Forum-Selection Clauses Are Not Void Simply Because the Chosen Forum Lacks Civil Jury Trials: EpicentRx, Inc. v. Superior Court (Cal. 2025)

Introduction

In EpicentRx, Inc. v. Superior Court, the California Supreme Court resolved a contested and increasingly consequential issue at the intersection of California’s strong jury-trial policy and the modern law favoring enforcement of forum-selection clauses. The Court held that a forum-selection clause is not unenforceable merely because the designated forum does not provide a right to a civil jury trial comparable to that available in California. Rejecting a contrary rule adopted by several Courts of Appeal, the Court disapproved Handoush v. Lease Finance Group, LLC and clarified that California’s constitutional jury-trial protections speak to litigation in California courts; they do not control the procedural regimes of other forums.

The decision has immediate implications for corporate governance and commercial contracting—particularly where charters, bylaws, or contracts designate the Delaware Court of Chancery, foreign courts, or other nonjury forums. While the Court reaffirmed a public policy exception to forum-selection enforcement, it narrowed its scope: a mere difference in jury-trial availability is not, standing alone, a California public-policy basis to refuse enforcement. The Court remanded for the Court of Appeal to address the plaintiff’s other objections to enforcement, including arguments about when and how the forum clause was adopted and whether it applies to the pleaded claims.

Background and Parties

Plaintiff EpiRx, L.P., a minority stockholder in EpicentRx, Inc. (a Delaware corporation with its principal place of business in California), sued the company, its controlling stockholder (InterWest Partners, L.P.), and various individuals in San Diego Superior Court. The operative complaint alleged fraud and related misconduct in capital raising, corporate governance disputes, and the company’s refusal to provide board-level information—claims framed as breach of contract, fraudulent concealment, promissory fraud, breach of fiduciary duty, and unfair business practices. Plaintiff sought rescission of its $5 million investment, damages, punitive damages, and fees.

Defendants moved to dismiss on forum non conveniens grounds, invoking mandatory forum-selection clauses in the corporation’s Delaware certificate of incorporation and bylaws requiring that specified stockholder disputes be brought exclusively in the Delaware Court of Chancery. The trial court denied the motion, and the Court of Appeal denied writ relief, holding the clauses unenforceable because the Delaware Court of Chancery does not provide a civil jury right comparable to California’s. The Supreme Court granted review.

Summary of the Opinion

• The Supreme Court reversed, holding that a forum-selection clause is not unenforceable on California public-policy grounds merely because the chosen forum lacks a civil jury-trial right comparable to California’s. California’s jury-trial policy protects jury trials in California courts; it is not an extraterritorial policy mandating that other forums provide juries.
• The Court reaffirmed the general enforceability of forum-selection clauses (Smith v. Superior Court; The Bremen; Atlantic Marine) and acknowledged a narrow public-policy exception. But it clarified that the jury-trial difference, without more, is not a basis to refuse enforcement.
• The Court disapproved Handoush v. Lease Finance Group, LLC and The Comedy Store v. Moss Adams LLP (to the extent inconsistent), which had treated the lack of a jury-trial right in the selected forum as a basis to shift burdens or invalidate clauses.
• The case is remanded because the Court of Appeal treated the jury issue as dispositive and did not reach other arguments (e.g., the clause’s adoption, scope, and potential other grounds for unenforceability).

Analysis

Precedents and Authorities Cited

The Court’s analysis situates forum-selection enforcement within established California and federal frameworks:

• Smith v. Superior Court (1976) 17 Cal.3d 491: Foundational California authority recognizing the validity of forum-selection clauses and the policy favoring their enforcement absent unreasonableness. The Court again embraced Smith’s modernization of California contract and jurisdiction doctrine, including its emphasis on predictable commercial planning.
• The Bremen v. Zapata Off-Shore Co. (1972) 407 U.S. 1: U.S. Supreme Court cornerstone endorsing enforcement of freely negotiated forum-selection clauses unless enforcement would be unreasonable or contravene a strong public policy of the forum. EpicentRx reaffirms The Bremen’s principles as consistent with California law.
• Atlantic Marine Construction Co. v. U.S. District Court (2013) 571 U.S. 49: Emphasizes that enforcing valid forum-selection clauses protects parties’ expectations and serves the interests of justice; courts should generally hold parties to their bargain.
• Stangvik v. Shiley Inc. (1991) 54 Cal.3d 744 and Guimei v. General Electric Co. (2009) 172 Cal.App.4th 689: Provide the forum non conveniens framework when no forum clause is present. Critically, Stangvik holds that less favorable law (including the lack of a jury right) in the alternative forum does not alone render that forum unsuitable if a meaningful remedy exists.
• Grafton Partners v. Superior Court (2005) 36 Cal.4th 944: Holds that predispute civil jury waivers are not enforceable in California courts absent statutory authorization, grounding jury protection as part of California’s procedural scheme (Cal. Const., art. I, § 16; Code Civ. Proc., § 631).
• Rincon EV Realty LLC v. CP III Rincon Towers, Inc. (2017) 8 Cal.App.5th 1: Explains that California’s jury-trial protections are “for litigants in the California courts” and do not travel extraterritorially.
• Intershop Communications AG v. Superior Court (2002) 104 Cal.App.4th 191: Recognizes the public-policy exception to enforcement of forum clauses; also illustrates the practical sense of foreign forum selection in international or foreign corporate contexts.
• Wimsatt v. Beverly Hills Weight (1995) 32 Cal.App.4th 1511; America Online, Inc. v. Superior Court (2001) 90 Cal.App.4th 1; Verdugo v. Alliantgroup, L.P. (2015) 237 Cal.App.4th 141: Develop burden-shifting in cases where enforcement would undermine unwaivable California statutory rights (e.g., FIL, CLRA, Labor Code). The Court did not question these decisions in the abstract but distinguished the jury-trial right as procedural and non-extraterritorial.
• County of Orange (9th Cir. 2015) 784 F.3d 520 (Erie context): Recognizes California’s rule against predispute jury waivers in California courts but underscores the procedural character of the jury trial issue and the forum’s primacy in procedural matters.
• Statutory policies limiting forum-selection in defined contexts (e.g., Bus. & Prof. Code § 20040.5; UCC § 10106(b); Code Civ. Proc. §§ 410.42, 116.225; Ins. Code § 10138(a)(9); Lab. Code § 925; Lab. Code § 432.6) demonstrate that when California wishes to carve out a categorical forum-protection regime, it does so expressly. No analogous statute extends California’s jury-trial policy to non-California forums.

Legal Reasoning

The Court’s reasoning proceeds in three steps:

1. Reaffirmation of the general rule favoring enforcement. Forum-selection clauses “serve vital commercial purposes and should generally be enforced.” Mere inconvenience or additional expense is not enough to defeat enforcement. The resisting party bears a “substantial” burden to show unreasonableness unless a recognized exception applies.
2. Public policy exception exists but is narrow. The Court confirms courts may refuse to enforce forum clauses if doing so would contravene a strong or fundamental California policy, whether declared by statute or judicial decision. At the same time, displacing freedom of contract on policy grounds is a “delicate” power to be exercised sparingly and typically in the presence of a clearly articulated legislative or constitutional directive.
3. California’s jury-trial policy protects jury trials in California courts, not elsewhere. The California Constitution and Code of Civil Procedure section 631 establish a procedural framework for jury trials “in this forum.” They do not purport to regulate how other jurisdictions structure their civil adjudication or require foreign forums to provide juries. A forum-selection clause chooses “where” disputes will be litigated; it is not equivalent to a predispute contractual waiver purporting to dictate “how” they will be tried within California. Accordingly, the lack of a jury-trial right in the selected forum is not itself a California public-policy basis to invalidate the clause.

From these premises, the Court held that the Court of Appeal erred by using California’s jury-trial policy to defeat the forum clause and by shifting the burden to defendants to prove plaintiff’s jury right would not be diminished in Delaware Chancery. That burden-shifting framework applies when unwaivable substantive California statutory rights are at risk (e.g., FIL, CLRA, Labor Code) and is inapposite to the procedural jury-trial guarantee designed for California courts. The Court therefore disapproved Handoush and The Comedy Store to the extent they embraced that approach for jury rights.

Importantly, the Court did not foreclose that the extent of jury-trial availability could be relevant in other ways or in combination with other considerations. It simply held that the difference in jury-trial availability, standing alone, is not a public-policy basis to refuse enforcement.

Issues Reserved and Remanded

• Adoption and assent: Plaintiff argued the forum clause was added to the certificate and bylaws after the alleged misconduct and without its consent. The lower courts did not reach whether the clause was “freely and voluntarily negotiated at arm’s length” or otherwise enforceable as a matter of corporate law and equity. The Supreme Court left these questions for remand (noting Drulias v. 1st Century Bancshares, Inc., which dealt with similar issues).
• Scope of the clause: The certificate clause is broad (derivative claims, fiduciary-duty claims, DGCL/certificate/bylaws claims, and internal-affairs doctrine claims). Whether each pleaded claim (e.g., fraud and contract claims) is covered remains to be resolved on remand.
• Internal affairs doctrine: Defendants argued Delaware law governs the enforceability of the clause under the internal affairs doctrine. The Court did not decide this and proceeded on California law for the public-policy analysis presented. The Court of Appeal may consider conflict-of-laws questions on remand as necessary.
• Other defenses to enforcement: Unreasonableness, overreaching, lack of a rational basis, serious inconvenience, or statutory prohibitions could still defeat enforcement depending on the facts and governing law. None of these were reached because the lower courts treated the jury issue as dispositive.

Impact

The decision has significant ramifications across several domains:

• Corporate governance and Delaware forum clauses: California courts will generally enforce Delaware Chancery forum provisions in certificates and bylaws despite the absence of a Chancery jury right. This promotes predictability in stockholder litigation and aligns California with national corporate practice.
• Cross-border and international contracting: Parties selecting non-U.S. courts (which often lack civil juries) can rely on California courts to respect the clause absent some other recognized defense. This reduces forum-shopping and the risk that California becomes a magnet for disputes based solely on jury availability.
• Litigation strategy: Plaintiffs can no longer avoid an otherwise valid forum clause by invoking California’s jury policy. They must instead focus on classic defenses (scope, assent, overreaching, unfairness, statutory carveouts) or show a different, clearly articulated California policy would be contravened.
• Doctrinal clarification: The Court draws a clean line between procedural jury rights in California courts and the substantive statutory-rights cases that justify burden-shifting (Wimsatt/America Online/Verdugo). It also underscores that when the Legislature intends to bar forum clauses in particular relationships (franchise, consumer leases, certain employment contracts, etc.), it says so expressly.
• Precedent reset: Handoush is disapproved, as is The Comedy Store to the extent inconsistent. Lower-court decisions relying on Handoush’s burden shift for jury-trial differences are effectively abrogated.

Complex Concepts Simplified

• Forum non conveniens: A doctrine allowing a court to decline jurisdiction if another forum is substantially more appropriate. Without a forum clause, courts weigh private and public interest factors. With a forum clause, the resisting party has a heavy burden to show unreasonableness.
• Forum-selection clause: A contract term identifying the court or jurisdiction where disputes must be litigated. “Mandatory” clauses require suit only in the named forum. Courts generally enforce them unless enforcement would be unreasonable or contravene a strong forum policy.
• Public-policy exception: A narrow safety valve: even valid contracts will not be enforced if doing so would violate a strong or fundamental policy of the forum, typically evidenced by constitutional text, statute, or clear judicial doctrine.
• Predispute jury waiver vs. forum selection: A predispute jury waiver dictates “how” a case will be tried in the forum (jury versus bench) and is not enforceable in California courts absent statutory authorization (Grafton). A forum-selection clause dictates “where” a case will be heard. EpicentRx holds that the latter is not invalid just because the chosen forum does not offer civil juries.
• Internal affairs doctrine: A conflict-of-laws principle that the state of incorporation’s law governs internal corporate matters (relationships among the corporation, directors, officers, and stockholders). It often supports Delaware law governing disputes involving Delaware corporations.
• Substantive vs. procedural rights: Substantive rights define legal entitlements and remedies (e.g., wage rights under the Labor Code). Procedural rights govern how cases are tried (e.g., jury availability in the forum). California’s jury rule is procedural and designed for California courts.

Practical Takeaways

• Drafting and governance: Corporate counsel should continue to include mandatory Delaware forum provisions for “internal corporate claims” in charters and bylaws, ensuring proper adoption and notice. Include severability and consider complementary choice-of-law provisions.
• Enforcement strategy: Defendants seeking to enforce a forum clause should focus on the clause’s scope, the parties’ sophistication, the commercial rationale, and the absence of statutory prohibitions. Plaintiffs opposing enforcement must develop record-based arguments about assent, overreaching, timing of adoption, or that claims fall outside the clause.
• Do not rely on jury-trial differences: After EpicentRx, invoking California’s civil jury-trial policy is not, by itself, a winning ground to evade a forum clause.
• Watch for statutory carveouts: In franchise, certain employment, consumer leasing, construction subcontracting, and other legislatively protected settings, California law may bar out-of-state forum provisions. Identify and plead those statutes early.
• Consider Delaware procedural pathways: While not decided here, defendants may note that the Delaware Chancery Court can, in certain circumstances, send legal claims to the Delaware Superior Court where a jury may be available or use advisory juries—though arguments must be properly preserved.

Conclusion

EpicentRx, Inc. v. Superior Court establishes a clear and commercially significant rule: a forum-selection clause does not violate California public policy merely because the chosen forum lacks a civil jury-trial right equivalent to California’s. The decision harmonizes California with the modern current of contract law favoring enforcement of negotiated forum provisions (Smith, The Bremen, Atlantic Marine) and limits the public-policy exception to circumstances where a strong, clearly articulated California policy would truly be contravened. In the same breath, the Court preserves robust jury protections in California courts and leaves intact the separate burden-shifting framework for forum clauses that threaten unwaivable substantive California statutory rights (Wimsatt, America Online, Verdugo).

By disapproving Handoush and rejecting an expansive jury-based public-policy veto, the Court reduces forum-shopping based on jury availability and restores predictability to corporate and cross-border contracting. On remand, the case will turn to classic forum-selection questions—assent, scope, timing, internal-affairs considerations, and any statutory carveouts—now that the jury-right objection is off the table. The ruling thus reinforces freedom of contract while cabining the public-policy exception to its intended, targeted role in California jurisprudence.