## Facts

- Cal-State Business Products & Services, Inc., a California seller of office machines, entered dealership agreements with Ricoh entities to sell Ricoh office and fax machines.
- John Fisher, Cal-State’s president and principal shareholder, previously worked for Ricoh negotiating and authorizing hundreds of dealer contracts and stated he was extremely familiar with Ricoh’s dealer contract terms.
- Ricoh provided standard-form dealer contracts that (1) selected New York law and (2) required litigation in state or federal courts in Manhattan for disputes “arising under or in connection with” the agreements.
- Cal-State claimed Ricoh made misrepresentations and engaged in unfair conduct concerning dealership territory and related rights and sued in California asserting business tort-type claims.
- Ricoh moved to stay or dismiss under Code of Civil Procedure sections 410.30 and 418.10 based on the exclusive New York forum clauses and also filed a related action in federal court in New York.
- The trial court stayed the California case pending resolution of the New York action; Cal-State appealed.

## Issues

1. Whether the exclusive New York forum-selection clauses in the dealership agreements were enforceable against Cal-State.
2. Whether Cal-State met its burden to show enforcement would be unreasonable, unjust, or the product of fraud or overreaching directed at the forum clause.
3. Whether Cal-State’s tort-styled claims nonetheless fell within clause language covering disputes “arising under or in connection with” the agreements.
4. Whether the trial court abused its discretion by staying (rather than proceeding with) the California action in favor of the New York forum.

## Decision

- The Court of Appeal affirmed the stay.
- The forum-selection clauses were valid and enforceable, and Cal-State did not show clause-specific fraud, overreaching, or hardship so severe as to effectively deny a fair opportunity to litigate.
- The clause’s broad “arising under or in connection with” language encompassed Cal-State’s claims despite their tort labeling because they were tied to the contractual dealer relationship.
- Granting a stay pending the New York litigation was within the trial court’s discretion under the cited procedural statutes.

## Legal Principles

- California generally enforces contractual forum-selection clauses unless the resisting party proves enforcement would be unreasonable or unfair.
- The party opposing enforcement bears the burden to show (a) extreme inconvenience amounting to a practical denial of a day in court, (b) fraud, undue influence, or overweening bargaining power in procuring the clause, or (c) violation of a strong public policy.
- Allegations of wrongdoing in the broader business relationship do not defeat a forum clause absent proof that the clause itself was induced by fraud or coercion.
- When a contract contains a forum-selection clause, courts focus on enforceability of the clause rather than conducting a full traditional forum non conveniens balancing.
- Broad forum clauses extending to disputes “in connection with” an agreement can apply to related tort and statutory claims grounded in the contractual relationship.
- A stay, rather than dismissal, may be ordered to defer to the chosen forum while preserving the action pending the outcome elsewhere.

## Conclusion

The court enforced the parties’ exclusive New York forum-selection provisions and held that Cal-State, led by a sophisticated principal familiar with Ricoh dealer contracts, failed to show clause-specific fraud or hardship sufficient to defeat enforcement; the trial court therefore acted within its discretion in staying the California case in favor of litigation in New York.


Cal-State Bus. Prods. & Servs., Inc. v. Ricoh, 12 Cal. App. 4th 1666, 16 Cal. Rptr. 2d 417 (Cal. Ct. App. 1993)