What is a forum selection clause?

When a business decides to start a lawsuit, its attorneys will make an effort to commence the lawsuit in a jurisdiction that is believed to be favorable for the company. The basis for assuming this favoritism can be many things – the court is located in a city where the company has a large presence or the perceived political leanings of the judges on the court are favorable to the company or the company has obtained favorable results in other cases in the same court. For this reason, companies often insert what are called forum selection clauses into their contracts. There provisions state that in the event of litigation between the two entities, the case must be brought in the location specified in the contract. A recent and notable case demonstrates how such clauses operate.

Trump v. Twitter

Most residents of San Diego are aware that former president Donald Trump has sued Twitter to reinstate his account, which was closed by Twitter shortly after the Capitol riot on Jan. 6, 2021. Twitter recently filed a motion in the federal court in Miami where Trump filed his suit requesting the judge to transfer the case to the federal court in the Northern District of California. The basis for the motion was a forum selection clause that Twitter places in all of its user agreements requiring that any case brought against Twitter must be filed in federal court in California.

Trump argued that his status as a former president exempted him from the forum selection clause. Trump also claimed that he opened his Twitter account in 2009 when he was not president and that this fact provided further grounds for exempting him from the forum selection clause.

The Court’s decision

The court issued a relatively terse 13-page order granting Twitter’s motion. The court held that “Trump’s former status as the president of the United States does not preclude the application of the forum selection clause. Second, the forum selection clause is valid and mandatory.” This order means that the federal court system will move the case to a federal judge in the Northern District of California and that all further proceedings, including a trial, will take place in that district. The Northern District of California is located in San Francisco. Any appeal from the court’s final order will be heard by the Circuit Court for the Ninth Circuit.

A forum selection clause should be a standard part of every contract between a company and any party with which it does a significant amount of business. An experienced trial lawyer can draft such a clause in a form that is adaptable to all of the company’s contracts.