ROSS DRESS FOR LESS, INC. V. MAKARIOS-OREGON, LLC, No. 21-35106 (9th Cir. 2022)
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Plaintiff Ross Dress for Less, Inc. sued Makarios seeking declaratory relief regarding its end-of-lease obligations in connection with Ross’s lease of the Richmond Building, as to which Makarios had received an assignment of rights and thereafter acted as Ross’s landlord. Makarios demanded a jury trial on its counterclaims. Ross filed a document waiving its right to a jury trial under Fed. R. Civ. P. 38. Makarios moved to withdraw its jury demand. Ross argued it was entitled to rely on Makarios’s request for a jury. The district court held a four-day Phase II bench trial and entered judgment in favor of Makarios.
The Ninth Circuit affirmed the district court’s ruling granting Defendant’s motion to withdraw its demand for a jury trial. The court explained that because jurisdiction in the district court was based on diversity of citizenship, Oregon substantive law and federal procedural law governed.
The court wrote that neither party argued that the waiver in Section 13.04 of the lease was unknowing or involuntary, but the parties disagreed on the scope of the provisions. The court held that the ordinary meaning of Section 13.04 was clear and it established that Ross waived its right to a jury trial on counterclaims filed by Makarios. The court rejected Ross’s argument that even if it contractually waived its jury trial right, it was still entitled to rely on Makarios’s jury demand under Rules 38(d) and 39(a). The court held that typically, the combination of Rules 38(d) and 39(a) prevents a party from unilaterally withdrawing its jury demand, even when no other party has requested a jury trial.
Court Description: Jury Trial. The panel affirmed the district court’s ruling granting defendant-appellee Makarios-Oregon, LLC’s motion to withdraw its demand for a jury trial in a diversity action involving the parties’ lease obligations. Plaintiff Ross Dress for Less, Inc. sued Makarios seeking declaratory relief regarding its end-of-lease obligations in connection with Ross’s lease of the Richmond Building, as to which Makarios had received an assignment of rights and thereafter acted as Ross’s landlord. Makarios filed counterclaims against Ross and demanded a jury trial on its counterclaims. In January 2016, Ross filed a document waiving its right to a jury trial under Fed. R. Civ. P. 38. In November 2018, Makarios moved to withdraw its jury demand. Ross argued it was entitled to rely on Makarios’s request for a jury. Makarios argued that because Ross waived its right to a jury when it entered into the Richmond Building * The Honorable Frederic Block, United States District Judge for the Eastern District of New York, sitting by designation. 4 ROSS DRESS FOR LESS V. MAKARIOS-OREGON lease, Ross could not object to Makarios’s withdrawal of its jury demand or to take advantage of the general rule that parties must consent to a bench trial after a proper jury demand is made. The district court held a four-day Phase II bench trial and entered judgment in favor of Makarios. Fed. R. Civ. P. 38(d) provides that a proper jury trial demand “may be withdrawn only if the parties consent.” Fed. R. Civ. P. 39 requires trial by jury “on all issues demanded” unless the parties stipulate or the “court, on motion, or on its own, finds that on some or all of those issues there is no federal right to a jury trial.” Because jurisdiction in the district court was based on diversity of citizenship, Oregon substantive law and federal procedural law governed. Ross contended that the district court erred by allowing Makarios to unilaterally withdraw its demand for a jury trial because Fed. R. Civ. P. 38(d) and 39(a) required Ross’s consent. Neither party argued that the waiver in Section 13.04 of the lease was unknowing or involuntary, but the parties disagreed on the scope of the provisions. First, applying Oregon law, the panel held that the ordinary meaning of Section 13.04 was clear and it established that Ross waived its right to a jury trial on counterclaims filed by Makarios. The panel affirmed the district court’s ruling as to waiver. Second, the panel rejected Ross’s argument that even if it contractually waived its jury trial right, it was still entitled to rely on Makarios’s jury demand under Rules 38(d) and 39(a). The panel affirmed the district court’s conclusion that Rules 38 and 39 did not apply because Ross had no right to a jury trial by virtue of its waiver in Section 13.04 of its lease. The panel held that typically, the combination of Rules ROSS DRESS FOR LESS V. MAKARIOS-OREGON 5 38(d) and 39(a) prevents a party from unilaterally withdrawing its jury demand, even when no other party has requested a jury trial. Although the right to rely on another party’s jury demand is not unlimited, the exceptions to the Rules did not apply here. The panel resolved the bulk of the issues on appeal in a concurrently filed memorandum disposition.
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