The Law of Unintended Consequences

In 2005 the Missouri legislature and governor passed broad, sweeping laws under the guise of “tort reform.”  One aspect of the new law greatly changed where litigants could file lawsuits. 

To simplify to a great detail:  before the change, most tort lawsuits could be filed in a variety of counties depending upon circumstances, e.g., a lawsuit against multiple defendants could be filed in any county in which one defendant resided, and a lawsuit against a corporation could be filed in any county in which the company had an office or agent who regularly conducted the corporation’s business there.  The 2005 amendments to the law severely restricted the available venues for torts and provided specific venues for torts depending upon the circumstances of the case, often providing a single county in which the case could be brought.  However, the changes neglected to cover every situation, leaving some factual scenarios in which the law does not provide for a specific county in which a case shall be brought.  The outcome of one such case runs clearly contrary to the intent behind the changes by allowing plaintiffs to choose any county they liked rather than providing a specific county in which they could file.

In State ex rel. Neville v. Grate, 443 S.W.3d 688 (Mo. App. 2014), the Missouri Court of Appeals for the Western District was faced with a factual scenario not addressed by Missouri’s venue statutes, and the Court held that venue is proper in any county in Missouri in instances where the current statute, Section 508.010, RSMo, does not provide a specific venue.  The plaintiffs in the underlying case in the trial court sought damages for an injury that was alleged to have occurred in Kansas, and the case involved out-of-state plaintiffs, out-of-state individual defendants, and a foreign corporation with no registered agent in the State of Missouri.[1]  The suit was brought to recover injuries that were alleged to have occurred to a minor in an ATV accident as a result of the defendants’ failure to instruct, train, and supervise and their negligent entrustment. The physical injury was alleged to have occurred in Kansas, but the negligence that caused the injury was alleged to have occurred in Missouri.

Under the old venue statutes, venue for this case would have been determined by the general venue statute of Section 508.010, RSMo, specifically the former subsection (4), which addressed suits by summons where “all the defendants are non-residents of the state.”  Here, all of the defendants are non-residents.   The individual defendants were Kansas residents, and the corporate defendant was a foreign corporation with no registered agent in the state, which rendered it a non-resident because “[a]n unregistered foreign corporation does not have a ‘residence’ under the statutes.”  State ex rel. England v. Koehr, 849 S.W.2d 168 (Mo. App. 1993).  Under the former venue statute, venue would have been proper “in any county in this state” given the defendants involved.  Thus, the plaintiffs would have been free to file suit in Jackson County as they did in the

[1] According to the opinion, a Missouri LLC with a registered agent in Jackson County also was a defendant when the case first was filed.  The LLC was dismissed voluntarily, and the Court did not consider it or its presence in the case when determining venue.  Consequently, its presence in and impact on the case will not be addressed further.

Under the current venue statute, Section 508.010, RSMo, when suit is brought for injuries that occur outside the State of Missouri, venue is proper in the county where the corporate defendant has its registered agent, where an individual defendant has his or her principal place of residence, or where the plaintiff has his or her principal place of residence—none of which existed in this case because none of the parties had a residence in Missouri.  The Court recognized that the situation at hand, i.e., a tort filed by non-resident plaintiffs for injuries that occurred outside the state against a mix of non-resident individual defendants and a foreign corporation with no registered agent in the state, is not addressed by the current venue statute.  Consequently, the Court held that venue was proper in any county in Missouri, and the plaintiffs were free to litigate their claims in Jackson County, their preferred venue.

The clear implication of the holding is that, in instances like this that are not covered or addressed by the express terms of the venue statutes, venue is proper in any Missouri county.

The Missouri Supreme Court denied transfer last fall, so the case is now binding precedent—at least in the Western District.  There can be little doubt that the legislature did not intend a result like this when it revised the venue statute nearly a decade ago; the Court even tacitly acknowledged that fact when it noted that the changes in venue were made to reduce forum-shopping by plaintiffs.  Thus, it is not inconceivable that either the Eastern District or Southern District may decline to follow the holding, necessitating a resolution by the Missouri Supreme Court or the legislature.

In the meantime, plaintiffs should examine and consider whether the circumstances of a case allow them to escape the restrictions of the venue statute in order to gain greater venue options.  Foreign corporations (a term that, if not clear, refers to corporations incorporated in states other than Missouri and not simply to corporations from other countries) should consider designating a registered agent for service of process in Missouri to limit the venues in which they may reasonably be expected to defend a case.

It is worth noting that this gap in the law, i.e., the lack of a prescribed venue for a tort filed by a non-resident plaintiff who was first injured outside the state against a mix of foreign corporation and non-resident individual defendants, was recognized by Professor David Achtenberg (among others, presumably).  See David Jacks Achtenberg, Venue in Missouri after Tort Reform, 75 UMKC L. REV. 593 (2007).  Moreover, he foresaw the very resolution reached by the Court.

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*This post was originally published on July 15, 2015