In EpicentRx, Inc. v. Superior Court, the Supreme Court today holds that a contract’s forum selection clause is not invalid just because it requires litigation in a jurisdiction which, unlike California, doesn’t guarantee a right to a jury trial for a dispute.
Stating that “California’s strong public policy [in favor of jury trials] protects the jury trial right in California courts, not elsewhere,” the court’s unanimous opinion by Chief Justice Patricia Guerrero says that “[f]orum selection clauses serve vital commercial purposes and should generally be enforced.” The court reasons, “A foreign business may be reluctant to enter into a transaction with a California business without an enforceable forum selection clause, and the California business would be deprived of the benefit of the transaction, even though it would be willing to agree.”
The court reaffirms that “courts should refuse to enforce a forum selection clause if its enforcement would be contrary to a strong or fundamental public policy of this state,” but concludes that the public-policy exception “does not give courts unbounded discretion to decline to enforce otherwise valid forum selection clauses.”
The court reverses the Fourth District, Division One, Court of Appeal’s published opinion. It also disapproves the First District, Division Three, decision in Handoush v. Lease Finance Group, LLC (2019) 41 Cal.App.5th 729 and the Second District, Division Four, decision in The Comedy Store v. Moss Adams LLP (2024) 106 Cal.App.5th 784. The Supreme Court agreed to hear Handoush, but later dismissed review. (See here and here.) Comedy Store is one of several grant-and-hold cases waiting for today’s opinion. (See here.)
