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Time waits for no man, and neither does litigation. Even in the age of COVID-19, disputes are inevitable and litigation may be unavoidable. Remaining proactive is critical when facing any dispute, and especially in a crisis situation. Identifying critical paths, reviewing relationships and contracts, and planning for a litany of unknowns, including potential legal threats – individuals and businesses are trying to manage their “new normal,” and re-establish control over as many outcomes as possible.
But how? In the realm of legal disputes, a fundamental question is where to take the fight, which can go down in a variety of arenas such as boardrooms, arbiters’ officers, and of course, in a courtroom. If a lawsuit becomes inevitable and parties find themselves headed either to a federal or state jurisdiction, one of the first practical determinations is “location, location,” otherwise known as venue, or the physical location of the court that will adjudicate the case. While contracts may offer a variety of potential geographic options – such as choice of law – venue selection may not always be driven by the parties’ agreement. Many jurisdictions generally disfavor contractual venue-selection clauses; in Texas, for example, only venue selection clauses included within contracts involving a “major transaction” (over $1 million) potentially would be enforceable. Absent a major transaction, generally contracting parties cannot pre-select their preferred venue. See, e.g., Leonard v. Paxson, 654 S.W.2d 440 (Tex. 1983). And even “major-transaction” venue provisions may be rendered unenforceable if they conflict with certain state laws. Tex. Civ. Prac. Rem. Code § 15.020.
That’s because legal statutes, informed by applicable case law, and not parties’ agreements, usually govern the selection of a geographic location within either a state or federal jurisdiction where a particular legal dispute may be adjudicated. In state court cases, venue usually is located in a county within a state, and state law outlines which counties are appropriate locations to litigate a dispute. In Texas, for example, the Civil Practices and Remedies Code (“CPRC”) governs venue. Three statutory schemes under the CPRC determine where venue is proper: the mandatory-venue provisions, the permissive-venue provisions, and the general venue rule. If a mandatory-venue provision applies, then the lawsuit must be filed in the county designated by the rule. If venue is not mandatory in a particular county, then a case may proceed under an applicable permissive-venue provision or under the general venue rule. See generally Tex. Civ. Prac. Rem. Code Chapter 15. Under the general venue rule, a lawsuit can be filed in one of the following counties: (1) the county where all or a substantial part of the events giving rise to the claim occurred; (2) the county of the defendant’s residence when the cause of action accrued, if the defendant is a natural person; (3) the county of the defendant’s principal office in Texas, if the defendant is not a natural person; or (4) the county where the plaintiff resided when the action accrued, if none of the other three general venue provisions apply. Tex. Civ. Prac. Rem. Code § 15.002.
While parties may not be completely free to contract for venue, statutory provisions addressing venue generally are flexible and provide options for where a legal dispute will be heard. Consequently, a variety of factors may impact venue selection within the applicable statutory framework, including favorable legal rulings in a particular court, the location of witnesses and other evidence, relative convenience of the parties, docket congestion, and other forum selection considerations.
And in today’s COVID-19 climate, additional venue considerations are emerging when considering where to pursue a lawsuit. For example, some courts essentially are closed entirely or for all practical purposes, others are open for business and have adopted a variety of “new normal” procedures to process effectively and efficiently the resolution of legal disputes. Similarly, some courts have been more proactive in managing their dockets, while others are providing only limited access to the judiciary.
Federal and state courts have taken different approaches to managing the COVID-19 crisis, and it can be difficult to predict how courts will continue to function as the crisis evolves. Generally speaking, courts, even the most sophisticated and experienced, are most disrupted in geographic regions facing the most severe outbreaks of the pandemic. With a view toward containing and mitigating the spread of the virus, many state supreme courts have issued orders providing guidance to lower courts, and many such local courts have issued more- or less-strict orders on the basis of that guidance. But not all state courts have provided comprehensive (or any) procedures for case management. Similarly, federal trial courts have taken a district-by-district approach, with more specific court procedures instituted on a judge-by-judge basis. In short, the lack of uniform, consistent procedures among the various courts in both state and federal jurisdictions has injected some uncertainty, or at least flexibility, in how, whether, and when courts will continue to operate to manage litigation, as well as a concomitant opportunity to consider additional factors when it comes to venue selection.
Below are some examples of recent state and federal court orders that may help inform certain venue choices:
- The Texas Supreme Court is encouraging courts to implement remote appearances by phone or video for all proceedings that can occur remotely, and has called on all state courts to suspend proceedings or schedule them to avoid gatherings of large groups of people, including jury trials and large docket calls. Specifically, the Texas Supreme Court issued an order on April 1, 2020, tolling any deadline for the filing or service of any civil case from March 13, 2020 until at least June 1, 2020. Dallas County has canceled all jury trials through May 8. Harris County has suspended jury service through May 4, and limited the number of courts that can operate on any given day. State courts continue to conduct hearings remotely, either by phone or video conference. In Texas federal courts, the Northern, Eastern, and Western Districts of Texas have postponed all bench and jury trials scheduled to begin before May 1 until further notice; the postponement does not include other deadlines. The Southern District of Texas has deferred all jury trials in the Houston/Galveston division until May 1, 2020; the postponement does not include other deadlines.
- New York state courts have suspended new civil and criminal jury trials beginning March 16 until further notice; jury services are also halted. Gov. Andrew Cuomo issued an executive order tolling all proceeding deadlines through April 19. No nonessential filings, paper or electronic, will be accepted by the courts until further notice. New York City Criminal Court will start holding proceedings through videoconferencing on March 25 and New York City Family Court will start holding remote proceedings on March 26. In New York federal courts, the Southern District of New York postponed all jury trials scheduled to begin before April 27 until further notice. As of March 30, no SDNY matters will be heard at the Thurgood Marshall Courthouse with the exception of grand jury matters; the Daniel Patrick Moynihan Courthouse will remain open, but only to hear urgent criminal matters and matters seeking immediate relief pursuant to Rule 65(b) of the Federal Rules of Civil Procedure. SDNY judges have issued separate orders on the extension of deadlines in civil matters, adjourning conferences, and other matters pertaining to individual cases.
- The California Supreme Court and multiple state courts in the Bay Area and Southern California announced widespread closures. Alameda County courts are not accepting filings, with the exception of urgent filings such as TROs. Contra Costa county courts are not accepting filings, with the exception of emergency criminal and juvenile matters, until April 6. Fresno County courts specify March 17-April 3 will be treated as court holidays for the purpose of computing deadlines. For some cases, Los Angeles County has designated March 17-April 16 as a court holiday for the purpose of calculating deadlines. In California federal courts, the Northern and Eastern Districts of California suspended jury trials until at least May 1; the Central and Southern Districts suspended jury trials until April 13 and April 16, respectively.
In the age of COVID-19, potential litigation parties should look beyond traditional venue selection considerations and take into account how a particular court will continue to function in light of the crisis. With new orders emerging from state and federal courts on a daily basis, venue selection can become more complicated, volatile, and highly case-specific, but also present greater opportunity for control. And feeling more in control during today’s “new normal,” is a relief.
Please visit our COVID-19 Resource Center often for up-to-date information to help stay informed of the legal issues related to COVID-19.