choice-of-law clause in California

2025When presented with a choice of law provision, as a preliminary step, “the trial court should first examine the choice- of-law clause and ascertain whether the advocate of the clause has met its burden of establishing that the various claims . . . fall within its scope.” (Washington Mutual, supra, 24 Cal.4th at p. 916 , citing Nedlloyd, supra, 3 Cal.4th at pp. 468-470 [Hong Kong choice of law clause broad enough to encompass contract and tort claims].) Then, “[i]f the trial court finds that the . . . 21 As stated, Debreu subsequently argued in response to our request for supplemental briefing

2025Pursuant to the user agreement, PayPal users agree “that, except to the extent inconsistent with or preempted by federal law and except as otherwise stated in this user agreement, the laws of the State of Delaware, without regard to principles of conflict of laws, will govern this user agreement and any claim or dispute that has arisen or may arise between [the user] and PayPal.” “The interpretation of a choice of law clause on undisputed facts presents a purely legal question which we review de novo.” (Hughes Electronics Corp. v. Citibank Delaware (2004) 120 Cal.App.4th 251, 257 .) A choice o

2015Volt’s critical point was that “[w]here, as here, the parties have agreed to abide by state rules of arbitration, enforcing those rules according to the terms of the agreement is fully consistent with the goals of the FAA . . . .” (Volt, at p. 479.) According to Volt, “[t]here is no federal policy favoring arbitration under a certain set of procedural rules; the federal policy is simply to ensure the enforceability, according to their terms, of private agreements to arbitrate.” (Volt, supra, 489 U.S. at p. 476 , fn. omitted.) “Interpreting a choice-of-law clause to make applicable state rules

2010Interpreting a choice-of-law clause to make applicable state rules governing the conduct of arbitration—rules which are manifestly designed to encourage resort to the arbitral process—simply does not. . . offend any . . . policy embodied in the FAA.” (Volt, supra, 489 U.S. at p. 476 .) “[W]e think the California arbitration rules which the parties have incorporated into their contract generally foster the federal policy favoring arbitration. . . . [T]he FAA itself contains no provision designed to deal with the special practical problems that arise in multiparty contractual disputes when some

2025When presented with a choice of law provision, as a preliminary step, “the trial court should first examine the choice- of-law clause and ascertain whether the advocate of the clause has met its burden of establishing that the various claims . . . fall within its scope.” (Washington Mutual, supra, 24 Cal.4th at p. 916 , citing Nedlloyd, supra, 3 Cal.4th at pp. 468-470 [Hong Kong choice of law clause broad enough to encompass contract and tort claims].) Then, “[i]f the trial court finds that the . . . 21 As stated, Debreu subsequently argued in response to our request for supplemental briefing

2025Likewise, in the trial court, the parties’ dueling motions and the court’s decision on attorney fees assumed California law, not Delaware law, applied. “ ‘ “[G]enerally speaking the forum will apply its own rule of decision unless a party litigant timely invokes the law of a foreign state.” ’ ” (Washington Mutual Bank v. Superior Court (2001) 24 Cal.4th 906, 919 ; accord, Chen v. Los Angeles Truck Centers, LLC (2019) 42 Cal.App.5th 488 , 495.) “[T]he court should conduct a choice-of- law analysis as to each particular issue presented for decision,” and “the issue of entitlement to attorney fee

2015(See DeSantis v. Wackenhut Corp. (Tex. 1990) 793 S.W.2d 670, 677-678 (DeSantis).) That test examines and compares the significance of each state’s relationship to the parties and their transaction, each state’s interest in having its laws applied to the parties’ dispute, and the impact applying one state’s laws would have on any fundamental policy underlying the other state’s laws. 6 ( 793 S.W.2d at p. 678 .) Alliantgroup, however, does not apply these three steps to show that enforcing the choice-of-law clause would contravene the fundamental public policy embodied in the Labor Code’s wage an

2015(See DeSantis v. Wackenhut Corp. (Tex. 1990) 793 S.W.2d 670, 677-678 (DeSantis).) That test examines and compares the significance of each state’s relationship to the parties and their transaction, each state’s interest in having its laws applied to the parties’ dispute, and the impact applying one state’s laws would have on any fundamental policy underlying the other state’s laws. 6 ( 793 S.W.2d at p. 678 .) Alliantgroup, however, does not apply these three steps to show that enforcing the choice-of-law clause would contravene the fundamental public policy embodied in the Labor Code’s wage an

2026A choice-of-law clause concerning procedural matters stated: “ ‘[A]ny arbitration conducted hereunder shall be governed by the [FAA].’ ” (DIRECTV, at pp. 1341-1342, fn. 3.) The court concluded this language did not make the FAA’s procedural sections regarding judicial review ( 9 U.S.C. §§ 10 , 11) applicable in state court, in part because the “contract did not specify whether enforcement proceedings were to be brought in state or federal court.” (DIRECTV, at pp. 1350-1351, fn. 12.) And, the court noted, the language of several of the FAA’s procedural sections “reflects Congress’s intent to li

2026A choice-of-law clause concerning procedural matters stated: “ ‘[A]ny arbitration conducted hereunder shall be governed by the [FAA].’ ” (DIRECTV, at pp. 1341-1342, fn. 3.) The court concluded this language did not make the FAA’s procedural sections regarding judicial review ( 9 U.S.C. §§ 10 , 11) applicable in state court, in part because the “contract did not specify whether enforcement proceedings were to be brought in state or federal court.” (DIRECTV, at pp. 1350-1351, fn. 12.) And, the court noted, the language of several of the FAA’s procedural sections “reflects Congress’s intent to li

2023(Ibid.) “As explained above, [the defendant] must show enforcing the forum selection clause ‘will not diminish in any way’ [the plaintiff’s] statutory rights.” (Ibid, quoting Wimsatt, supra, 32 Cal.App.4th at p. 1522 & America Online, supra, 90 Cal.App.4th at pp. 10- 11.) The defendant “carefully avoid[ed] making any specific and definitive argument that Texas courts either have applied or will apply California wage and hour laws despite a choice-of-law clause designating Texas law.” (Verdugo, at p. 158.) Because the defendant declined the opportunity to eliminate uncertainty by refusing to st

2015(America Online, supra, 90 Cal.App.4th at p. 6 [“ ‘The laws of the Commonwealth of Virginia, excluding its conflicts-of-law rules, govern this Agreement and your membership’ ” (italics added)].) The America Online court, however, did not rely on the italicized portion of the choice-of-law clause to support its analysis.

2008Justice Brown remarked in a separate concurrence to Advanced Bionics that, “[i]f a careful choice-of-law analysis indicates that the foreign jurisdiction’s law applies to the parties’ dispute, . . . that fact weighs heavily in favor of permitting the foreign proceeding to go forward unimpeded.” (Advanced Bionics, supra, 29 Cal.4th at p. 708 (conc. opn. of Brown, J.).) However, she did not suggest the reverse was true—i.e., that it would be appropriate to enjoin foreign proceedings if a choice-of-law analysis favored application of the forum’s own law.

2006(Advanced Bionics, supra, 29 Cal.4th at p. 708, fn. 6 .) A choice-of-law analysis “is simply not a good ‘fit’ with the injunction context.” (Stonington Partners v. Lernout & Hauspie Speech (3rd Cir. 2002) 310 F.3d 118 , 130.) This is particularly true where another forum has not been selected. *839 In sum, we conclude that the Advanced Bionics exceptional circumstance test is applicable whether a TRO or antisuit injunction seeks to restrain pending litigation or the filing of an action in a foreign court.

1998In the interest of assuring the justified expectations of the parties (Rest.2d Conf. of Laws, § 6, subd. (2)(d)), the 1990 restructuring should be governed by the same choice-of-law rule as the original financing. [2] Hereafter referred to simply as Restatement. [3] In addition to the California precedents cited in the Nedlloyd opinion on page 464, 11 Cal.Rptr.2d 330 , 834 P.2d 1148 , we note that decisions concerning secured promissory notes have evidenced a policy favoring the enforceability of choice-of-law provisions. ( Consolidated Capital Income Trust v. Khaloghli (1986) 183 Cal.App.3d 1

1998In the interest of assuring the justified expectations of the parties (Rest.2d Conf. of Laws, § 6, subd. (2)(d)), the 1990 restructuring should be governed by the same choice-of-law rule as the original financing. [2] Hereafter referred to simply as Restatement. [3] In addition to the California precedents cited in the Nedlloyd opinion on page 464, 11 Cal.Rptr.2d 330 , 834 P.2d 1148 , we note that decisions concerning secured promissory notes have evidenced a policy favoring the enforceability of choice-of-law provisions. ( Consolidated Capital Income Trust v. Khaloghli (1986) 183 Cal.App.3d 1

2023First, a court must determine whether “the language of the choice-of-law clause is broad enough to include state law on the subject of arbitrability.” (Mount Diablo, supra, 101 Cal.App.4th at p. 724 .) If the language is broad enough, the second step requires the court “to determine whether the particular provision of state law in question is one that reflects a hostility to the enforcement of arbitration agreements that the FAA was designed to overcome.” (Ibid., citing Mastrobuono, supra, 514 U.S. 52 ; accord Cronus Investments, supra, 35 Cal.4th at pp. 387, 392–393.) When the state law rule

2021Diablo, supra, 7 101 Cal.App.4th at pp. 722, 714.) The court explained, under the analysis in Mastrobuono, supra, 514 U.S. 52 , “[i]f the language of the choice-of-law clause is broad enough to include state law on the subject of arbitrability, . . . the second step in the court’s analysis, under Mastrobuono, must be to determine whether the particular provision of state law in question is one that reflects a hostility to the enforcement of arbitration agreements that the FAA was designed to overcome.

2023First, a court must determine whether “the language of the choice-of-law clause is broad enough to include state law on the subject of arbitrability.” (Mount Diablo, supra, 101 Cal.App.4th at p. 724 .) If the language is broad enough, the second step requires the court “to determine whether the particular provision of state law in question is one that reflects a hostility to the enforcement of arbitration agreements that the FAA was designed to overcome.” (Ibid., citing Mastrobuono, supra, 514 U.S. 52 ; accord Cronus Investments, supra, 35 Cal.4th at pp. 387, 392–393.) When the state law rule

2023First, a court must determine whether “the language of the choice-of-law clause is broad enough to include state law on the subject of arbitrability.” (Mount Diablo, supra, 101 Cal.App.4th at p. 724 .) If the language is broad enough, the second step requires the court “to determine whether the particular provision of state law in question is one that reflects a hostility to the enforcement of arbitration agreements that the FAA was designed to overcome.” (Ibid., citing Mastrobuono, supra, 514 U.S. 52 ; accord Cronus Investments, supra, 35 Cal.4th at pp. 387, 392–393.) When the state law rule

2017First, Buswest notes that in Reich, supra, 67 Cal.2d 551 , our Supreme Court held that facts occurring after the accident—in that case, the Ohio plaintiffs’ relocation to California—had no effect on the choice of law analysis, as it would otherwise encourage forum shopping.

2010Although California no longer follows the old choice-of-law rule that generally called for application of the law of the jurisdiction in which a defendant’s allegedly tortious conduct occurred without regard to the nature of the issue that was before the court (see Reich, supra, 67 Cal.2d 551, 553), California choice-of-law cases nonetheless continue to recognize that a *98 jurisdiction ordinarily has “the predominant interest” in regulating conduct that occurs within its borders ( Reich, supra, 67 Cal.2d 551, 556 ; see Cable v. Sahara Tahoe Corp. (1979) 93 Cal.App.3d 384, 394 [ 155 Cal.Rptr.

2025(Valencia v. Smyth (2010) 185 Cal.App.4th 153, 173-174 (Valencia).) 7 In this appeal, Brown does not dispute the Agreement is governed by the FAA’s substantive provisions.

2013(See Rodriguez v. American Technologies, Inc. (2006) 136 Cal.App.4th 1110, 1116 , 1121–1122; Peleg v. Neiman Marcus Group, Inc. (2012) 204 Cal.App.4th 1425 , 1445–1448; see generally Valencia v. Smyth (2010) 185 Cal.App.4th 153 , 162–179.) Under the FAA, we apply the unconscionability doctrine adopted by California courts.

2020(See Mencor Enterprises, Inc. v. Hets Equities Corp. (1987) 190 Cal.App.3d 432, 436 [applying Rest.2d Conf. of Laws, § 203].) Bearing in mind that "California usually follows the Restatement in every substantive field" (1 Witkin, Summary of Cal. Law (11th ed. 2019) Contracts, § 62), we apply the Second Restatement's section 207 to the choice of law question before us. 15 The service agreement between Airs and CBL contained this choice-of-law clause: "The parties agree that this agreement shall be construed and the relations of the parties shall be determined in accordance with the laws of the

1992The proper test We have not previously considered the enforceability of a contractual choice-of-law provision. (1) We have, however, addressed the closely related issue of the enforceability of a contractual choice-of-forum provision, and we have made clear that, "No satisfying reason of public policy has been suggested why enforcement should be denied a forum selection clause appearing in a contract entered into freely and voluntarily by parties who have negotiated at arm's length." ( Smith, Valentino & Smith, Inc. v. Superior Court (1976) 17 Cal.3d 491, 495-496 [ 131 Cal. Rptr. 374 , 551 P.2

2015(Hall, at p. 418, citing Wilko , at pp. 435-437.) By analogy, the Hall court concluded the choice-of-law clause requiring the California plaintiffs to litigate their Securities Law claims under Nevada law violated the Securities Law’s antiwaiver provision and thereby rendered the related forum selection clause unenforceable: “Similarly, we believe the right of a buyer of securities in California to have California law and its concomitant nuances apply to any future dispute arising out of the transaction is a ‘provision’ within the meaning of [the antiwaiver statute] which cannot be waived or e

2015(Hall, at p. 418, citing Wilko at pp. 435-437 .) By analogy, the Hall court concluded the choice-of-law clause requiring the California plaintiffs to litigate their Securities Law claims under Nevada law violated the 4 The United States Supreme Court later reversed its Wilko decision in Rodriguez de Quijas v. Shearson/American Express, Inc. (1989) 490 U.S. 477 , based on the Federal Arbitration Act’s ( 9 U.S.C. § 1 et seq.) public policy favoring arbitration as a quick and cost effective means of dispute resolution. 15 Securities Law’s antiwaiver provision and thereby rendered the related foru

2007(See Discover Bank v. Superior Court, supra, 134 Cal.App.4th at pp. 894-895, 36 Cal. Rptr.3d 456 .) Contractual choice-of-law clauses are "usually respected by California courts" ( Smith, Valentino & Smith, Inc. v. Superior Court, supra, 17 Cal.3d at p. 494 , 131 Cal.Rptr. 374 , 551 P.2d 1206 ), and the issue is one for the court's discretion. ( In re Marriage of Crosby & Grooms (2004) 116 Cal.App.4th 201, 204 , 10 Cal.Rptr.3d 146 .) Pointe made no showing the choice-of-law clause in the retainer agreement was invalid or unreasonable, and thus the court properly exercised its discretion by app

2007(See Discover Bank v. Superior Court, supra, 134 Cal.App.4th at pp. 894-895.) Contractual choice-of-law clauses are “usually respected by California courts” {Smith, Valentino & Smith, Inc. v. Superior Court, supra, 17 Cal.3d at p. 494 ), and the issue is one for the court’s discretion. {In re Marriage of Crosby & Grooms (2004) 116 Cal.App.4th 201, 204 [ 10 Cal.Rptr.3d 146 ].) Pointe made no showing the choice-of-law clause in the retainer agreement was invalid or unreasonable, and thus the court properly exercised its discretion by applying it.

2016After several additional iterations, Weil-McLain became a division of The Marley-Wylain Company, a wholly-owned subsidiary of The Marley Company LLC. 3 Below, the parties set forth the facts as to when and where Swanson was exposed to asbestos. 2 DISCUSSION We agree with Marley-Wylain that under the governmental interest analysis of this choice of law issue, Michigan law applies.4 (Kearney v. Salomon Smith Barney, Inc. (2006) 39 Cal.4th 95, 100 ; Offshore Rental Co. v. Continental Oil Co. (1978) 22 Cal.3d 157, 161 .) In McCann v. Foster Wheeler LLC (2010) 48 Cal.4th 68 (McCann), our Supreme Co

2007In contrast, Royal Indemnity Group v. Travelers Indemnity Co. (N.D.Cal., Sept. 6, 2005, No. C-04-00886) 2005 WL 2176896 , pages *4—*5 concluded that the California courts had not abrogated the choice-of-law rule in section 1646. 15 Whether this differentiated approach is either wise or desirable is a question best addressed to the Legislature, which has the sole authority to repeal a statute. 16 Washington Mutual, supra, 24 Cal.4th at page 919 (“California follows a three-step ‘governmental interest analysis’ to address conflict of laws claims and ascertain the most appropriate law applicable

2026A choice-of-law clause concerning procedural matters stated: “ ‘[A]ny arbitration conducted hereunder shall be governed by the [FAA].’ ” (DIRECTV, at pp. 1341-1342, fn. 3.) The court concluded this language did not make the FAA’s procedural sections regarding judicial review ( 9 U.S.C. §§ 10 , 11) applicable in state court, in part because the “contract did not specify whether enforcement proceedings were to be brought in state or federal court.” (DIRECTV, at pp. 1350-1351, fn. 12.) And, the court noted, the language of several of the FAA’s procedural sections “reflects Congress’s intent to li

2026A choice-of-law clause concerning procedural matters stated: “ ‘[A]ny arbitration conducted hereunder shall be governed by the [FAA].’ ” (DIRECTV, at pp. 1341-1342, fn. 3.) The court concluded this language did not make the FAA’s procedural sections regarding judicial review ( 9 U.S.C. §§ 10 , 11) applicable in state court, in part because the “contract did not specify whether enforcement proceedings were to be brought in state or federal court.” (DIRECTV, at pp. 1350-1351, fn. 12.) And, the court noted, the language of several of the FAA’s procedural sections “reflects Congress’s intent to li

2025(See Burger King, supra, 471 U.S. at p. 475 [The purposeful availment requirement “ensures that a defendant will not be haled into a jurisdiction solely as a result of ‘random,’ ‘fortuitous,’ or ‘attenuated’ contacts [citations], or of the ‘unilateral activity of another party or a third person’ [citations]”].) Also, each of the contracts has a choice of law clause that selects a forum other than California as its governing law.

2000In Burger King, although the court noted a choice of law clause should not be ignored, the court expressly cautioned that “such a provision standing alone would be insufficient to confer jurisdiction . . . .” (Burger King, supra, at p. 482 [ 105 S.Ct. at p. 2187 ].) That cautionary language applies here because the Hunts’ only contact with California is the lease and guaranty choice of law provision. 4 CMC points out that when a valid forum selection clause exists it will be enforced unless the resisting party meets a heavy burden of proving enforcement would be unreasonable under the circumst

2023Warren-Guthrie v. Health Net (2000) 84 Cal.App.4th 804 (Warren-Guthrie) is instructive.

2010(See Warren-Guthrie , at pp. 810-811.) The choice-of-law clause stated, “ ‘All Arbitration shall be conducted in accordance with the California Code of Civil Procedure, commencing with Section 1280.’ ” (Warren-Guthrie, at p. 815.) The Court of Appeal focused on the word “conducted,” interpreted that word to mean “how the arbitration shall be conducted,” and concluded the choice-of-law provision was too narrow to incorporate the CAA. (84 Cal.App.4th at pp. 815-816.) The court held that because the parties had failed to adopt the CAA, the FAA’s procedural provisions governed, displacing section

2020First, to the extent California law would contradict the parties’ agreement “to arbitrate all disputes and claims” here, “a general choice-of-law clause within an arbitration provision does not trump the presumption that the FAA supplies the rules for arbitration.” (Sovak v. Chugai Pharmaceutical Co. (9th Cir. 2002) 280 F.3d 1266, 1270 ; accord, Aviation Data, Inc. v. American Express Travel Related Services Co., Inc. (2007) 152 Cal.App.4th 1522, 1535 .) For this reason, “we will interpret the choice-of-law clause as simply supplying state substantive, decisional law, and not state law rules f

2010Waiver of Arbitration and Choice of Law In Aviation Data, Inc. v. American Express Travel Related Services Co., Inc. (2007) 152 Cal.App.4th 1522 [ 62 Cal.Rptr.3d 396 ] (Aviation Data), the parties’ agreement contained an arbitration provision and a choice-of-law clause.

2016After several additional iterations, Weil-McLain became a division of The Marley-Wylain Company, a wholly-owned subsidiary of The Marley Company LLC. 3 Below, the parties set forth the facts as to when and where Swanson was exposed to asbestos. 2 DISCUSSION We agree with Marley-Wylain that under the governmental interest analysis of this choice of law issue, Michigan law applies.4 (Kearney v. Salomon Smith Barney, Inc. (2006) 39 Cal.4th 95, 100 ; Offshore Rental Co. v. Continental Oil Co. (1978) 22 Cal.3d 157, 161 .) In McCann v. Foster Wheeler LLC (2010) 48 Cal.4th 68 (McCann), our Supreme Co

2013(See Kearney v. Salomon Smith *248 Barney, Inc. (2006) 39 Cal.4th 95, 107-108 [ 45 Cal.Rptr.3d 730 , 137 P.3d 914 ] (Kearney) [describing the traditional three-step choice-of-law inquiry].) 5 We proceed to describe the conflict in the appellate decisions concerning whether section 2010 applies to dissolved foreign corporations.