July 03, 2019

New Indiana Supreme Court Opinion Grants Corporate Defendants Strategic Flexibility Regarding Venue

On June 27, 2019, the Indiana Supreme Court held in Morrison v. Vasquez that the county where an in-state corporation’s actual “principal office” is located, not the location of its registered agent, determines the preferred venue for a case under Indiana Trial Rule 75(A)(4). 1 The court further held that the location of the registered agent no longer determines venue for out-of-state corporations. In practical terms, Morrison offers corporate defendants more flexibility with respect to venue in Indiana state court litigation.

Indiana Trial Rule 75(A) provides a list of 10 conditions that may establish a preferred venue for litigating a civil action. While a plaintiff may file the complaint in any of the 92 counties in Indiana, the trial court is required to transfer the case to a preferred venue upon proper request from a party. 2 However, if the complaint is already filed in a preferred venue, as determined by one of the first nine conditions, the trial court has no authority to transfer the case, even if another county is also a preferred venue.

One of the venue-establishing conditions under Trial Rule 75(A) is the “county where [ ] the principal office of a defendant is located." 3 Previously, a corporation was understood to have a “principal office” at the address of its registered agent in the state, which Indiana business law requires all corporations to maintain. 4 This meant that many lawsuits filed against corporations doing business in Indiana were properly venued in Marion County because many corporations rely on service companies to be their registered agents, and those companies tend to maintain offices in Indianapolis. As a result, a complaint filed in Marion County would likely remain in Marion County (which is typically the busiest court docket in the state), even if Marion County had no meaningful connection to the parties or events at issue.

With Morrison, the Indiana Supreme Court ended that counter-intuitive scenario, citing recent changes to Indiana’s business corporation statutes that no longer tie a corporation’s principal office to its registered agent. 5At its heart, Morrison is a common-sense decision that affords corporate defendants more flexibility with respect to venue considerations in Indiana state court litigation. First, for out-of-state defendants, since new legislation defines “principal office” as the “principal executive office of an entity,” regardless of whether that office is in Indiana, Trial Rule 75(A)(4) no longer establishes a preferred venue. Plaintiffs will now have to rely on one of the other enumerated conditions under Trial Rule 75(A) to establish a preferred venue in cases involving out-of-state defendants. Second, in-state corporations are no longer subject to preferred venue in the county where their registered agents reside; rather, in-state corporations are only subject to preferred venue under Trial Rule 75(A)(4) where they maintain their “principal executive office.” 6 Thus, both in-state and out-of-state corporations are afforded more latitude with respect to venue considerations under Morrison, offering corporate defendants the ability to transfer a case to a preferred venue if the only connection between the putative forum county and the corporation is the location of its registered agent.

This is not to say that all cases should be transferred when a plaintiff files suit in a county that is not a preferred venue. Beyond determining whether transfer is available under the new rule delineated in Morrison, corporate defendants—both in-state and out-of-state—should consider the pros and cons of transfer. Some factors to consider include:

  • The corporation’s reputation in the respective communities
  • The judges in the respective counties
  • The jury pools in each venue (e.g., whether the defendant would prefer a local or rural jury over a metropolitan jury)
  • The pace of activity and local case management practices among the available venues
  • General convenience, such as the costs and scheduling considerations of having witnesses travel for trial or having counsel travel for in-person hearings

Most civil cases are resolved through settlement, and practical considerations like travel cost and the relative favorability of available judges and jury pools can provide the leverage necessary to facilitate a more favorable settlement. Sometimes these factors will weigh in favor of transferring the case to a preferred venue; other times these factors will weigh in favor of keeping the case where it was filed. Either way, the Indiana Supreme Court has created options through Morrison that were previously foreclosed, and these changes require corporate defendants and their counsel to consider venue more strategically in the future.

 
  1. Morrison v. Vazquez, __ N.E.3d __, No. 19S-CT-382, 2019 WL 2635644, at *4 (Ind. June 27, 2019).
  2. See, e.g., Am. Family Ins. Co. v. Ford Motor Co., 857 N.E.2d 971, 974 (Ind. 2006).
  3. Ind. T.R. 75(A)(4).
  4. See American Family, 857 N.E.2d at 975; CTB, Inc. v. Tunis, 95 N.E.3d 185, 189 (Ind. Ct. App. 2018).
  5. Morrison, 2019 WL 2635644, at *2; see Ind. Code § 23-0.5-4-12 (“The address of the agent does not determine venue in an action or a proceeding involving the entity.”)
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