton

Partners, L.P. v. Superior Court, 116 P.3d 479 (Cal. 2005).1

Federal law, on the other hand, permits such waivers as long

as each party waived its rights knowingly and voluntarily. 

See Palmer v. Valdez, 560 F.3d 965, 968 (9th Cir. 2009). 

“The compatibility of these provisions, in an action based on

[California] law but tried in federal court by reason of the

parties’ diverse citizenship” implicates the Erie doctrine. 

Gasperini v. Ctr. for Humanities, Inc., 518 U.S. 415, 419

(1996). “Under the Erie doctrine, federal courts sitting in

diversity apply state substantive law and federal procedural

law.” Id. at 427.

Because no Federal Rule of Civil Procedure or federal

law governs pre-dispute jury trial waivers, we apply the

“relatively unguided” Erie analysis to answer the vertical

choice of law question presented here. See Hanna v. Plumer,

380 U.S. 460, 471 (1965). Doing so, we find that the law

governing pre-dispute jury trial waivers is procedural under

1 California Civil Code § 631, which Grafton interprets, expressly

authorizes several ways a party may waive its jury trial right. None are

applicable here.

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IN RE COUNTY OF ORANGE 5

Erie, and so federal courts should apply federal law to

determine the validity of a waiver. But we also conclude that

the federal “knowing and voluntary” standard does not

necessarily conflict with California’s Grafton rule because

the federal standard is a constitutional minimum courts use to

protect litigants’ Seventh Amendment rights to trial by jury.

2

We hold, therefore, that Erie’s federalism principle requires

federal courts sitting in diversity to import, as the federal rule,

state law governing jury trial waivers where, as here, state

law is even more protective than federal law of the jury trial

right. Applying California law, we hold that the parties’

contractual jury trial waiver is unenforceable. See Grafton,

116 P.3d at 492. And because “the only question presented

[here] . . . is whether the district court erred in denying

petitioner’s request for a jury trial,” Mondor v. U.S. District

Court, 910 F.2d 585, 586 (9th Cir. 1990), we GRANT the

County’s petition for writ of mandamus.

I

The dispute underlying this mandamus petition is a simple

breach of contract action. In 2007, Plaintiff - Petitioner the

County of Orange (the “County”) hired Defendant - Real

Party in Interest Tata America International Corporation and

its international affiliate (collectively, “Tata America”) to

develop a property tax management system. In 2008, the

parties entered into a contract for professional services to

develop and implement the computerized system. The

contract became final when the County Board of Supervisors

approved it on July 15, 2008. The contract contains an

2 The Seventh Amendment provides that “[i]n Suits at common law . . . ,

the right of trial by jury shall be preserved.” U.S. Const. amend. VII

(emphasis added).

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6 IN RE COUNTY OF ORANGE

unambiguous clause by which each party agrees to waive its

right to a jury trial in any dispute arising out of the contract. 

That clause provides:

Waiver of Jury Trial. Each party

acknowledges that it is aware of and has had

the opportunity to seek advice of counsel of

its choice with respect to its rights to trial by

jury, and each party, for itself and its

successors, creditors, and assigns, does hereby

expressly and knowinglywaive and release all

such rights to trial by jury in any action,

proceeding or counterclaim brought by any

party hereto against the other (and/or against

its officers, directors, employees, agents, or

subsidiary or affiliated entities) on or with

regard to any matters whatsoever arising out

of or in any way connected with this Contract

and/or any other claim of injury or damage.

The contract also contains a California choice of law clause.

Tata America did not perform its obligations under the

contract to the County’s satisfaction, and, in 2013, the County

filed a breach of contract action in the United States District

Court for the Central District of California, invoking that

court’s diversity jurisdiction. See Compl. 1, Apr. 30, 2013,

ECF No. 1. The County sued under California contract law,

asserting claims for promissory fraud, fraudulent

misrepresentation, fraudulent concealment, negligent

misrepresentation, and breach of contract. In general, the

County alleges that Tata America “failed to live up to the

representations and promises [it] made to the County and also

failed to comply with generally accepted industry standards.” 

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IN RE COUNTY OF ORANGE 7

The Complaint and the First Amended Complaint both

include a jury trial demand.

Tata America filed a motion to strike the County’s jury

demand. See Tata Mot. to Strike 1, Apr. 22, 2014, ECF No.

40. It argued that the County waived its right to a jury trial

by proposing and signing the contract containing the jury trial

waiver. See id. at 1–2. In its motion, Tata America invoked

the district court’s power under Federal Rule of Civil

Procedure 39, which permits a district court to strike a jury

demand if it “finds that on some or all of [the issues raised]

there is no federal right to a jury trial.” Fed. R. Civ. P.

39(a)(2).

In a thoughtful and well reasoned opinion, the district

court granted Tata America’s motion to strike. See Cnty. of

Orange v. Tata Consultancy Serv. Ltd., Case No.

8:13-cv-00683-JLS-JC (C.D. Cal. June 10, 2014) (ECF No.

51) (In Chambers) (Order Granting Defendant’s Motion to

Strike). Noting that “[t]he parties dispute whether federal or

California law applies to the determination of whether the

County has waived its right to a jury trial,” the court invoked

the Erie doctrine. See id. at *3. It relied on Simler v. Conner,

372 U.S. 221, 222 (1963), and Byrd v. Blue Ridge Rural

Electric Cooperative, Inc., 356 U.S. 525, 537–38 (1958), to

conclude that the right to a jury trial—including waiver of

that right—is a federal procedural issue controlled in federal

court by federal law. See Cnty. of Orange, Case No.

8:13-cv-00683-JLS-JC, at *5. It invoked Herron v. Southern

Pacific Co., 283 U.S. 91, 94 (1931), as a basis for rejecting

the County’s argument that California’s prohibition on

contractual jury trial waivers controls in federal court. 

Applying this authority, the court “conclude[d] that federal

law, not California law, governs the question of whether a

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8 IN RE COUNTY OF ORANGE

party has waived its right to a jury trial in federal court.” See

Cnty. of Orange, Case No. 8:13-cv-00683-JLS-JC, at *6. 

Applying federal law, the district court determined that the

County—which drafted the jury waiver at issue here—

knowingly and voluntarily waived its right to a jury trial. Id.

at *6–7.

The County then filed the petition for writ of mandamus

currently before us. In its petition, the County argues that the

district court erred under Erie when it applied federal law to

evaluate the validity of the waiver. The All Writs Act,

28 U.S.C. § 1651, gives us jurisdiction to resolve this

dispute.3

II

A

Before tackling the Erie issue, we consider whether to

apply the five factors announced in Bauman v. U.S. District

Court, 557 F.2d 650 (9th Cir. 1977), to a mandamus

petition—like the County’s—that alleges the erroneous

deprivation of a jury trial.

The All Writs Act provides that federal courts “may issue

all writs necessary or appropriate in aid of their respective

jurisdictions and agreeable to the usages and principles of

law.” 28 U.S.C. § 1651. “A writ of mandamus is an

3 We review de novo “[w]hether state or federal law applies in a

diversity action.” Olympic Sports Prods., Inc. v. Universal Athletic Sales

Co., 760 F.2d 910, 912 (9th Cir. 1985). We also review de novo whether

a party validly waived its right to a jury trial. Palmer v. Valdez, 560 F.3d

965, 968 (9th Cir. 2009).

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IN RE COUNTY OF ORANGE 9

extraordinary or drastic remedy, used only to confine an

inferior court to a lawful exercise of its prescribed jurisdiction

or to compel it to exercise its authority when it is its duty to

do so.” In re Sussex, — F.3d —, No. 14-70158, 2015 WL

1379852, at *3 (9th Cir. Jan. 27, 2015) (internal quotation

marks omitted). Thus, the petitioner carries the high burden

of establishing that his or her “right to issuance of the writ is

clear and indisputable.” Bauman, 557 F.2d at 656 (quotation

marks omitted).

To evaluate whether the petitioner has carried this burden,

we ordinarily examine the five factors set forth in Bauman:

(1) The party seeking the writ has no other

adequate means, such as direct appeal, to

attain the relief he or she desires. (2) The

petitioner will be damaged or prejudiced in a

way not correctable on appeal. (This

guideline is closely related to the first.) 

(3) The district court’s order is clearly

erroneous as a matter of law. (4) The district

court’s order is an oft-repeated error, or

manifests a persistent disregard of the federal

rules. (5) The district court’s order raises

new and important problems, or issues of law

of first impression.

Id. at 654–55 (citations omitted); see also In re Sussex, 2015

WL 1379852, at *3.

But Bauman does not apply in the extraordinary case

where the petitioner claims erroneous deprivation of a jury

trial. “The right to a jury trial . . . has occupied an

exceptional place in the history of the law of federal

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10 IN RE COUNTY OF ORANGE

mandamus . . . .” Wilmington Trust v. U.S. Dist. Court,

934 F.2d 1026, 1028 (9th Cir. 1991); see also 16 The Late

Charles Alan Wright et al., Fed. Prac. & Proc. Juris.

§ 3935.1 (3d ed. 2014). For that reason, we will “grant

mandamus where necessary to protect the constitutional right

to trial by jury. If the plaintiffs are entitled to a jury trial,

their right to the writ is clear.” Tushner v. U.S. Dist. Court,

829 F.2d 853, 855 (9th Cir. 1987) (Kennedy, J.) (citations

omitted); see also Mondor, 910 F.2d at 585–86 (“While

mandamus relief is extraordinary and is available only in very

limited circumstances, the wrongful denial of a jury trial is an

appropriate basis for such relief.”).

Thus where, as here, the mandamus petition alleges the

erroneous deprivation of a jury trial, the Bauman factors are

inapplicable and “the only question presented . . . is whether

the district court erred in denying petitioner’s request for a

jury trial.” Mondor, 910 F.2d at 586. Furthermore, we may

issue the writ even if “the petitioner is unable to show a ‘clear

and indisputable’ right” to it. Wilmington Trust, 934 F.2d at

1028.

B

To decide whether the district court erred in denying

petitioner’s request for a jury trial we must first

determine—under Erie and its progeny—whether federal

district courts sitting in diversity apply federal or state law to

evaluate the validity of a pre-dispute jury trial waiver. State

and federal law treat such clauses differently: California

generally prohibits pre-dispute waivers, Grafton, 116 P.3d at

479, but federal law permits them as long as the parties

waived their rights knowingly and voluntarily, see Nat’l

Equip. Rental, Ltd. v. Hendrix, 565 F.2d 255, 258 (2d Cir.

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IN RE COUNTY OF ORANGE 11

1977). Although courts (including ours) generally recognize

that a party’s right to a jury trial in federal court is a federal

issue controlled by federal law, no circuit court has

considered the narrower question presented here: What law

should federal courts sitting in diversity apply to determine

the validity of a jury trial waiver clause when state law is

more protective than federal law of the right to a jury trial?

i

To answer this question, we begin with Erie. Or rather,

with the Rules of Decision Act, 28 U.S.C. § 1652. The Rules

of Decision Act provides that “[t]he laws of the several states,

except where the Constitution or treaties of the United States

or Acts of Congress otherwise require or provide, shall be

regarded as rules of decision in civil actions in the courts of

the United States, in cases where they apply.” Id. The

Supreme Court interpreted the Rules of Decision Act in Erie. 

It held that “[e]xcept 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” including state statutory and

common law. Erie, 304 U.S. at 78. Although this holding

seems to preclude entirely application of federal common law

in diversity cases, subsequent decisions have not read Erie so

strictly. See, e.g., Snead v. Metro. Prop. & Cas. Ins. Co.,

237 F.3d 1080, 1094 (9th Cir. 2001) (applying the McDonnell

Douglas burden-shifting model—which is federal decisional

law—in the face of a countervailing state rule because the

state rule is procedural); cf. Semtek Int’l Inc. v. Lockheed

Martin Corp., 531 U.S. 497, 508 (2001) (“[F]ederal common

law governs the claim-preclusive effect of a dismissal by a

federal court sitting in diversity.”). Rather, Erie has come to

stand for the general principle that “federal courts sitting in

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12 IN RE COUNTY OF ORANGE

diversity apply state substantive law and federal procedural

law.” Gasperini, 518 U.S. at 427.

When confronted with an Erie question, we first ask

whether a Federal Rule of Civil Procedure or a federal law

governs. Hanna, 380 U.S. at 470–71. If so, we will apply

that rule—even in the face of a countervailing state rule—as

long as it is constitutional and within the scope of the Rules

Enabling Act, 28 U.S.C. § 2072. Olympic Sports Prods. v.

Universal Athletic Sales Co., 760 F.2d 910, 914–15 (9th Cir.

1985) (describing analysis);see also Shady Grove Orthopedic

Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 398 (2010)

(same).

Absent an applicable Federal Rule or law, we apply the

“relatively unguided” Erie analysis, Hanna, 380 U.S. at 471,

which calls on us to determine whether the rules at issue are

substantive or procedural, see Gasperini, 518 U.S. at 427. A

substantive rule is one that creates rights or obligations, or “is

bound up with [state-created] rights and obligations in such

a way that its application in the federal court is required.” 

Byrd, 356 U.S. at 535. A procedural rule, by contrast, defines

“a form and mode of enforcing” the substantive right or

obligation. Id. at 536. Although helpful, these definitions

have their limits: “[T]here is no bright line distinguishing

substance from procedure, [and] the meanings of these terms

shade into one another by degrees and vary from context to

context.” Larry Kramer, Choice of Law in Complex

Litigation, 71 N.Y.U. L. Rev. 547, 569 (1996); see also

Gasperini, 518 U.S. at 427 (“Classification of a law as

‘substantive’ or ‘procedural’ for Erie purposes is sometimes

a challenging endeavor.”).

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IN RE COUNTY OF ORANGE 13

Thus, even more so than the substantive/procedural

labels, our “unguided analysis” is informed by Erie’s “core

policies.” Olympic Sports Prods., 760 F.2d at 913. These

policies require us to consider whether application of the

federal rule would (1) be “outcome determinative,”

(2) encourage “forum-shopping” between state and federal

courts, or (3) lead to “inequitable administration of the laws.” 

Hanna, 380 U.S. at 468 (describing Erie’s “twin aims”);

Guar. Trust Co. of N.Y. v. York, 326 U.S. 99, 110 (1945)

(describing the “outcome determinative” test). If so, the state

rule is likely substantive and we will apply it in federal court. 

On the other hand, if the rule implicates an essential

characteristic of the federal system, we typically apply the

federal rule. See, e.g., Gasperini, 518 U.S. at 432; Byrd,

356 U.S. at 537–38.

ii

Although we face an issue of first impression, we do not

write on an entirely blank slate. Federal courts (including

ours) have applied Erie to hold that the right to a jury trial is

a federal procedural issue controlled by federal law. For

example, in Simler, the Court considered whether state or

federal law governs when a court must determine if an action

is legal or equitable “for the purpose of deciding whether the

claimant has a right to a jury trial.” 372 U.S. at 221. The

Court held that “the right to a jury trial in the federal courts

is to be determined as a matter of federal law in diversity as

well as other actions.” Id. at 222. In Byrd, the Court held

that federal courts sitting in diversity must apply federal law

to determine whether a particular factual matter should be

decided by a judge or a jury. Byrd, 356 U.S. at 533–35. 

Circuit courts, including the Ninth Circuit, cite these cases for

the general proposition that federal courts sitting in diversity

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14 IN RE COUNTY OF ORANGE

apply federal law to determine the scope of the parties’ rights

to a jury trial. See, e.g., Granite State Ins. Co. v. Smart

Modular Techs., Inc., 76 F.3d 1023, 1026–27 (9th Cir. 1996)

(“In a diversity action, federal law governs whether a party is

entitled to a jury trial and if so, on what issues.”).

Several of our sister circuits have applied this general rule

to hold that federal courts sitting in diversity look to federal

law to determine the enforceability of a jury trial waiver

clause such as the one at issue here. See, e.g., Hergenreder

v. Bickford Senior Living Grp., LLC, 656 F.3d 411, 420–21

(6th Cir. 2011); Tracinda Corp. v. DaimlerChrysler AG,

502 F.3d 212, 222 (3d Cir. 2007); Merrill Lynch & Co. Inc.

v. Allegheny Energy, Inc., 500 F.3d 171, 188 (2d Cir. 2007);

Medical Air Tech. Corp. v. Marwan Inv., Inc., 303 F.3d 11,

18 (1st Cir. 2002); Telum, Inc. v. E.F. Hutton Credit Corp.,

859 F.2d 835, 837 (10th Cir. 1988); Leasing Serv. Corp. v.

Crane, 804 F.2d 828, 832–33 (4th Cir. 1986). The Seventh

Circuit took a different approach in IFC Credit Corp. v.

United Business &Industrial Federal Credit Union, 512 F.3d

989, 991–92 (7th Cir. 2008) (Easterbrook, C.J.). There, the

court held that even if federal law governs whether a litigant

waived its right to a jury trial in federal court, federal courts

should import the state rule of decision to determine the

validity of a pre-dispute waiver because “there is no general

federal law of contracts after Erie.” Id.

But the way California law deals with the validity of

pre-dispute waivers makes these cases distinguishable from

ours. Unlike state law in the First, Second, Third, Fourth,

Sixth, Seventh, andTenth Circuits, California law (alongwith

Georgia law) is more protective than federal law of the right

to trial by jury. Under California (and Georgia) law, parties

to a contract cannot waive their right to a jury trial before a

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IN RE COUNTY OF ORANGE 15

dispute commences, and any contract provision seeking to

effect such a waiver is unenforceable unless expressly

authorized by statute. See Grafton, 116 P.3d at 484.

Recognizing this difference, California and Georgia

district courts sitting in diversity have split on whether state

or federal law governs the validity of a pre-dispute jury trial

waiver. Compare Pallen Martial Arts, LLC v. Shir Martial

Arts, LLC, Case No. 13-cv-05898-JST, 2014 WL2191378, at

*9 (N.D. Cal. May 23, 2014) (“[T]he growing consensus in

this district is that jury trial waivers are unenforceable in

contract actions brought under California law.”), and GE

Commercial Fin. Bus. Prop. Corp. v. Heard, 621 F. Supp. 2d

1305, 1310 (M.D. Ga. 2009) (“[T]he Court finds that the

contractual jury trial waivers in the Georgia contracts are

null and void under Georgia law and consequently not

enforceable in this action.”), with Cnty. of Orange, Case No.

8:13-cv-00683-JLS-JC, at *5–6 (order appealed here)

(applying the federal “knowing and voluntary” standard to

evaluate the validity of a pre-dispute jury trial waiver), and

GEM Acquisitionco, LLC v. Sorenson Grp. Holdings, LLC,

No. C 09-01484 SI, 2009 WL 3246747, at *4, *6 (N.D. Cal.

Oct. 8, 2009) (same); see also Brian S. Thomley, Comment,

Nothing is Sacred: Why Georgia and California Cannot Bar

Contractual Jury Waivers in Federal Court, 12 Chap. L. Rev.

127, 145 (2008) (noting the divergent case law on this issue).

iii

As this case law suggests, we are not presented with an

easy question. “[C]lassification of a law as ‘substantive’ or

‘procedural’ for Erie purposes is sometimes a challenging

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16 IN RE COUNTY OF ORANGE

endeavor. This is one of those times.” Snead, 237 F.3d at

1090 (internal citations and quotation marks omitted).4

On the one hand, rules dictating when a party waives its

right to a jury trial are procedural, and “federal courts sitting

in diversity apply . . . federal procedural law.” Gasperini,

518 U.S. at 427. California’s rule that pre-dispute jury trial

waivers are unenforceable is not a rule that creates “rights and

obligations” for the parties to a contract, see Byrd, 356 U.S.

at 535, nor is it a rule that dictates the substance of a potential

award, see Gasperini, 518 U.S. at 428. Rather, the

rule—which allocates tasks between a judge and a

jury—describes “merely a form and mode of enforcing” the

law. Byrd, 356 U.S. at 536; see also Gasperini, 518 U.S. at

426 (noting that a law is procedural when it “assigns

decisionmaking authority”); Wabol v. Villacrusis, 958 F.2d

1450, 1460 (9th Cir. 1990) (“The jury trial guarantee is

primarily a procedural right designed to safeguard the broader

and more fundamental right to a fair trial . . . .”). Such rules

are procedural under Erie.

4 We use the “relatively unguided” Erie analysis because neither a

Federal Rule of Civil Procedure nor a federal law dictates whether predispute jury trial waivers are enforceable in federal court. See Hanna, 380

U.S. at 470–71; Olympic Sports Prods., 760 F.2d at 914. Federal Rules

of Civil Procedure 38 and 39 relate to jury trial waivers, but only in the

context of cases already in litigation. See Fed. R. Civ. P. 38(d)

(explaining that a party waives its right to a jury trial by failing to properly

request one); Fed. R. Civ. P. 39 (giving district courts the power to strike

a demand for a jury trial on certain issues). And although the Federal

Arbitration Act, 9 U.S.C. §§ 1–19, permits pre-dispute jury trial waivers,

the Act is not applicable here because it addresses such waivers only in the

context of arbitration clauses, and the contract at issue contains no such

clause.

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IN RE COUNTY OF ORANGE 17

Also, application of the federal rule in federal court would

not be “outcome determinative”: California’s Grafton rule

does not “‘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.’” 

Snead, 237 F.3d at 1090 (alterations in original) (quoting

Gasperini, 518 U.S. at 427). It is too speculative to assume

that an individual who signs a contract containing a jury trial

waiver would seek to void that waiver by rushing to sue an

adversaryin the adversary’s home-state court (from which the

adversary could not remove to federal court, see 28 U.S.C.

§ 1441(b)(2)). Viewed this way, application of the federal

law would not promote forum-shopping or cause inequitable

administration of the law. See Chambers v. NASCO, Inc.,

501 U.S. 32, 53 (1991) (a rule will not implicate Erie’s twin

aims when its application to the parties is uncertain). Byrd

confirms that federal courts can apply federal law on jury trial

waivers without undermining Erie’s core principles: It notes

that whether a case is tried by a judge or a jury does not

create “the certainty that a different result would follow, . . .

or even the strong possibility that this would be the case.” 

Byrd, 356 U.S. at 539 (internal citations omitted). But see

Bernhardt v. Polygraphic Co. of Am., 350 U.S. 198, 203

(1956) (“The nature of the tribunal where suits are tried is an

important part of the parcel of rights behind a cause of

action.”).

On the other hand, California’s rule is substantive. It is

a state rule of contract interpretation that furthers the state

constitutional policy favoring jury trials, Grafton, 116 P.3d at

482, and rules of contract interpretation and construction are

plainly substantive under Erie, see IFC Credit Corp.,

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18 IN RE COUNTY OF ORANGE

512 F.3d at 991–92 (“There is no general federal law of

contracts after” Erie).

But even if we view California’s rule as primarily

procedural, we are not convinced that federal courts sitting in

diversity may disregard it. As we recognized in Feldman v.

Allstate Insurance Co., 322 F.3d 660 (9th Cir. 2003), federal

courts sitting in diversity must give full effect to state

procedural rules when those rules are “intimately bound up

with the state’s substantive decision making” or “serve

substantive state policies.” Id. at 667 (quotation marks

omitted); see also Byrd, 356 U.S. at 535. California’s rule on

pre-dispute jury trial waivers embodies the state’s substantive

interest in preserving the “right to a jury trial in the strongest

possible terms,” Grafton, 116 P.3d at 482, an interest the

California Constitution zealously guards, see Cal. Const. art.

I, § 16 (“Trial by jury is an inviolate right and shall be

secured to all . . . .”). Also, respecting that interest reinforces

the Federal Constitution’s preservation of jury trials in civil

cases. See U.S. Const. amend. VII.

So the question becomes: Can “federal courts . . . give

effect to the substantive thrust of [California’s rule] without

untoward alteration of the federal scheme for the trial and

decision of civil cases[?]” Gasperini, 518 U.S. at 426. We

believe we can.

We hold, first, that federal procedural law governs the

validity of a pre-dispute jury trial waiver in federal court. 

This comports with Simler and Byrd, in which the Supreme

Court held that the scope of the right to a jury trial in a

federal diversity case is a federal procedural issue governed

by federal law. Simler, 372 U.S. at 221; Byrd, 356 U.S. at

533–35. It also fits with our general understanding of the jury

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IN RE COUNTY OF ORANGE 19

trial right as a procedural right that guarantees a particular

mode of enforcing certain substantive rights. See Wabol,

958 F.2d at 1460 (interpreting the Sixth Amendment right to

a jury trial). Having determined that federal law applies, we

must next ask: What is the federal rule?

The federal “knowing and voluntary” standard adopted by

the district court is not a generally applicable federal rule, but

rather a federal constitutional minimum. “Maintenance of the

jury as a fact-finding body [in both civil and criminal cases]

is of such importance and occupies so firm a place in our

history and jurisprudence that any seeming curtailment of the

right to a jury trial should be scrutinized with the utmost

care.” Dimick v. Schiedt, 293 U.S. 474, 486 (1935) (citations

omitted); see also Hendrix, 565 F.2d at 258 (“It is elementary

that the Seventh Amendment right to a jury is fundamental

and that its protections can only be relinquished knowingly

and intentionally.” (emphasis added)), cited with approval in

Palmer, 560 F.3d at 968. But a federal constitutional

minimum is inapplicable where, as here, state law is more

protective than federal law of federal constitutional rights. 

There is, thus, no federal rule that governs the validity of a

pre-dispute jury trial waiver when state law is more protective

than federal law of the jury trial right.

When faced with such a gap, Erie’s federalism principle

directs us to import state law as the federal rule rather than

construct a new federal common law rule. Erie ensures that

“a federal court adjudicating a state-created right solely

because of the diversity of citizenship of the parties is for that

purpose, in effect, only another court of the State . . . .” 

Guar. Trust, 326 U.S. at 108. To that end, and absent a

countervailing federal rule or interest, federal courts should

adjudicate state-created rights in a manner that closely

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20 IN RE COUNTY OF ORANGE

resembles the way in which a state court would adjudicate

that same right. See, e.g., Bernhardt, 350 U.S. at 202–03. 

This goal is particularly important where, as here, the state

rule has a “substantive thrust.” See Gasperini, 518 U.S. at

426. And while expansion of a federal common law rule may

be necessary when federal interests require a “nationally

uniform body of law,” United States v. Kimball Foods, Inc.,

440 U.S. 715, 728 (1979); Byrd, 356 U.S. at 537, here, federal

courts can ensure uniform protection of Seventh Amendment

rights by permitting parties to waive those rights—at

minimum—knowinglyand voluntarily,see Hendrix, 565 F.2d

at 258, while still adhering to California’s Grafton rule. For

these reasons, “[t]his is, it seems to us, a classic case for

adopting, as the federally prescribed rule of decision, the law

that would be applied by state courts in the State” whose law

governs the contract. See Semtek, 531 U.S. at 508.

To recap: The law governing jury trial waivers in federal

court is federal procedural law. But the federal rule most

courts use to evaluate such waivers—the “knowing and

voluntary” standard—is a federal constitutional minimum. 

Its application is not required where, as here, state law is

more protective than federal law of the jury trial right. So we

are faced with a void in federal law. Rather than expand the

constitutional “knowing and voluntary” standard to fill that

void, we adopt state law as the federal rule. This means that

federal courts sitting in diversitymust apply the relevant state

law to evaluate the validity of a pre-dispute jury trial waiver

when that law is more protective than federal law.

C

The parties’ contract is governed by California law. 

California law holds, as a matter of public policy, that a

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IN RE COUNTY OF ORANGE 21

litigant cannot waive its right to a jury trial by entering into

a contract that contains a pre-dispute jury trial waiver clause. 

Grafton, 116 P.3d at 484, 488 (citing Cal. Const. art. I, § 16

and Cal. Civ. Code § 631). This rule is more protective of the

right to a jury trial than the federal “knowing and voluntary”

standard. See Hendrix, 565 F.2d at 258. For that reason,

district courts sitting in diversity must apply California’s rule

on pre-dispute jury trial waivers to contracts governed by

California law.

The district court thus erred when it applied the federal

“knowing and voluntary” standard to uphold the parties’

waiver. While we agree that the County knowingly and

voluntarily waived its right to a jury trial by drafting,

proposing, and signing a contract that contained a jury trial

waiver, California—not federal—law dictates the validity of

the waiver clause. And under California law, the parties’ predispute waiver clause is unenforceable.

5

See Grafton,

116 P.3d at 481. When it granted Tata America’s motion to

strike, the district court erroneously deprived a California

county of a jury trial. Mandamus relief is therefore

warranted. See Mondor, 910 F.2d at 585–86.

5 We are unpersuaded by Tata America’s argument that the parties’ jury

trial waiver is enforceable under California law notwithstanding Grafton. 

Tata America cited no post-Grafton authority for its assertion that

“although section 631 does not specifically address legislative waivers of

the right to a jury trial, California Government Code section 25203 [which

permits the County’s Board of Supervisors to enter into contracts and

control litigation on behalf of the County] implicitly provides for the

predispute waiver of jury trials.” We decline to infer such a broad

exception to Grafton, particularly in light of that case’s unequivocal

holding that “section 631 does not authorize predispute waiver of [the

right to a jury trial].” Grafton, 116 P.3d at 488.

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22 IN RE COUNTY OF ORANGE

III

For these reasons, we grant Orange County’s petition for

writ of mandamus. We direct the district court to deny Tata

America’s motion to strike the County’s demand for a jury

trial.

Each party shall bear its own costs.

PETITION GRANTED.

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