Whether federal or state law governs the validity of forum-selection clauses

QUESTION PRESENTED Under Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938), federal courts sitting in diversity apply federal procedural law and state substantive law. Eight circuits have held that the validity and enforceability of forum-selection clauses is a procedural question governed by federal law. In the decision below, the Ninth Circuit joined the Seventh Circuit’s minority position and instead held that whether a forum-selection clause is valid is a substantive state-law issue. Thus, the Ninth Circuit refused to enforce a forum-selection clause under California’s ban on forum-selection clauses in employee non-compete agreements. See Cal. Lab. Code § 925. The question presented is: Whether, under E'rie Railroad Co. v. Tompkins, 304 U.S. 64 (1938), federal courts sitting in diversity should apply federal or state law to determine the validity of forum-selection clauses. (1)