California Supreme Court Narrows Grounds for Non-Enforcement of Foreign Forum Selection Clauses

On July 21, 2025, the California Supreme Court issued its first opinion in many years addressing the enforceability of a forum selection clause. In EpicentRx v. Superior Court, it held that the fact that the court named in the clause did not allow for jury trials was not a valid basis for declining to enforce it under California law.

Most of the online commentary about EpicentRx has focused on how this decision will affect forum selection clauses choosing the Delaware Court of Chancery. The decision will, however, also have an impact on clauses choosing a different set of courts for which jury trials are typically not available: foreign courts.

Background

The California Supreme Court has long held as a matter of state common law that forum selection clauses are presumptively valid. The resisting party bears the burden of showing that a clause should not be given effect because (1) enforcement would be unreasonable, or (2) enforcement is contrary to California public policy.

State laws invalidating clauses on public policy grounds may be usefully sorted into two categories. First, some laws prohibit the enforcement of outbound forum selection clauses (i.e., clauses pointing to courts outside of California) in certain types of contracts. These laws serve to invalidate clauses that are written into franchise agreements, child support contracts, construction contracts, and consumer contracts, among others. Second, some laws provide that clauses shall not be given effect when enforcement will ultimately result in the waiver of non-waivable rights conferred by California state law. If California law confers special, non-waivable rights on franchisees, for example, and if a California court believes that the chosen court will apply the less protective franchise law of another jurisdiction, then the California court may decline to enforce the clause because litigating in the chosen jurisdiction will result in the waiver of non-waivable rights.

The laws that confer non-waivable rights may be further divided into two types. Some of these laws contain express anti-waiver language. The California Labor Code, for example, states that “no provision of this article can in any way be contravened or set aside by a private agreement, whether written, oral, or implied.” This language makes crystal clear that the rights conferred by the Labor Code are non-waivable. On the other hand, some of these laws contain ambiguous anti-waiver language. The California Constitution, for example, provides that the right to trial by jury is “inviolate” and may only be waived “by the consent of the parties as prescribed by statute.” This language does not state in clear and unambiguous terms that the right to a jury trial is non-waivable.

EpicentRx

The California Supreme Court’s decision in EpicentRx contains a lengthy discussion of each of the public policy rationales discussed above. To understand how that case did—and did not—change the law in California with respect to the enforceability of forum selection clause, let us consider each of these categories in turn.

Type of Contract

The court discussed at some length statutes that void outbound forum selection clauses when they appear in certain types of contracts. It referenced statutes that invalidate such clauses in franchise agreements, consumer leases, construction contracts, goods and services under small claims court jurisdiction, structured settlement transfer agreements, and employment agreements.

The court made clear that none of these statutes are in any way affected by the ruling in EpicentRx. Forum selection clauses continue to be unenforceable as a matter of California public policy when they appear in a contract that is subject to one of these statutes.

Express Anti-Waiver Language

The court also discussed a series of lower court cases invalidating clauses on the basis of express anti-waiver language.

In Wimsatt v. Beverly Hills Weight Loss Clinics International, Inc. (1995), for example, the California Court of Appeal invoked express anti-waiver language in the California Franchise Investment Law to explain its decision not to enforce a Virginia forum selection clause. If the clause was enforced, the court reasoned, it was possible that the litigation would proceed in a “forum in which there is no guaranty that California’s franchise laws will be applied to a franchisee’s claims.” In America Online, Inc. v. Superior Court (2001), the California Court of Appeals pointed to express anti-waiver language in the California Consumers Legal Remedies Act (CLRA) to explain its decision not to enforce a Virginia forum selection clause. The court specifically observed that Virginia’s scheme for consumer protection was far less favorable to plaintiffs than the CLRA. And in Verdugo v. Alliantgroup, L.P. (2015), the California Court of Appeals held that a Texas forum selection clause was unenforceable because all of the plaintiff’s claims were based on her statutory rights under the California Labor Code, the provisions in the Labor Code are non-waivable, and the relevant Texas law conferred fewer protections.

In a footnote at the end of its decision in EpicentRx, the California Supreme Court announced that it was not expressing any opinion on “the merits of Wimsatt, America Online, Verdugo, or similar cases involving potentially unwaivable substantive rights.” The rule laid down in these cases is therefore not affected by the new ruling. When a statute contains express anti-waiver language, the state and federal courts in California may continue to invalidate outbound forum selection clauses in cases where they believe the chosen court will apply a law that is less protective than the law of California.

Ambiguous Anti-Waiver Language

The real significance of the decision in EpicentRx lies in its impact on cases where the statutory language purporting to establish a non-waivable right is ambiguous.

The question before the court was whether California law required that state’s courts to invalidate forum selection clauses when they choose a forum that does not allow jury trials. The lower courts had held that this result was mandated by language in the California Constitution stating that the right to trial by jury is “inviolate” and may only be waived “by the consent of the parties as prescribed by statute.” The California Supreme Court disagreed. It held that this language—in contrast to the express anti-waiver language at issue in Wimsatt, America Online, Verdugo—did not clearly establish that the right to a jury trial was not waivable via a forum selection clause. In its words:

[T]he statutory provisions at issue in these prior cases are unlike the provisions governing a party’s right to a civil jury trial . . . These [jury trial] provisions do not purport to void jury trial waivers that do not conform to the statute or to prohibit parties from agreeing to them. They simply state that such waivers will not be enforced in California. The limitations on waiver are limitations on courts operating in this forum. They do not announce a public policy against predispute jury trial waivers writ large, untethered to their enforcement in a California forum. While California courts cannot recognize a predispute jury trial waiver as valid, neither the Constitution nor the relevant statutes declare all such waivers void. (emphasis added)

The California Supreme Court, in short, interpreted the relevant language as a procedural right that was only triggered when the merits of a dispute were being tried in a California court. It did not interpret that language as bearing on enforceability of forum selection clauses choosing courts in other jurisdictions. It concluded that:

California has a strong public policy in favor of the right to a jury trial and against predispute waivers of that right. But California does not have a strong public policy against forum selection clauses or agreements to litigate in a jurisdiction that does not recognize the same civil jury trial right. The considerations surrounding each policy are distinct, and one does not necessarily follow from the other.

In the absence of express language in the California Constitution or a California statute stating that the right to a jury trial was non-waivable, the court declined to hold that a forum selection clause choosing a court where no jury trial was available was contrary to California public policy.

Implications

The EpricentRx decision has significant implications for transnational litigation. Jury trials are a rarity outside the United States. If the court had held that any forum selection clause choosing a court where jury trial was unavailable was contrary to California public policy, then this decision would have resulted in the invalidation of most forum selection clauses choosing courts in other countries. I suspect that many foreign companies doing business with California counterparties breathed a sigh of relief the day after the decision came down. Indeed, the California Court of Appeal has already cited EpicentRx in a case upholding the enforceability of a forum selection clause choosing the courts of Sweden against a challenge that Sweden does not permit jury trials.

It is important to recognize, however, the relatively narrow scope of this particular decision. The state and federal courts in California will continue to disregard forum selection clauses when they are written into those contracts covered by an invalidating statute. They will also continue to set aside these clauses when the rights asserted are expressly non-waivable and they believe that the chosen court will apply a less protective law. The primary impact of the decision, it seems to me, will be to discourage state court judges from relying on ambiguous statutory language to invalidate forum selection clauses on anti-waiver grounds.