Every lawyer knows that Erie Railroad v. Tompkins, 304 U.S. 64, 78 (1938), held that there is no general federal common law and that federal courts exercising diversity jurisdiction must apply applicable substantive state law. But how does a federal court apply state law when faced with a state-law issue of first impression?

One approach, of course, is simply to abstain and wait for a state court determination of the issue. But abstention can be an unsatisfying and awkward solution that causes delay, expense and inconvenience to courts and litigants.

Another option is for a federal court to hazard a guess — based on dicta and “obvious implications and inferences” in state precedent and any other available sources of law (e.g., treatises, law reviews, restatements) that might help ascertain how a state court might rule. Food Industries Research & Engineering Inc. v. State of Alaska, 507 F.2d 865 (9th Cir. 1974) (court makes an “Erie‑educated guess” on questions of state law); Yoder v. Nu‑Enamel Corp., 117 F.2d 488 (8th Cir. 1941).

This, too, however, is a somewhat awkward solution. Requiring federal judges to divine the rule a highest state court might adopt is by no means an exact science.

In 1945, the state of Florida devised another approach: allowing federal appellate courts to certify questions of state law to the Florida Supreme Court. Florida Appellate Rule 9‑150. This idea did not catch on immediately: It took 15 years before a court — the U.S. Supreme Court, in fact — actually used the statute. Clay v. Sun Insurance Office Ltd., 363 U.S. 207 (1960) (complimenting Florida’s “rare foresight” in creating a certification rule).

Despite this slow start, federal judges eventually endorsed certification because it enabled them — without abdicating their responsibility — to obtain an authoritative answer “to problems where the Erie lights are dim, confusing, or conflicting.” Strange v. Krebs, 658 F.2d 268 (5th Cir. Unit A Sept. 1981) (extolling the virtues of the “remarkable device” of certification); American E. Development Corp. v. Everglades Marina, 608 F.2d 123 (5th Cir. 1979) (“both federal and state judicial systems are the beneficiaries of a procedure rooted in cooperative federalism”).

Momentum for certification built slowly: In 1971, only seven states had a certification procedure; by 1976, that number was only 15. But in 1977, the American Bar Association urged adoption of certification, and by 1997, the number of states with certification procedures had risen to 44. These states included every state within the 9th Circuit — except California.

Two years ago, however, California joined its sister 9th Circuit states by becoming the 45th state nationwide to adopt a rule allowing certification of questions of state law. Effective Jan. 1, 1998, California Rule of Court 29.5 created a process whereby sister state courts of last resort and federal appellate courts could certify unresolved questions of California law to the California Supreme Court.

Under Rule 29.5, the California Supreme Court exercises its discretion in accepting certified questions. When it agrees to answer certified questions, the resulting opinion carries the precedential weight of any other high‑court decision. Rule 29.5(k). Although new, Rule 29.5 already has had one substantive amendment. Effective Jan. 1, parties may support or oppose certification requests by filing briefs in the California Supreme Court.

During Rule 29.5’s short life span, neither the U.S. Supreme Court nor any sister state high court has certified a question. Twelve of the 13 federal appellate courts also have made no use of the rule. The 9th U.S. Circuit Court of Appeals is the exception.

The 9th Circuit has certified questions to the California Supreme Court six times and the Supreme Court has declined only one of its requests.

Although there is no time limit within which the court must respond to a certification request, the California Supreme Court generally has done so within the 90‑day time frame for appellate decisions. So far, the court has taken an average of 83 days from the date of certification to issue an order either granting or denying the request (with 137 and 44 days as the longest and shortest periods for a ruling).

The fact that the California Supreme Court has accepted certification five of the six times the 9th Circuit has asked bodes well for certification. Litigants should appreciate, however, that the 9th Circuit itself will not jump on the certification bandwagon any time a party suggests it. In at least two cases, the court has expressly noted its denial of a party’s certification request. Cucamongans United v. City of Rancho Cucamonga (2000); Ashmus v. Woodford, 202 F.3d 1160 (9th Cir. 2000).

So far, the 9th Circuit has sought substantive guidance on California law by certifying questions in three areas: constitutional law (twice), insurance law (three times) and employment law (once).

The very first question certified to the high court implicated state constitutional concerns. The 9th Circuit asked whether a city’s ban on aggressive panhandling violated the California Constitution’s liberty of speech clause. L.A. Alliance for Survival v. City of Los Angeles, 157 F.3d 1162 (9th Cir. 1998). The court certified this question after noting conflicting views among California cases and also among federal district courts attempting to apply California law.

The California Supreme Court accepted the request but rephrased its precise wording to avoid unnecessarily restricting its analysis — a procedure allowed by Rule 29.5(g). The court then waited to receive written notice from the 9th Circuit that it had no objection to the rephrasing of the question.

Then, this March, the California Supreme Court answered the question, issuing an opinion upholding the law’s constitutionality. L.A. Alliance for Survival v. City of Los Angeles, 22 Cal.4th 352 (2000). Because this was the first time the court had ever accepted a certified question, a portion of the majority opinion briefly discussed certification, approving the way the procedure “strengthens the primacy of the state supreme court in interpreting state law” and “protects the sovereignty of state courts.”

The 9th Circuit also sought guidance interpreting California’s constitution in Ventura Group Ventures Inc. v. Ventura Port District, 179 F.3d 840 (9th Cir. 1999), where it certified two questions concerning the interplay of Article XIII A of the California Constitution and statutory writ of mandate provisions.

In the insurance context, the first certified case was Vu v. Prudential Property & Casualty Insurance Co., 172 F.3d 725 (9th Cir. 1998), involving a statute‑of‑limitations issue tied to earthquake damage claims.

Interestingly, the court certified this question on its own motion without urging from either party and noted, “if the court declines to accept the certified question, we will resolve the issue according to our own understanding of California law, misguided though it be.”

Another insurance case, Blue Ridge Insurance Co. v. Jacobsen, 197 F.3d 1008 (9th Cir. 1999), asks whether an insurer defending under a reservation of rights may recover settlement payments made over the insured’s objection if no coverage is ultimately found.

The insurance arena also represents the one instance in which the California Supreme Court declined to accept certification. In In re KF Dairies Inc., 179 F.3d 1226 (9th Cir. 1999), the 9th Circuit certified a question regarding insurance coverage for groundwater contamination. The California Supreme Court denied certification without explanation.

The 9th Circuit also certified a question involving an employment contract: whether an employer may unilaterally rescind a policy providing continued employment under specified conditions. Asmus v. Pacific Bell, 159 F.3d 422 (9th Cir. 1998). After rephrasing the question slightly, the California Supreme Court answered it affirmatively. Asmus v. Pacific Bell (June 1, 2000).

Federal district courts — on the front lines of applying state law — are notably excluded from courts eligible to certify questions under Rule 29.5. Several district courts have lamented their inability to use the rule, noting they would have certified questions if permitted.

However, at least one California Supreme Court justice has suggested that the constitutionality of certification remains an open question. In L.A. Alliance, a concurring opinion observed that the issue had not yet been directly addressed.

While certification might once have seemed uncertain given the California Supreme Court’s workload, the court has shown a willingness to use the procedure and has not hesitated to grant requests when appropriate.

The message for practitioners is clear: counsel in 9th Circuit appeals should evaluate whether certifying a question of California law would be determinative in resolving their cases.

As its short history suggests, Rule 29.5 is particularly useful when addressing novel questions where there is conflict in published authority or a recurring issue requiring guidance.

If certification appears appropriate, counsel should raise the issue in a motion for certification. Such a motion should include a clearly stated question, relevant facts, an explanation of why existing precedent is insufficient, and an analysis of why the answer would be determinative.

Reprinted with permission from Daily Journal.