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October 20, 23

NEWS / Court: Company's Forum Selection Clause May Violate Constitutional Right to Jury Trial


In a legal showdown, the Fourth District Court of Appeal delivered a verdict that could reshape how corporations handle disputes. On September 21, 2023, the gavel came down in EPICENTERx, Inc. v. Superior Court, Case No. D081670, and the implications are worth noting.

What Went Down?

Picture this: a minority shareholder takes a corporation and its brass to court. The charges include everything from deceptive cloak-and-dagger tactics to lies that shattered contractual promises. The stage was set for a legal brawl, and one element was non-negotiable—the plaintiff's right to a jury trial.

Constitutional Showdown

But here's where it gets spicy. The Delaware Court of Chancery, where the case was originally being played out in accordance with the forum selection clause found in the company’s corporate documents, usually does not conduct jury trials. The Court of Appeal couldn't resist a touch of humor, likening the presence of a jury in Chancery to finding an appendix in your body—interesting but not particularly useful.

The Verdict

In a groundbreaking decision, the Court ruled that a corporation's attempt to stick to a forum selection clause might inadvertently slam the door on the plaintiff's cherished right to a jury trial. And here's the kicker: that right is a constitutional gem, one that can't be casually brushed aside by a simple contract.

What Does This Mean for Corporations?

The impact of this ruling is significant. It's a wakeup call for corporations to tread carefully when drafting forum selection clauses in their corporate documents. They can't play fast and loose with their shareholders' right to a jury trial. This constitutional right stands tall, and corporations will need to think twice before trying to swerve around it.

At A&M Logos International, we have over 30 years of experience drafting, notarizing, and legalizing charters, resolutions, and most other corporate and personal documents. Call us today at (212) 233-7061 or e-mail us at info@apostille.us. You may also wish to apply via our website.



 




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