Court of Appeals of Texas, Fifth District, Dallas
IN RE BAMBU FRANCHISING LLC, BAMBU DESSERTS AND DRINKS, INC., AND BAMBU IP, LLC, Relators
Proceeding from the 298th Judicial District Court Dallas
County, Texas Trial Court Cause No. DC-16-05683
Justices Francis, Brown, and Whitehill.
original proceeding involves the enforceability of a
contractual forum selection clause to claims asserted under
the Texas Deceptive Trade Practices Act (DTPA). The clause
states that all matters arising under the agreement shall be
brought in San Jose, California. Relators complain that the
trial court abused its discretion by refusing to enforce the
clause and denying their motion to dismiss. The real party in
interest maintains that the clause does not apply to the tort
claims asserted below. We conditionally grant the writ.
Bambu Franchising LLC ("Bambu") is the franchisor
of Vietnamese-style beverage and dessert restaurants. The
real party in interest (Plaintiff below) Bamboo Dynasty, LLC
("Dynasty") obtained from Bambu the right to use
the Bambu trademark and operating system (including recipes,
training, and ingredient access) for a Bambu restaurant in
Grand Prairie, Texas. The franchise relationship was
consummated through three agreements. One of those
agreements, the Business Agreement, includes the following
forum selection clause:
Any lawsuit relating to any matter arising under this
agreement shall be initiated in a State or Federal Court
located in San Jose, California.
other agreements included similar clauses, but Bambu relies
solely on the clause found in the Business Agreement here.
Section 10.7 of the Business Agreement also designates
California law as the law governing the agreement and
construction of the rights of the parties under the
agreement. Section 10.7 further provides that Dynasty
"irrevocably consents to the jurisdiction, venue and to
the service of process, pleadings, and notices in connection
with any and all actions and processes in the State and
Federal Courts located in the County of Santa Clara,
sued Bambu below for DTPA violations, alleging Bambu failed
to make certain required disclosures and failed to pay a $25,
000 bond required by the Texas Business Opportunity Act.
Dynasty claims that Bambu sold it a "business
opportunity" and represented that Dynasty would earn or
likely earn a profit in excess of the purchase price.
According to Dynasty, Bambu then failed to register the
opportunity with the Texas Secretary of State and failed to
establish a statutorily-required trust account or irrevocable
letter of credit. Dynasty also argues that Bambu
misrepresented to Dynasty that the transaction was a license
of intellectual property and not a business opportunity.
Bambu moved to dismiss based on the forum selection clause.
Bambu argued that Dynasty's claims are subject to the
forum selection clause because they arise under the Business
Agreement. Bambu further contended that for Dynasty to
prevail on its claims, Dynasty must prove that the agreements
triggered the statutory disclosure requirement because the
transaction involved the sale of a business opportunity.
Bambu asserted Dynasty would have no claims against Bambu but
for the agreements. The trial court denied the motion to
dismiss and this original proceeding followed.
clauses provide parties with an opportunity to contractually
preselect the jurisdiction for dispute resolution. Pinto
Tech. Ventures, L.P. v. Sheldon, No. 16-0007, 2017 WL
2200357, at *5 (Tex. May 19, 2017) (citing In re AIU Ins.
Co., 148 S.W.3d 109, 111 (Tex. 2004) (orig.
proceeding)). Mandamus relief is available to enforce
forum-selection agreements because there is no adequate
remedy by appeal when a trial court abuses its discretion by
refusing to enforce a valid forum-selection clause that
covers the dispute. In re Int'l Profit Assocs.,
Inc., 274 S.W.3d 672, 675 (Tex. 2009) (orig. proceeding)
clauses are generally enforceable and presumptively valid.
In re Laibe Corp., 307 S.W.3d 314, 316 (Tex. 2010)
(orig. proceeding) (per curiam); In re Int'l Profit
Assocs., 274 S.W.3d at 675. Failing to give effect to
contractual forum-selection clauses and forcing a party to
litigate in a forum other than the contractually chosen one
amounts to " 'clear harassment' ... injecting
inefficiency by enabling forum-shopping, wasting judicial
resources, delaying adjudication on the merits, and skewing
settlement dynamics...." In re Lisa Laser USA,
Inc., 310 S.W.3d 880, 883 (Tex. 2010) (orig. proceeding)
(quoting In re AutoNation, Inc., 228 S.W.3d 663,
667-68 (Tex. 2007) (orig. proceeding)).
attempting to show that such a clause should not be enforced
bears a heavy burden. In re ADM Inv'r Servs.,
Inc., 304 S.W.3d 371, 375 (Tex. 2010) (original
proceeding); In re Lyon Fin. Servs., Inc., 257
S.W.3d 228, 232 (Tex. 2008) (orig. proceeding) (per curiam)
(citing In re AIU Ins. Co., 148 S.W.3d at 113);
In re Laibe Corp., 307 S.W.3d at 316. A trial court
abuses its discretion in refusing to enforce a
forum-selection clause unless the party opposing enforcement
meets its heavy burden of showing that (1) enforcement would
be unreasonable or unjust, (2) the clause is invalid for
reasons of fraud or overreaching, (3) enforcement would
contravene a strong public policy of the forum where the suit