Georgia's Unconstitutional Business Venue Provision: A Kingdom with Impermissible Borders
40 Pages Posted: 7 Nov 2017
Date Written: November 5, 2017
Georgia's business venue statute, as construed by the Georgia Supreme Court in October 2016, violates the Dormant Commerce Clause. That statute allows a plaintiff to bring suit against a company in the county where the “cause of action originated;” it is the only potential venue anchor against a company that does not require some purposeful act of the defendant company within the target county. But if that anchor is the sole statutory reason that venue is appropriate in a county, a company can remove the suit back to the “county in Georgia” that contains its “principal place of business.”
In 2016, Georgia’s Supreme Court held that a company can only remove a suit back to its principal place of business if its worldwide “principal place of business” is in Georgia. Because of this interpretation, a company with out-of-state headquarters lacks a crucial litigation advantage that a company with headquarters in Georgia has. Therefore, the business venue provision conflicts with the Dormant Commerce Clause. That clause proscribes any law that is passed with the sole intent of disadvantaging foreign businesses — in other words, it proscribes “simple economic protectionism” that inhibits interstate trade. Moreover, even if a statute was not passed for “simple economic protectionism,” the Dormant Commerce Clause still requires courts to balance the government interest behind a burdensome statute against the net negative effect on interstate trade it imposes. The Georgia Supreme Court's interpretation of Georgia’s business venue removal provision fails both tests--it is facially discriminatory, and it also disproportionately burdens non-Georgia businesses without a compelling reason to do so. It is accordingly unconstitutional.
Note: Published with permission from Mercer Law Review. Forthcoming in Mercer Law Review Vol. 69, No. 2, Spring 2018.
Keywords: Georgia Civil Procedure; Venue; Constitutional Law; Dormant Commerce Clause
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