Businesses often include forum selection clauses in contracts, which restrict where the parties to the contract may sue each other. California has a strong public policy in favor of the right to a jury trial. Earlier this week the California Supreme Court held that just because there was no right to a jury trial in the contracted for forum, did not mean that that California courts were prohibited from enforcing a forum selection clause.
Epicentrx, Inc. v. Superior Court, — Cal.5th —, No. S282521 (July 21, 2025) was a shareholder dispute. The corporation’s bylaws and certificate of incorporation required that any suits be brought in the Delaware Court of Chancery, which does not recognize a right to trial by jury. The trial court and the intermediate appellate court both found that the Delaware forum selection clause unenforceable because it violated California’s public policy in favor of the right to a jury trial. The California Supreme Court disagreed.
The Supreme Court explained that the policy in favor of jury trials protects the right to those trials in the California courts, not elsewhere. It also recognized that in arm’s length commercial transactions sophisticated parties may have commercial reasons for choosing a forum which offers fewer protections than do the California courts.
The court went on to hold that the factors which a considered when deciding a forum non conveniens motion (a motion to transfer a case to a more convenient and appropriate jurisdiction) do not apply to the consideration of motions to enforce forum selection clauses.
In reversing the lower courts, the Supreme Court was careful to reaffirm that whether the forum selection clause violates public policy continues to be a valid consideration in determining whether to enforce forum selection clauses. It explained, however, that before determining a provision violates public policy, a court “should be satisfied that the advantage to accrue to the public for so holding is certain and substantial, not theoretical or problematical.”
The California courts have long used the state’s public policy as a means of modifying or bypassing contractual rights. Epicentrx does not change that. It does, however, apply a somewhat more nuanced standard to the application of that policy to contractual terms.
Andrew B. Downs
Bullivant Houser Bailey
Insuralex´s Exclusive Member in California and Washington
