Originally from:

Journal of American Arbitration (JAA) - Vol. 5, No. 1

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Journal of American Arbitration (JAA)

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ARTICLES

Don’t Legislate from the Bench: The
Supreme Court of California Continues
to Hold Predispute Jury Trial Waivers
Unenforceable Until the California
Legislature Authorizes Otherwise
By Keitha Carter-Webb

I. OVERVIEW
The dispute involves a predispute jury waiver contained within an
engagement letter signed by petitioners and PricewaterhouseCoopers

L.L.P. (PWC).1 Petitioners hired PWC to conduct an independent
accounting audit on two limited partnerships, Grafton and Allied.2 PWC
sent petitioners a copy of the engagement letter that confirmed all of the
terms of the retainer agreement.3 The contract contained the heading
“[r]elease and indemnification,” which ordered the release of PWC from
liability in the event of misrepresentation by the partnership’s
management.4 The contract also stated that PWC would not be liable
except for willful misconduct or fraud.5 The following predispute waiver
clause was also contained within the engagement letter:
In the unlikely event that differences concerning [PWC’s] services
or fees should arise that are not resolved by mutual agreement, to
facilitate judicial resolution and save time and expense of both
parties, [petitioners and PWC] agree not to demand a trial by jury
in any action, proceeding or counterclaim arising out of or relating
to [PWC’s] services and fees for this engagement.6