concurring:
Today we hold that district courts have diversity jurisdiction over appeals from state administrative agency decisions when state law places such appeals in state trial courts and, of course, when the familiar citizenship and amount in controversy requirements are fulfilled. Our holding will necessarily require federal courts of original jurisdiction to sit in an appellate capacity to deferentially review state administrative action. These cross-system appeals have been foreclosed from district court dockets for nearly 12 years under Shamrock Motors, Inc. v. Ford Motor Co., 120 F.3d 196 (9th Cir.1997), in part because we thought cross-system appeals were bad policy on the basis of well settled principles of federalism. See id. at 200. Although it is a close call, I join my colleagues, both of whom participated in deciding Shamrock, in holding that City of Chicago v. International College of Surgeons, 522 U.S. 156, 118 S.Ct. 523, 139 L.Ed.2d 525 (1997), “effectively overruled” Shamrock. See Miller v. Gammie, 335 *792F.3d 889, 900 (9th Cir.2003) (en banc). It is a close call both because the City of Chicago majority explicitly stated that it was not deciding the question we decide today and because City of Chicago’s reading of the jurisdictional statutes did nothing to undermine the principles of federalism Judge Fernandez articulated in Shamrock. If anything, City of Chicago reinforced those policy concerns. I am therefore not convinced, as my colleagues are, that Shamrock was “just plain wrong,” Op. at 790. I write separately to explain why.
In Shamrock, we joined the majority of circuits in holding that district courts lack original jurisdiction over cross-system, on-the-record appeals from state agency decisions because such appeals are not “civil actions” under the diversity and removal jurisdiction statutes. See Shamrock, 120 F.3d at 199. We read the civil action requirement to exclude on-the-record review, but not de novo review, because we thought it clear that the states were forbidden from converting federal district courts into administrative appellate tribunals. See Chicago, R.I. & P.R Co. v. Stude, 346 U.S. 574, 581, 74 S.Ct. 290, 98 L.Ed. 317 (1954). O’Dea has made a color-able argument that Shamrock’s holding with respect to diversity jurisdiction survives City of Chicago, because there the Supreme Court explicitly and repeatedly limited its holding to the supplemental jurisdiction scenario presented in that case.1 In fact, the Court denied that original jurisdiction over cross-system appeals was even relevant to supplemental jurisdiction:
Because this is a federal question case, the relevant inquiry is not, as [respondent] submits, whether its state claims for on-the-record review of the Commission’s decisions are “civil actions” within the “original jurisdiction” of a district court: The District Court’s original jurisdiction derives from [respondent’s federal claims, not its state law claims.
City of Chicago, 522 U.S. at 166, 118 S.Ct. 523. Thus, the Court declined to answer the question “whether those same [state] claims, if brought alone, would substantiate the district court’s ‘original’ jurisdiction over diversity cases under § 1332.” Id. at 172, 118 S.Ct. 523. Shamrock had answered that exact question with a firm “no,” and we cannot lightly ignore it as binding authority. Yet, as today’s opinion explains, Shamrock primarily depended on a reading of Stude, 346 U.S. at 581, 74 S.Ct. 290, and Horton v. Liberty Mutual Insurance Co., 367 U.S. 348, 354-55, 81 S.Ct. 1570, 6 L.Ed.2d 890 (1961), that the Supreme Court disavowed in City of Chicago. After City of Chicago, we cannot hold that the standard of review dictated by state law in a cross-system appeal determines whether that cross-system appeal is a “civil action” under the diversity jurisdiction statute. See Miller, 335 F.3d at 900 (“[I]ssues decided by the higher court need not be identical in order to be controlling.”).
This case is a close one, however, because Shamrock did not rest exclusively on the distinction between de novo and on-the-record review that City of Chicago rejected. Judge Fernandez’s Shamrock opinion also articulated a compelling policy reason to read the diversity jurisdiction statute to exclude cross-system appeals. “[T]he prospect of a federal court sitting *793as an appellate court over state administrative proceedings is rather jarring and should not be quickly embraced as a matter of policy.” Shamrock, 120 F.3d at 200. This sound statement of a principle of federalism is no less true after City of Chicago; as explained below, I believe the City of Chicago majority, in its response to the dissent, actually reaffirmed the policy argument driving Shamrock.
Justice Ginsburg, joined by Justice Stevens, dissented from the Court’s opinion in City of Chicago in part because of her concern that the Court was precipitously reallocating power from state courts to federal courts, without much indication from Congress that it intended such an expansion of federal power. See City of Chicago, 522 U.S. at 177, 118 S.Ct. 523(Ginsburg, J., dissenting). Absent a clear congressional statement, the dissent thought it unwise for federalism reasons to open district courts to “appeals from the actions of all manner of local (county and municipal) agencies, boards, and commissions.” Id. at 175, 118 S.Ct. 523 (Ginsburg, J., dissenting). Like Shamrock, the City of Chicago dissent feared that district courts would be required to encroach on state court prerogative by “directly superintend[ing] local agencies.” Id. (Ginsburg, J., dissenting). In response, the majority implicitly validated the dissent’s protests in two ways, thus reaffirming Shamrock’s policy argument. First, the majority reiterated the narrowness of its supplemental jurisdiction holding, distancing itself from “the dissent’s repeated assumption that the jurisdictional analysis of diversity cases would be no different.” Id. at 172, 118 S.Ct. 523(citations omitted). This suggests that lower courts might properly find that diversity cases are different. There are good reasons that diversity cases should be different, the most obvious of which is the expansion of federal court authority foretold by the City of Chicago dissent.2 Second, the majority encouraged district courts to consider the Court’s abstention doctrines when presented with a problematic cross-system appeal. The majority therefore must have agreed that cross-system appeals would at times invite an inappropriate exercise of federal jurisdiction. Otherwise the Court would have had no reason to “note that there may be situations in which a district court should abstain from reviewing local administrative determinations even if the jurisdictional prerequisites are otherwise satisfied.” Id. at 174, 118 S.Ct. 523. In sum, the majority never suggested the dissent’s federalism concerns were misplaced, only that they were significantly mitigated by the majority’s narrow holding and the applicability of abstention to future cross-system appeals. Accordingly, were it not for the Court’s clarification of Stude and Horton, we would have good reason to follow the rule of Shamrock for diversity cases until the Supreme Court tells us otherwise.
We can only speculate whether today’s holding will result in a deluge of cross-system appeals, or whether BNSF is correct that such concerns are overblown. Given these concerns, however, I join my colleagues in urging the district court to decide in the first instance whether any abstention doctrine applies. I am also mindful of the two parallel state court *794actions these same parties are currently litigating. If these state court proceedings conclude on the merits before the district court decides this case, ordinary principles of res judicata might dictate whether the district court can or should decide this cross-system appeal. Careful consideration of these and perhaps other limitations on federal jurisdiction might help the district court proceed with caution, lest it “jeopardize the ‘strong interest’ courts of the State have in controlling the actions of local as well as state agencies.” City of Chicago, 522 U.S. at 185, 118 S.Ct. 523 (Ginsburg, J., dissenting).
. The Fourth Circuit has adopted a narrow reading of City of Chicago like the narrow reading O’Dea urges here. See Kirkpatrick v. Lenoir County Bd. of Educ., 216 F.3d 380, 387 n. 6 (4th Cir.2000) (noting that City of Chicago affirmed only “supplemental jurisdiction over state claims that call for deferential on-the-record review of state administrative findings when the district court already possesses original jurisdiction over another claim”).
. Further, the diversity statute, unlike the supplemental jurisdiction statute, does not afford district courts the discretion to decline jurisdiction over state law claims. Compare 28 U.S.C. § 1332 with 28 U.S.C. § 1367(c). District courts sitting in diversity therefore lack the option of refusing state law claims out of consideration for “judicial economy, convenience, fairness, and comity.” City of Chicago, 522 U.S. at 173, 118 S.Ct. 523 (quotation marks omitted).