Many Delaware-incorporated companies include provisions in their corporate charters or bylaws requiring that stockholder lawsuits be brought in Delaware’s Court of Chancery - a court that decides cases before a judge, with no jury. This creates a tension with California law, which strongly guarantees the right to a jury trial and has a broad “long arm” statute that can pull disputes into California courts even when a company has chosen a different forum. A minority stockholder who was a California resident sued EpicentRX (a Delaware corporation) in California court. The lower courts refused to enforce the Delaware forum selection clause, reasoning that sending the case to Delaware would effectively strip the plaintiff of her California jury trial rights. The California Supreme Court reversed, holding that a forum selection clause is not unenforceable simply because it requires parties to litigate in a jurisdiction that does not provide the same jury trial right as California. The court reasoned that California’s strong public policy favoring jury trials applies to proceedings in California courts, not to courts in other states. It further reasoned that a forum selection clause determines where a dispute is litigated, not how, so it does not constitute a prohibited waiver of jury trial rights. The decision aligns California with the majority of states that enforce Delaware forum selection clauses, reinforcing the ability of Delaware-incorporated companies to channel stockholder disputes to Delaware’s specialized corporate court.
