South Carolina High Court Limits Venue Changes

By Matt Brady

NU Online News Service, Feb. 3, 4:05 p.m. EST?Advocates of law suit process reform are hailing a South Carolina Supreme Court ruling they believe will limit instances of venue shopping.[@@]

The decision clarifying the states' requirements for establishing the residency of a defendant came in the case of an injured railroad worker who brought suit far from where he was hurt on the job.

In a unanimous decision filed yesterday, the state's high court ruled that the trial court had erred in allowing a case to be filed against CSX Transportation Inc. in Hampton, Hampton County, S.C.

The American Tort Reform Association, which submitted a brief in the case, noted that Hampton was number three on its list of "Judicial Hellholes."

The court also revised it's standard for determining residency, scrapping its prior rule that a lawsuit could be filed in any county in which the defendant "owns land and conducts business," in favor of one requiring the defendant to maintain an office and have an agent for it to be considered a resident.

"We applaud the South Carolina Supreme Court for this monumental decision," said ATRA President Sherman Joyce. "It will help put an end to personal injury lawyers abusing the state's lax venue laws by filing lawsuits in jurisdictions that have little or no connection to the case."

In the case, Whaley vs. CSX Transportation Inc., Danny Whaley filed a lawsuit claiming injuries from heat exposure as he worked as a locomotive engineer for the company between Greenwood and Laurens Counties.

Mr. Whaley is a resident of Greenwood County, where CSX maintains an office, and all witnesses in the case live in Greenwood or neighboring Abbeville or Laurens County. Hampton County, where the suit was filed, is located over 100 miles from the area.

The court's ruling to eliminate the old residency standard was based on the fact that the statute it was based upon has been amended by the state legislature.

"Even if we were to find that the court properly used the 'owns property and transacts business' language from the service statute to define 'resides,'" the S.C. Supreme Court said, "we no longer support a test that, derived from statute, no longer exists in that statute."

Instead, the court established a new standard for establishing corporate residency, under which the case could not proceed in Hampton County.

"We hold that for purposes of venue, a defendant corporation resides in any county where it (1) maintains its principal place of business, or (2) maintains an office and agent for the transaction of business," the court said in its ruling.

"CSX is incorporated under Virginia law, and its principal place of business is in Florida. Although CSX owns property and transacts business in Hampton County, it does not maintain an office and agent for the transaction of business there."

According to ATRA, the number of lawsuits filed in Hampton County has nearly doubled in the last five years. Of those cases filed in Hampton County during 2002, 67 percent were filed by residents from other counties and other states.