EpicentRx v. Superior Court CA4/1
CourtCalifornia Court of Appeal
Date FiledOctober 26, 2026
DocketD088094
StatusUnpublished
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Full Opinion
Filed 10/26/26 EpicentRx v. Superior Court CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
has not been certified for publication or or dered published for purposes of rule 8.1115.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
EPICENTRX, INC. et al.,
D088094
Petitioners,
(Super. Ct. No. 37-2022-00015228-
v. CU-BT-CTL)
THE SUPERIOR COURT OF
SAN DIEGO COUNTY,
Respondent;
EPIRX, L.P.,
Real Party in Interest.
ORIGINAL PROCEEDING in mandate challenging an order of the
Superior Court of San Diego County, Marcella O. McLaughlin, Judge. Relief
granted.
O’Hagan Meyer, Angeli C. Aragon and Clint D. Robison for Petitioners.
No appearance for Respondent.
Engstrom Lipscomb & Lack, Walter J. Lack, Steven C. Shuman, and
Tara A. Foroughi for Real Party in Interest.
INTRODUCTION
This is the second mandate petition to determine the correct forum for
litigation between EpicentRx, Inc. (the Company) and several of its
individual officers and employees (collectively, defendants) and one of the
Company’s minority shareholders, EpiRx, L.P. (EpiRx). Defendants moved to
dismiss EpiRx’s San Diego action based on forum non conveniens, relying on
a mandatory forum selection clause in the Company’s certificate of
incorporation which designated the Delaware Court of Chancery as the
exclusive forum to resolve certain stockholder disputes. On remand from the
California Supreme Court’s reversal of this court’s decision in the first
mandate proceedings, EpicentRx, Inc. v. Superior Court (2025) 18 Cal.5th 58,
67 (EpicentRx II), the trial court found the forum selection clause valid and
enforceable, and dismissed one of EpiRx’s claims on the ground that it fell
within the scope of the clause but kept EpiRx’s other claims in San Diego.
Because we conclude the court erred by not granting defendants’ motion to
dismiss the entirety of EpiRx’s San Diego action, we grant defendants the
relief they request in their second petition for writ of mandate.
FACTUAL AND PROCEDURAL BACKGROUND
I.
EpiRx’s Complaint
In its complaint filed in San Diego County Superior Court, EpiRx
alleged the Company is a Delaware corporation headquartered in La Jolla,
California that develops cancer treatment medications. EpiRx further
2
alleged the Company’s controlling stockholder, Interwest Partners, L.P.,1 is a
California partnership with its principal place of business in California; nine
of the 10 individual defendants are California residents; and the events and
conduct giving rise to liability occurred primarily in San Diego County,
California.
EpiRx alleged it is a minority shareholder, having invested $5 million
in the Company between 2016 and 2018 in exchange for shares of the
Company’s stock. EpiRx claimed the defendants and others solicited money
from third-party investors in exchange for shares in the Company that they
never intended to deliver and diverted money from cancer drug research into
the personal accounts of the Company’s management officers. According to
EpiRx, this misconduct impeded efforts to take the Company public and
drove down the value of its stock. EpiRx further alleged that, when it
discovered the alleged misconduct, the Company “froze” EpiRx out of any
corporate information by denying its request to inspect its books and records
and removed its representative from the board of directors.
Based on these allegations, EpiRx brought claims for fraudulent
concealment, promissory fraud, breach of contract, breach of fiduciary duty,
and unfair business practices. It sought rescission and repayment of its
$5 million investment, in addition to compensatory and punitive damages.
The complaint included a demand for a jury trial.
1 Interwest Partners, L.P. has settled with EpiRx.
3
II.
Defendants’ Motion to Dismiss for Forum Non Conveniens
Defendants moved to dismiss the complaint for forum non conveniens
under Code of Civil Procedure2 section 418.10, subdivision (a)(2), invoking a
mandatory forum selection clause in the Company’s certificate of
incorporation3 which designates the Delaware Court of Chancery as the
exclusive forum (the Delaware clause).4 The Delaware clause provides:
“Unless the [Company] consents in writing to the selection of an
alternative forum, the Court of Chancery in the State of
Delaware shall be the sole and exclusive forum for any
stockholder (including beneficial owner) to bring (i) any
derivative action or proceeding brought on behalf of the
2 All further undesignated statutory references are to the Code of Civil
Procedure.
3 “A certificate of incorporation is ‘a contractual agreement between the
corporation and its shareholders.’ ” (Wong v. Restoration Robotics, Inc. (2022)
78 Cal.App.5th 48, 61 (Wong).)
4 Defendants also relied on a similar mandatory forum selection clause in
the Company’s bylaws, which provided, “Exclusive Jurisdiction. Unless the
[Company] consents in writing to the selection of an alternative forum, the
Court of Chancery of the State of Delaware shall be the sole and exclusive
forum for (i) any derivative action or proceeding brought on behalf of the
[Company,] (ii) any action asserting a claim of breach of a fiduciary duty
owed by any director, officer or other employee of the [Company] to the
[Company] or [its] stockholders, or (iii) any action asserting a claim arising
pursuant to any provision of the Delaware General Corporation Law or the
Certificate or By-laws.” As the California Supreme Court observed, “the
forum selection clause in the [Company’s] certificate of incorporation is
broader than the similar clause in the [Company’s] bylaws.” (EpicentRx II,
supra, 18 Cal.5th at p. 69, fn. 1.) As in EpicentRx II, the parties do not
otherwise distinguish them and so we also focus on the forum selection clause
in the certificate of incorporation and refer to a forum selection ‘clause’ in the
singular. (Ibid.)
4
[Company], (ii) any action asserting a claim of breach of fiduciary
duty owed by any director, officer or other employee of the
[Company] to the [Company] or the [Company’s] stockholders,
(iii) any action asserting a claim against the [Company], its
directors, officers or employees arising pursuant to any provision
of the [Delaware General Corporation Law] or the [Company’s]
certificate of incorporation or bylaws or (iv) any action asserting a
claim against the [Company], its directors, officers or employees
governed by the internal affairs doctrine . . . .”
The trial court ruled the Delaware Court of Chancery does not
guarantee the right to a jury and, thus, by requiring the parties to litigate
there, the Delaware clause constituted a de facto pre-dispute jury trial waiver
in contravention of California’s public policy protecting the right to a jury
trial. For this reason, the court declined to enforce the Delaware clause and
denied defendants’ motion to dismiss.
III.
First Petition for Writ of Mandate
Defendants petitioned this court for a writ of mandate directing the
trial court to vacate its order denying the motion to dismiss. After issuing an
order to show cause, this court affirmed the trial court’s order, concluding
that the Delaware clause was unenforceable because it contravened
California’s strong policy in favor of the right to a jury trial. (EpicentRx, Inc.
v. Superior Court (2023) 95 Cal.App.5th 890, 897, 905 (EpicentRx I).)
The California Supreme Court granted review and reversed our
EpicentRx I decision. (EpicentRx II, supra, 18 Cal.5th at p. 67.) Our high
court held that, although California has a strong public policy in favor of the
right to a jury trial, this “strong public policy protects the jury trial right in
California courts, not elsewhere.” (Id. at p. 67.) Therefore, “[a] forum
selection clause is not unenforceable simply because it requires the parties to
5
litigate in a jurisdiction that does not afford civil litigants the same right to
trial by jury as litigants in California courts enjoy.”5 (Ibid.)
The matter was ultimately remanded to the trial court on EpiRx’s other
unadjudicated arguments against enforcement of the Delaware clause. The
California Supreme Court declined to address, in the first instance, EpiRx’s
argument that “the forum selection clause ‘was not freely and voluntarily
negotiated at arm’s length’ and is therefore unenforceable.” (EpicentRx II,
supra, 18 Cal.5th at p. 85.) Because neither the trial court nor this court
“considered the import, if any, of the manner of the clause’s adoption,” the
high court remanded for further proceedings on this question. (Ibid.)
Subsequently, in our unpublished opinion on remand, we granted in part
defendants’ first petition, directing the trial court to vacate its order denying
the motion to dismiss, and remanded for the trial court’s consideration of
EpiRx’s arguments regarding the manner in which the Delaware clause was
adopted. (EpicentRx, Inc. v. Superior Court (Oct. 6, 2025, D081670) [nonpub.
opn.].)
5 The California Supreme Court left open, for another day, “whether
California’s strong public policy in favor of the right to a jury trial might be
relevant, in combination with other factors, to the enforceability of a forum
selection clause in other contexts or under other theories.” (EpicentRx II,
supra, 18 Cal.5th at p. 84.)
6
IV.
Trial Court’s Ruling on Remand
On remand, defendants asserted the scope of remand was limited to
addressing EpiRx’s challenge to the manner of the Delaware clause’s
adoption, a challenge it argued was without merit.
In its supplemental brief in opposition to the motion to dismiss, EpiRx
argued the Delaware clause was unfair and unreasonable, and should not be
enforced, because it was “belatedly added” to the Company’s certificate of
incorporation and bylaws, after the defendants’ alleged misconduct came to
light, and EpiRx did not receive any consideration for the amendment
implementing the Delaware clause. EpiRx also argued, for the first time,
that the gravamen of its complaint was governed by a stock purchase
agreement which contained a forum selection clause for courts in San Mateo
County,6 and not the Delaware Chancery Court. Lastly, it argued the
Delaware clause applied only to the breach of fiduciary duty claim, which it
offered to dismiss if necessary to keep the litigation in California.
Defendants replied that a forum selection clause must be upheld even if
it was not negotiated or bargained for; the certificate of incorporation and
bylaws both contained a mandatory forum selection clause designating the
6 The stock purchase agreement provided, under the heading “Governing
Law”: “This Agreement shall be governed by and construed under the laws of
the State of California in all respects as such laws are applied to agreements
among California residents entered into and performed entirely within
California. The parties agree that any action brought by either party under
or in relation to this Agreement, including without limitation to interpret or
enforce any provision of this Agreement, shall be brought in, and each party
agrees to and hereby does submit to the jurisdiction and venue of, any state
or federal court located in the County of San Mateo, California.”
7
Delaware Court of Chancery; and that the clause in these agreements was
superior to the stock purchase agreement’s forum selection clause
designating San Mateo County courts. Further, defendants argued EpiRx’s
action fell within the scope of the Delaware clause because the action asserts
derivative claims, implicates Delaware General Corporate Law (DGCL), and
triggers the internal affairs doctrine.
After a hearing, the trial court issued its ruling in a minute order dated
April 2, 2026, granting in part defendants’ motion to dismiss. The court
rejected EpiRx’s contention that the Delaware clause was “subordinate” to
the forum selection clause in the stock purchase agreement, because EpiRx
“did not move to enforce that clause” in the stock purchase agreement. The
court also rejected EpiRx’s argument that the Delaware clause was
unenforceable based on its manner of adoption. Relying on the holding in
Drulias v. 1st Century Bancshares, Inc. (2018) 30 Cal.App.5th 696, 707 that
“ ‘[a] forum selection clause need not be subject to negotiation to be
enforceable,’ ” the court rejected EpiRx’s argument that the clause was
unenforceable because it was “unilaterally adopted.” Finally, the court found
that EpiRx failed to show the Delaware clause was outside EpiRx’s
reasonable expectations as a stockholder of a Delaware corporation or that
enforcement would be unconscionable.
The trial court then turned to whether the causes of action alleged in
the complaint fell within the scope of the Delaware clause. First, it dismissed
EpiRx’s breach of fiduciary duty claim with prejudice as EpiRx requested.
The court then dismissed EpiRx’s breach of contract claim upon a finding
that it falls within the scope of the Delaware clause because it concerns the
internal affairs of the Company, namely EpiRx’s rights as a shareholder to
examine financial records. The court, however, denied the motion to dismiss
8
as to the remaining claims for fraudulent concealment, promissory fraud, and
unfair business practices, after finding they do not relate to the internal
affairs of the Company or the DGCL, and thus, are outside the scope of the
Delaware clause.
V.
Second Petition for Writ of Mandate
Before us now is defendants’ second petition for writ of mandate,
challenging the trial court’s new decision denying their motion to dismiss
EpiRx’s three remaining claims for fraudulent concealment, promissory
fraud, and unfair business practices. Defendants contend the court’s ruling
improperly allows for piecemeal litigation across different jurisdictions and
different states. They further assert the three remaining claims invoke the
internal affairs doctrine and the DGCL, and are thus subject to the Delaware
clause.
In its return, EpiRx maintains the Delaware clause does not apply to
its San Diego action because it is subordinate to the forum selection clause in
the stock purchase agreement designating San Mateo County as the proper
forum. It contends that, in any event, defendants’ concerns of piecemeal
litigation are unfounded because EpiRx has no intention of refiling its breach
of fiduciary duty claim in Delaware, and it has already refiled its breach of
contract claim in San Mateo County Superior Court. It further asserts there
is no risk of inconsistent results because the dismissed breach of contract
claim presents a legal theory and damages request that are distinct from the
remaining claims. Lastly, EpiRx argues the trial court properly denied the
9
motion to dismiss as to the remaining claims because those claims do not
seek relief under the internal affairs doctrine or the DGCL.
DISCUSSION
We issued an order to show cause on defendants’ second petition for
writ of mandate. We now grant relief. Our review is for abuse of discretion.
(See Schmidt v. Trinut Farm Management, Inc. (2023) 92 Cal.App.5th 997,
1006 (Schmidt).) Under this standard, we review the lower court’s decision to
determine if the ruling made exceeds the bounds of reason, with all
circumstances before it being considered.7 (America Online, Inc. v. Superior
Court (2001) 90 Cal.App.4th 1, 7 (America Online).)
I.
Enforcement of Forum Selection Clauses Generally
“Forum non conveniens is an equitable doctrine invoking the
discretionary power of a court to decline to exercise the jurisdiction it has
7 The parties agree that our review is for abuse of discretion. We note
there is a split of authority regarding the appropriate standard of review to
apply to a trial court’s decision on whether a forum selection clause should be
enforced through a motion to dismiss for forum non conveniens, with the
majority of courts applying an abuse of discretion standard of review and a
minority applying the substantial evidence standard of review. (See
Schmidt, supra, 92 Cal.App.5th at pp. 1005–1006 [collecting cases].) As our
high court just reaffirmed in EpicentRx II, “ ‘forum selection clauses are valid
and may be given effect, in the [trial] court’s discretion and in the absence of
a showing that enforcement of such a clause would be unreasonable’ ”; such a
decision is “a matter of trial court discretion under the doctrine of forum non
conveniens.” (EpicentRx II, supra, 18 Cal.5th at p. 73, italics added.) Thus,
as the court in Schmidt put it, “Given our high court’s view on the matter,
and that of the majority of appellate courts in this state, we likewise join the
majority view and review such questions for abuse of discretion.” (Schmidt,
at p. 1006.)
10
over a transitory cause of action when it believes that the action may be more
appropriately and justly tried elsewhere.” (Stangvik v. Shiley Inc. (1991)
54 Cal.3d 744, 751.) Thus, “[w]hen a court upon motion of a party or its own
motion finds that in the interest of substantial justice an action should be
heard in a forum outside this state, the court shall stay or dismiss the action
in whole or in part on any conditions that may be just.” (§ 410.30, subd. (a);
see id., § 418.10, subd. (a)(2) [a defendant may file a motion “[t]o stay or
dismiss the action on the ground of inconvenient forum”].) A defendant
seeking to enforce a forum selection clause may bring a motion to dismiss on
grounds of forum non conveniens pursuant to sections 410.30 and 418.10.
(See Global Financial Distributors Inc. v. Superior Court (2019)
35 Cal.App.5th 179, 186; Global Packaging, Inc. v. Superior Court (2011)
196 Cal.App.4th 1623, 1633 [“Enforcement of forum-selection clauses is an
offshoot of the principle of inconvenient forum.”].)
When a motion based on forum non conveniens does not invoke a forum
selection clause, courts apply a two-step analysis. (EpicentRx II, supra,
18 Cal.5th at p. 72.) “ ‘[A] court must first determine whether the alternate
forum is a “suitable” place for trial. If it is, the next step is to consider the
private interests of the litigants and the interests of the public in retaining
the action for trial in California.” (Ibid.) But “[t]his approach changes
significantly if the parties have agreed to resolve their disputes in a non-
California forum.” (Id. at p. 73.)
Where there is a forum selection clause that has been entered into
freely and voluntarily, “the test is simply whether application of the clause is
unfair or unreasonable.” (Berg v. Mtc Electronics Techs. Co. (1998)
61 Cal.App.4th 349, 358; accord EpicentRx II, supra, 18 Cal.5th at p. 74
[“such clauses ‘typically will be enforced, absent a showing that enforcement
11
of the forum selection clause would be unfair or unreasonable’ ”].) “This
favorable treatment is attributed to our law’s devotion to the concept of one’s
free right to contract, and flows from the important practical effect such
contractual rights have on commerce generally.” (America Online, supra,
90 Cal.App.4th at p. 11.) As our high court reaffirmed, “ ‘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.’ ” (EpicentRx II,
at p. 73.)
The party who seeks to avoid enforcement of an otherwise applicable
forum selection clause bears a heavy burden to show enforcement would be
unreasonable. (Trident Labs, Inc. v. Merrill Lynch Commercial Finance
Corp. (2011) 200 Cal.App.4th 147, 154 (Trident Labs); Miller-Leigh LLC v.
Henson (2007) 152 Cal.App.4th 1143, 1149.) That burden cannot be met by
reliance on “ ‘the factors of inconvenience and expense’ of the selected forum.”
(EpicentRx II, supra, 18 Cal.5th at p. 73.) “ ‘ “Mere inconvenience or
additional expense is not the test of unreasonableness since it may be
assumed that the plaintiff received under the contract consideration for these
things.” ’ ” (Ibid.) Thus, “[e]ven a California resident will normally be bound
by a forum selection clause.” (Id. at p. 74.)
II.
It Is Undisputed the Delaware Clause Is Valid and Enforceable
We begin with the undisputed fact that the mandatory forum selection
clause designating the Delaware Court of Chancery as the parties’ exclusive
forum to resolve certain stockholder disputes is valid and enforceable, as to
any of EpiRx’s claims that fall within its scope. Unlike defendants’ present
challenge to the trial court’s partially adverse ruling, EpiRx did not seek a
12
writ challenging the court’s rulings that enforcement was not unreasonable
or unconscionable based on the manner of its adoption and that the Delaware
clause was valid and enforceable as to its breach of contract claim. Indeed,
EpiRx has abandoned these arguments in the proceedings before this court.
It does not argue here that the Delaware clause was not free and voluntary,
or that enforcement would be unfair or unreasonable. Thus, we decline to
exercise our discretion to further consider these issues. (See Waller v. Truck
Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 24 [recognizing appellate court’s
discretion to consider issue not originally briefed by the parties where it
“wishes to consider a point” but must afford opportunity for supplemental
briefing under Government Code section 68081]; Hibernia Sav. & Loan Soc.
v. Farnham (1908) 153 Cal. 578, 584 [court is “undoubtedly at liberty to
decide a case upon any points that its proper disposition may seem to require,
whether taken by counsel or not”].)
Instead, EpiRx continues to press the argument that the Delaware
clause is unenforceable as to its surviving claims because it is subordinate to
the forum selection clause in the stock purchase agreement, designating
San Mateo County as the proper forum for claims related to EpiRx’s purchase
of the Company’s stock. But, again, EpiRx did not seek a writ challenging
the trial court’s adverse ruling that it could not rely on the stock purchase
agreement clause because it “did not move to enforce” it. Regardless, we
reject the claim.
EpiRx filed this action in San Diego County and never moved to
transfer it to San Mateo County. Thus, it did not invoke the forum selection
clause in the stock purchase agreement in this action. In fact, EpiRx did not
even address the stock purchase agreement until after this action was
remanded to the trial court following the California Supreme Court’s decision
13
in EpicentRx II, nearly four years after it filed its complaint in San Diego.
Where, as here, a party engages in extensive litigation in the jurisdiction of
filing without invoking a forum selection clause, it may not belatedly seek
enforcement of the clause. (Cf. Trident Labs, supra, 200 Cal.App.4th at
pp. 155–157 [enforcement of forum selection clause upon motion of defendant
would be unreasonable where defendant filed an answer and cross-complaint
and conducted discovery in California and did not seek to invoke forum
selection clause “for well over a year and a half”].)
III.
The Trial Court Erred by Not Applying the Delaware Clause to Dismiss
EpiRx’s Remaining Claims
Given that the Delaware clause is valid and enforceable as to claims
falling within its scope, the only question before us is whether the trial court
abused its discretion by not applying the mandatory forum selection clause to
dismiss EpiRx’s remaining claims for fraudulent concealment, promissory
fraud, and unfair business practices claims. We conclude the court did err,
for two reasons. First, the plain language of the Delaware clause and policies
disfavoring piecemeal litigation do not permit EpiRx’s claims to be split
across different jurisdictions. Second, even if severance was permitted by the
Delaware clause, EpiRx’s individual claims fall within the scope of the
Delaware clause.
A. EpiRx’s Claims Cannot Be Severed for Purposes of Applying the
Delaware Clause
The trial court found EpiRx’s claim for breach of contract is governed
by the internal affairs doctrine and, thus, the Delaware clause applies to that
claim. On this basis, the court dismissed the breach of contract claim from
the San Diego action, and the parties do not challenge this ruling here. The
14
court, without much explanation, found EpiRx’s remaining three claims for
fraudulent concealment, promissory fraud, and unfair business practices did
not fall within the scope of the mandatory forum selection clause and
declined to dismiss them. If allowed to stand, the result of this order would
be that three of EpiRx’s claims would proceed in San Diego while the other
would be filed in a different jurisdiction.8 But the plain language of the
Delaware clause and the policies disfavoring piecemeal litigation do not
permit such partitioning of EpiRx’s claims.
Both California and Delaware courts interpret forum selection clauses
by their plain language. (See Intershop Communications AG v. Superior
Court (2002) 104 Cal.App.4th 191, 196–198 [looking to plain language of
forum selection clause]; GXP Capital, LLC v. Argonaut Mfg. Servs. (Del.
2021) 253 A.3d 93, 100 [finding trial court properly interpreted forum
selection clause pursuant to plain meaning]; see also Salamon v. Orchid
Glob., Inc. (2026) 122 Cal.App.5th 183, 195 (Salamon) [assuming without
deciding that Delaware law governed interpretation of forum selection clause
designating Delaware Court of Chancery as mandatory forum].) And the
Delaware clause states that “any action asserting a claim against the
Company, its directors, officers or employees governed by the internal affairs
doctrine” must be brought in the Delaware Court of Chancery. (Italics
added.) This language plainly dictates that when an action contains at least
8 Rather than refiling its breach of contract claim in the Delaware Court
of Chancery pursuant to the Delaware clause, EpiRx refiled the claim in
San Mateo County Superior Court based on the forum selection clause in the
stock purchase agreement. Whether EpiRx properly filed the claim in
San Mateo County is not an issue before us here.
15
one claim falling within the scope of the clause, the entire action is to proceed
in Delaware.
The parties’ contracted language “comports with common sense and
commercial reality.” (Nedlloyd Lines B.V. v. Superior Court (1992) 3 Cal.4th
459, 469 (Nedlloyd) [considering choice-of-law clause].) As our Supreme
Court explained in Nedlloyd, “When a rational businessperson enters into an
agreement establishing a transaction or relationship and provides that
disputes arising from the agreement shall be . . . [brought in] an identified
jurisdiction, the logical conclusion is that he or she intended that
[jurisdiction] to apply to all disputes arising out of the transaction or
relationship. We seriously doubt that any rational businessperson,
attempting to provide by contract for an efficient and business-like resolution
of possible future disputes, would intend that the laws of multiple
jurisdictions would apply to a single controversy having its origin in a single,
contract-based relationship. Nor do we believe such a person would
reasonably desire a protracted litigation battle concerning only the threshold
question of . . . [which jurisdiction was to hear] which asserted claims or
issues. Indeed, the manifest purpose of a [forum selection] clause is precisely
to avoid such a battle.” (Id. at pp. 469–470; Olinick v. BMG Entertainment
(2006) 138 Cal.App.4th 1286, 1300–1301 [applying reasoning of Nedlloyd to
forum selection clause]; Cal-State Business Products & Services, Inc. v. Ricoh
(1993) 12 Cal.App.4th 1666, 1677 [same].)
Requiring that this case remain intact not only comports with the
parties’ contractual considerations but also protects the “policy of
encouraging judicial economy, avoiding piecemeal litigation, and encouraging
convenience of the parties.” (In re Fuel Industry Climate Cases (2026)
117 Cal.App.5th 882, 896.) Courts have recognized in a variety of contexts
16
“the law’s abhorrence of a multiplicity of lawsuits.” (Hulsey v. Koehler (1990)
218 Cal.App.3d 1150, 1157 (Hulsey); see, e.g., Mycogen Corp. v. Monsanto Co.
(2002) 28 Cal.4th 888, 897 (Mycogen) [“A clear and predictable res judicata
doctrine promotes judicial economy. Under this doctrine, all claims based on
the same cause of action must be decided in a single suit.”]; In re Fuel
Industry Climate Cases, at p. 896 [recognizing concerns of judicial economy
and avoidance of piecemeal litigation favored extending personal jurisdiction
to all claims in an action]; Hulsey, at p. 1157 [considering public policy served
by statute requiring defendant to raise all related causes of action in a cross-
complaint]; Californians for Native Salmon Etc. Ass’n v. Dep’t of Forestry
(1990) 221 Cal.App.3d 1419, 1430–1431 [action for declaratory relief was
proper in part because “piecemeal litigation of the issues in scores of
individual proceedings would be an immense waste of time and resources”].)
“We discern no difference between” the public policy considerations at play in
those cases and those at issue here. (Hulsey, at p. 1157.)
EpiRx resists this conclusion, but we are not persuaded by its
argument that the trial court’s order would not result in piecemeal litigation
and risk inconsistent results, for several reasons.
First, EpiRx argues defendants “have made no showing that EpiRx has
filed or will file in Delaware,” and that “[t]here is no Delaware action, and
there will be no Delaware litigation arising from this dispute.” It is not clear
how EpiRx would have defendants make a showing as to EpiRx’s own
litigation strategy. Regardless, we are not persuaded by EpiRx’s self-serving
commitment not to pursue a Delaware action at this juncture when its
San Diego action has not yet been foreclosed.
Second, EpiRx argues its breach of contract claim “is separate and
distinct from the fraud in the inducement claims and the unfair business
17
practice claims,” as it presents a different legal theory, is premised on
different events, and seeks distinct damages. But the cases that have
considered the public policy disfavoring piecemeal litigation do not support
severing the causes of action here, which all relate to defendants’ alleged
inducement of EpiRx’s stock purchases and the resulting business dispute.
(See, e.g., Mycogen, supra, 28 Cal.4th at p. 897 [“ ‘ “Res judicata precludes
piecemeal litigation by splitting a single cause of action or relitigation of the
same cause of action on a different legal theory or for different relief.” ’ ”]; In
re Fuel Industry Climate Cases, supra, 117 Cal.App.5th at p. 896 [causes of
action should be litigated together when they “aris[e] out of a common
nucleus of operative facts”]; Hulsey, supra, 218 Cal.App.3d at pp. 1156–1157
[defendant must assert cause of action in cross-complaint rather than
separate action where it “arises out of the same transaction, occurrence, or
series of transactions or occurrences as the cause of action which the plaintiff
alleges in his complaint”].)
Last, EpiRx argues defendants could avoid any potential piecemeal
litigation by moving to transfer the San Diego action to San Mateo County,
“where the cases could again be consolidated into one case.” But the trial
court found, and we agree, that EpiRx may not belatedly invoke the
San Mateo County forum selection clause in the stock purchase agreement.
It would be nonsensical to allow EpiRx to achieve their untimely quest to
litigate this matter in San Mateo County by forcing defendants to make the
transfer request when they have never sought to litigate this action in any
venue other than the Delaware Court of Chancery.
Upon the trial court’s finding that the Delaware clause was valid and
enforceable with respect to EpiRx’s breach of contract claim, the plain
language of the clause and the policies disfavoring piecemeal litigation
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necessitate dismissal of the entire action. The trial court’s order severing
EpiRx’s breach of contract claim from its surviving claims was error.
B. EpiRx’s Individual Claims Fall Within the Scope of the Delaware
Clause
Even if the trial court could have severed EpiRx’s claims that fell
within the scope of the Delaware clause from any that did not, the result
would be the same because we conclude each of EpiRx’s claims fall within the
scope of the clause.
Again, the Delaware clause expressly states it applies to claims
governed by the internal affairs doctrine. “The internal affairs doctrine is a
conflict of laws principle which recognizes that only one State should have
the authority to regulate a corporation’s internal affairs . . . because
otherwise a corporation could be faced with conflicting demands.” (Edgar v.
Mite Corp. (1982) 457 U.S. 624, 645 (Edgar).) The United States Supreme
Court, as well as the courts of California and Delaware, have recognized that
the internal affairs doctrine applies to matters pertaining to the relationship
between the corporation and its shareholders. (Ibid.; EpicentRx II, supra,
18 Cal.5th at p. 70, fn. 2; VantagePoint Venture Partners 1996 v. Examen,
Inc. (Del. 2005) 871 A.2d 1108, 1113 (VantagePoint).) “ ‘[T]he law of the state
of incorporation applies to an action that concerns the “internal affairs” of
corporations.’ ” (EpicentRx II, at p. 70, fn. 2; Atherton v. FDIC (1997) 519
U.S. 213, 224.)
Here, the trial court did not explain why it found EpiRx’s claims for
fraudulent concealment, promissory fraud, and unfair business practices do
not relate to the Company’s internal affairs. The court, however, explicitly
found EpiRx’s breach of contract claim relates to the Company’s internal
affairs because it concerns EpiRx’s rights as a shareholder, thereby implying
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it found EpiRx’s other claims do not concern shareholder rights. And both
here and in the trial court, EpiRx has argued its claims do not relate to the
Company’s relationship to EpiRx as a shareholder because it was not yet a
shareholder at the time of the alleged misconduct that induced their
investment in the Company. But EpiRx’s claims, as alleged in the complaint,
including the three surviving claims, are not limited to alleged misconduct
occurring before it became a shareholder and directly relate to its
relationship to the Company as such a shareholder.
Specifically, EpiRx alleged in the complaint that, between August 2016
and June 2018, it invested money in the Company in exchange for shares of
its stock. And it alleged the misconduct underlying each of its causes of
action occurred between 2015 and 2017, which is both before and after it
became a shareholder. EpiRx similarly rests each of its claims on an
allegation that the Company and its employees concealed information
“during the period of EpiRx’s investment in [the Company].” It further
alleges it has been injured by the devaluation of the stock it owns. Notably,
in its supplemental opposition to the motion to dismiss, EpiRx argued the
San Mateo forum selection clause in the stock purchase agreement should
apply because its claims “cannot be divorced from the purchase of the stock,
as the purchase of the stock and entry into the Stock Purchase Agreement
comprise the acts performed in reliance on misrepresentations and as a result
of concealments.” EpiRx cannot have it both ways.
EpiRx also argues its surviving claims are not governed by the internal
affairs doctrine because it “is not challenging any aspect of EpicentRx’s
incorporation or matters of internal corporate governance,” “[f]or example, [it]
is not suing for failure to declare a dividend or the method of calculating
dividends . . . ; [it] is not fighting abo[ut] election or appointment of directors,
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adoption or amendment of by-laws or certificate of incorporation, voting or
other rights accorded by its preferred shares, how votes are tallied on any
corporate governance issue, method of holding shareholder meetings, or any
merger, consolidation, reorganization, or other business decision.”
Regardless of what EpiRx’s claims may not challenge, as we have explained
their claims do “pertain[ ] to the relationship between [EpicentRx] and its
shareholders,” which is sufficient to invoke the internal affairs doctrine.
(Edgar, supra, 457 U.S. at p. 645; EpicentRx II, supra, 18 Cal.5th at p. 70,
fn. 2; VantagePoint, supra, 871 A.2d at p. 1113.)
Finally, relying on Lidow v. Superior Court (2012) 206 Cal.App.4th 351,
EpiRx argues its claims are not governed by the internal affairs doctrine
because “ ‘vital statewide interests are at stake, such as maintaining the
integrity of California security markets and protecting its citizens from
harmful conduct.’ ” Lidow considered whether, under the internal affairs
doctrine, “California law or foreign law applies to a claim brought by an
officer of a foreign corporation for wrongful termination in violation of public
policy.” (Lidow, at p. 354.) It issued a narrow holding, under the specific
circumstances of that case, that “where a foreign corporation has removed or
constructively discharged a corporate officer in retaliation for that person’s
complaints of possible harmful or unethical activity, California law applies.”
(Ibid.) Even assuming Lidow applies more broadly to prohibit the application
of the internal affairs doctrine where the claim at issue invokes a vital
statewide interest, EpiRx has not identified such an interest here. EpiRx’s
claims allege fraud, which can be brought in Delaware. And while California
might have an interest in protecting persons from fraud in the purchase of
stock, garden variety fraud is not sufficient to defeat a forum selection
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clause.9 (See Furda v. Superior Court (1984) 161 Cal.App.3d 418, 428 [“[I]f
garden variety fraud were sufficient of itself to de