Business Law Journal

In a pivotal 2025 decision, the California Supreme Court confirmed that businesses can be held to forum selection clauses even if doing so means waiving the procedural right to a jury trial under California law. This holding underscores a critical consideration for contract formation: what may seem like a routine contract clause can significantly alter your legal rights. Businesses must be vigilant during negotiations to ensure dispute resolution terms do not unintentionally undermine their position in future litigation.

According to two significant back-to-back rulings from the Northern District of California, using copyrighted books to train large language models (LLMs) qualifies as fair use under the Copyright Act, but the opinions differ on the impact of whether the copyrighted works were legally obtained or pirated on finding fair use.

Generative artificial intelligence (AI) has revolutionized how businesses create, communicate, and market.  For trademark owners and AI-utilizing businesses, however, AI brings not only opportunity but also significant risk.  

On March 21, 2025, the California Supreme Court rendered a decision in Madrigal, et al v. Hyundai Motor America (S280598) regarding the following question: “Does a plaintiff who has rejected a 998 offer or allowed it to be deemed withdrawn for want of timely acceptance, but later agrees to settle before trial, necessarily avoid the postoffer cost-shifting effects of section 998?”  The Supreme Court held that a plaintiff does not necessarily avoid section 998’s cost-shifting effects.

With the growing popularity and prevalence of generative artificial intelligence, courts are increasingly being called upon to decide novel legal issues based on never-before-seen phenomena that are challenging the traditional paradigm applied to human-generated content.  And copyright law is no exception.

Following the Legislature’s 2024 amendments to Section 16600, a new spotlight has been shown down on the so-called Trade Secret Exception and the rift that has emerged over the past few years between California courts about its continued application.  Ultimately, the California Supreme Court will likely be called upon in the near future to address whether—and to what extent—an employer may include restrictive covenants in an employment agreement as necessary to protect the employer’s trade secrets.  Until it does, litigants may credibly argue that the legislature’s recent amendments to Section 16600 abrogated the exception, diminished the exception, or had no effect on it at all.  

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In VFLA Eventco, LLC v. William Morris Endeavor Entertainment, LLC, the California Court of Appeal recently affirmed the importance of drafting a contract with a clear understanding of every word and clause, and the effect each has on the contract as a whole.

On September 30, 2023, California Governor Gavin Newsom signed into law Senate Bill (SB) No. 235, now codified as California Code of Civil Procedure section 2016.090, introducing a significant shift towards encouraging proactive initial disclosures in state court civil litigation. This legislative change amends California’s Civil Discovery Act to include proactive initial disclosure rules that align with those used in Federal Court. Effective for almost all civil cases filed after January 1, 2024, until January 1, 2027, this amendment heralds a new era of discovery rules in California that aim to foster judicial efficiency, transparency, and fairness in civil litigation.

The recent decision in Epochal Enterprises, Inc. v. LF Encinitas Properties, LLC, 2024 WL 358231 (1/31/24), asks the question: Will common exculpatory lease terms protect the landlord from an adverse jury verdict of gross negligence?  Ultimately, the answer is “No.”

Arbitration is a creature born of contract, and is favored as an expeditious and economical alternative to a civil lawsuit — in part due to the limited discovery available to parties in arbitration. Increasingly, however, arbitrations have increased in complexity, with discovery growing to proportions more typically seen in civil lawsuits (and likewise growing in cost). However, a California Court of Appeal has now explicitly enforced one of the limitations on discovery in arbitration, foreclosing discovery efforts from spilling over to nonparties to an arbitration unless the parties have otherwise agreed.