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 aSouth Carolina Supreme Court ruling they believe will limitinstances of venue shopping.[@@]

The decision clarifying the states' requirements forestablishing the residency of a defendant came in the case of aninjured railroad worker who brought suit far from where he was hurton the job.

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

The American Tort Reform Association, which submitted a brief inthe 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 anycounty in which the defendant "owns land and conducts business," infavor of one requiring the defendant to maintain an office and havean agent for it to be considered a resident.

"We applaud the South Carolina Supreme Court for this monumentaldecision," said ATRA President Sherman Joyce. "It will help put anend to personal injury lawyers abusing the state's lax venue lawsby filing lawsuits in jurisdictions that have little or noconnection to the case."

In the case, Whaley vs. CSX Transportation Inc., DannyWhaley filed a lawsuit claiming injuries from heat exposure as heworked as a locomotive engineer for the company between Greenwoodand Laurens Counties.

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

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

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

Instead, the court established a new standard for establishingcorporate residency, under which the case could not proceed inHampton County.

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

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

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