Predispute Waivers of Jury Trial Right Are Invalid
In Grafton Partners L.P. v. Superior Court (2005) 36 C.4th 944, 32 C.R.3d 5, 116 P.3d 479, plaintiff businesses engaged defendant auditing firm under an agreement that included a waiver of jury trial in the case of a dispute between the parties. When a dispute arose, plaintiffs demanded a jury trial, and the trial judge, relying on the waiver, granted defendant's motion to strike the jury demand. The Court of Appeal granted plaintiffs' petition for writ relief. Held, judgment of the Court of Appeal affirmed; predispute jury trial waivers are invalid.
(a) The Constitution. Cal. Const., Art. I, §16, accords the parties to a civil dispute the right to a trial by jury, with only limited exceptions, and specifies that any waiver may occur only by consent of the parties "as provided by statute." (63 C.4th 951.) The original state Constitution set out the jury trial right in the strongest possible terms, and the subsequent history of constitutional revision and interpretation reflects "an unwavering commitment to the principle that the right to a civil jury trial may be waived only as the Legislature prescribes, even in the face of concerns that the interests of the parties and the courts would benefit from a relaxation of this requirement." (36 C.4th 955, quoting from the Court of Appeal opinion.) Although the court in Trizec Properties v. Superior Court (1991) 229 C.A.3d 1616, 280 C.R.2d 885, 7 Cal. Proc. (4th), Trial, §114, concluded that Cal. Const., Art. I, §16, could not be read to prohibit individuals from waiving the jury trial right in advance of any action, the court drew support for that conclusion from cases enforcing arbitration agreements, and predispute arbitration agreements, unlike predispute jury waivers, are specifically authorized by statute. (36 C.4th 955.)
(b) The Statute. C.C.P. 631 is the sole statute governing waiver of the jury trial right in the civil context, and it sets forth six methods of waiver. Under C.C.P. 631(d)(2), the right may be waived by "written consent filed with the clerk or judge." Defendant contends that this language means that individuals may waive the jury trial right by contract prior to any legal dispute, as long as one of them, after becoming a party to litigation concerning the dispute, files the waiver. However, "[w]e believe the language of section 631, subdivision (d) strongly suggests that waiver of the right to jury trial must occur subsequent to the initiation of a civil lawsuit." At the very least, the statute is ambiguous about the validity of waivers entered into before the emergence of a legal dispute. (36 C.4th 958.) As any ambiguity must be resolved in favor of preserving the jury trial right, C.C.P. 631(d)(2) cannot be interpreted as allowing predispute waivers. (36 C.4th 961.)
(c) Majority Rule. The majority of state and federal jurisdictions permit predispute waiver of the right to jury trial. However, there is no evidence that those jurisdictions have constitutional provisions, like California's, that have been interpreted as requiring exclusively legislative authorization for waiver. The argument that California departs from a practice allowed or encouraged by a majority of other jurisdictions is better addressed to the Legislature, which can weigh the benefits of adopting a predispute waiver rule and provide safeguards against any problems that doing so might cause. (36 C.4th 96.)
(d) Retrospective Application. Ordinarily judicial decisions operate retrospectively. Prospective application may be appropriate where the decision alters a settled rule on which parties have justifiably relied, but this normally happens only when the decision constitutes a clear break with decisions of the Supreme Court, or with practices that the Supreme Court has sanctioned by implication, or when the Supreme Court has disapproved a longstanding and widespread practice expressly approved by a near-unanimous body of lower-court authority. The decision in Trizec, supra, a single Court of Appeal decision that erroneously interpreted the Constitution, is not the kind of uniform body of law that might be justifiably relied on. (36 C.4th 967.)
A single justice concurred, agreeing that the majority opinion adhered to a "strict parsing" of the relevant statute, but urging the Legislature to expressly authorize predispute jury waivers. (36 C.4th 968.)
On jury trial waivers in the civil context, see 7 Cal. Proc. (4th), Trial, §113 et seq.
On the constitutional right to a trial by jury, see 7 Summary (10th), Constitutional Law, §208 et seq.
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