The Alabama Supreme Court Addresses Venue in Class Actions
On February 5, the Alabama Supreme Court issued an interesting decision addressing important issues of venue. The case, Ex parte 3M Company, Inc., discusses proper venue in class action claims as well as the proper procedure to transfer a case filed in the wrong venue. The case presents at least two points that should be carefully considered by class counsel.
To start, I'll try to condense the facts into just a few short sentences. In Ex parte 3M Company, the plaintiff lived in Lawrence County. He filed suit asserting class action claims in Franklin County. Yet, the principal place of business for ALL the named defendants was Morgan County. The case involved claims that the defendants produced certain biosolid pollutants in Morgan County that had been spread on area farmland, including farmland in Lawrence and Franklin Counties.
Alabama has a specific statute that governs venue in actions against defendant corporations. To paraphrase the statute, venue against defendant corporations is proper in the following counties:
- The county where a substantial part of the events or omissions occurred, or a substantial part of the subject real property is located; OR,
- The county of the defendant corporation's principal place of business in Alabama; OR,
- The county where the plaintiff resided or had its principal office at the time the claims accrued.
See, Ala.Code §6-3-7. The Alabama statute also expressly states that in class action claims only the residences of the named class representatives can be considered for determining proper venue. It is this restriction upon which Alabama's Supreme Court based its decision that venue was not proper in Franklin County. I certainly agree that if the basis of venue was number 3 above, the county where the plaintiff resided, then the Supreme Court decision correctly followed the statute. However, Alabama's statute provides three independent grounds to establish venue, using the conjunction "or" between each. Venue is also proper in a county where a substantial part of the events occurred with no residency limitation. Is the spreading of biosolid pollutants on farmland in Franklin County a substantial part of the events at issue? If the alleged pollutants were spread on farmland in Franklin County, then I believe venue would be appropriate. Yet, it appears that our Supreme Court has broadly applied the residency issue in class claims to drastically narrow a litigant's choice of forum. The first point to take from this case is to consider carefully the Alabama Supreme Court's interpretation of the venue statute.
The second issue relates to the transfer of cases filed in the wrong venue. Once the Alabama Supreme Court determined that venue of this class action was not proper in Franklin County, the issue became where to transfer the case. All the defendants wanted the case transferred to Morgan County. The plaintiff wanted the case transferred to Lawrence County. Either Morgan County or Lawrence County would have clearly been a proper venue for the case. While the plaintiff obviously gets the first choice at venue by virtue of filing the case, the statute allows the defendants the second choice if they all agree and their choice is a proper venue. The lesson for plaintiff's counsel -- Choose your venue well when you file the claim or it may later be chosen for you.
