The Delaware Court of Chancery and the California Jury Trial Right

"4 The relevant California statute, Section 631 of the Code of Civil Procedure, does not permit parties to waive trial by jury in advance by contract.5 Thus, under the California Supreme Court's 2005 decision in Grifton Partners v. Superior Court, contractual waivers of the right to a civil jury trial are invalid and unenforceable in the California courts.6 California Right to Jury Trial The California Court of Appeal has applied the Grcfton Partners rule to decline to enforce forumselection clauses when doing so would deprive a litigant of the right to jury trial, at least on the facts presented in two recent decisions. The California Superior Court declined to enforce the forum-selection provision and denied the motion to dismiss, reasoning that under California law, the stockholder-plain tiff was entitled to a jury trial on its fraud claims (though not on other claims, including the fiduciary duty claims), and that under Grcfton Partners, this was a fundamental right that could not be waived through a predispute agreement, including a certificate of incorporation or bylaw provision. According to the Superior Court, EpicentRx's forum-selection provision was a defacto pre-dispute jury trial waiver because it required the parties to litigate in the Delaware Court of Chancery, which does not guarantee a right to a jury trial. [...]the trial court reasoned, under the burden-shifting analysis applied in Handoush and the precedents on which that decision relied, the moving defendants were obliged to show that enforcement of the forum-selection provision would not diminish the stockholder-plaintiff's rights under California law. "12 But the same claims would not be subject to jury trial in the Delaware Court of Chancery.13 Thus, the Court of Appeal stated, "all parties agree [that] the forum selection clauses in EpicentRx's corporate documents, as a practical matter, operate as implied predispute waivers that will deprive [the stockholder-plaintiff) of its right to a jury trial.