Supreme Court of California declares pre-dispute jury trial waivers invalid

Sacramento, California (Ashley West, Esq.) - A contract that waives a party's right to a jury trial is no longer enforceable. On August 4, 2005, the Supreme Court of California concluded that no party can waive its constitutional and statutory right to a jury trial in advance of the dispute. See Grafton Partners L.P. v. Superior Court (Price Waterhouse Coopers L.L.P.) (2005), Cal.4th (No. S123344).

Both the Constitution of the State of California and California Civil Code Section 631 preserve a party's right to jury trial. Section 631 prescribes that a party may waive a jury trial in civil cases in a limited number of circumstances, including failure to appear at trial, failure to demand jury trial within a specified period after the case is set for trial, failure to pay required fees in advance or during trial, oral consent in open court, or written consent filed with the clerk or the court. The list does not include pre-dispute contractual waivers.

Arbitration provisions are specifically authorized by statute and are therefore still valid and binding. See California Civil Code Section 1281, which provides "a written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract." The Court specifically recognized the validity of arbitration provisions and said, "Arbitration agreements are distinguishable from waivers of the right to jury trial in that they represent an agreement to avoid the judicial forum altogether.... A principal feature of an arbitration agreement is that the contracting parties agree they will not submit their controversy to a court of law in the first instance." See Id; Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699 , 713.

For advice on pre-dispute jury trial waivers, please contact Ashley West.