Wimsatt v. Beverly Hills Weight etc. Internat., Inc

In Wimsatt v. Beverly Hills Weight etc. Internat., Inc. (1995) 32 Cal.App.4th 1511, the Court first addressed which party bears the burden of proof on a motion to enforce a mandatory forum selection clause when the claims at issue are based on unwaivable statutory rights. The plaintiffs were franchisees who sued their franchisor under California's Franchise Investment Law (Corp. Code, 31000 et seq.; Franchise Investment Law), which the Legislature enacted to protect California franchisees. (Wimsatt, supra, 32 Cal.App.4th at p. 1513.) The plaintiffs alleged the defendant violated the Franchise Investment Law by making numerous misrepresentations to induce them to purchase a franchise. Based on a forum selection clause in the parties' franchise agreement, the trial court dismissed the plaintiffs' action. (Wimsatt, at pp. 1514-1516.) On appeal, a panel of this court acknowledged the party opposing enforcement of a mandatory forum selection clause ordinarily bears a heavy burden to show enforcement would be unreasonable or unjust, but we nonetheless concluded the burden must be reversed when unwaivable statutory rights are involved because a forum selection clause otherwise could be used to circumvent those unwaivable rights. (Id. at pp. 1519-1520.) Wimsatt explained, "One of the most important protections California offers its franchisee citizens is an antiwaiver statute which voids any provision in a franchise agreement which waives any of the other protections afforded by the Franchise Investment Law. A forum selection clause, however, carries the potential to contravene this statute by placing litigation in a forum in which there is no guaranty that California's franchise laws will be applied to a franchisee's claims. ... If a forum selection clause places in-state franchisees in an out-of-state forum which uses some balancing test (or equivalent) to determine that the law of the out-of-state forum should be used in place of California's, then a forum selection clause in a franchise agreement will have effectively circumvented California's antiwaiver statute. ... ... Given California's inability to guarantee application of its Franchise Investment Law in the contract forum, its courts must necessarily do the next best thing. In determining the 'validity and enforceability' of forum selection provisions in franchise agreements, its courts must put the burden on the franchisor to show that litigation in the contract forum will not diminish in any way the substantive rights afforded California franchisees under California law." (Wimsatt, supra, 32 Cal.App.4th at pp. 1520-1522.)