April 11, 2018

Does Improper Removal Affect the Timeliness of Venue Motions?; Arkla Industries, Inc. v. Columbia Street Partners, Inc.

Category: Indiana Law Review | Author: | Share:

Plaintiffs frequently accuse defendants of delay, but courts don’t always see things the plaintiff’s way. But when a court does find that a defendant has wrongfully delayed proceedings, are there procedural consequences for co-defendants?

Columbia sued Centerpoint and Honeywell for damages based on environmental contamination in Warrick County. Centerpoint told Columbia that it may move to transfer venue. But before Centerpoint did so, Honeywell removed the case to federal court, alleging complete diversity. Honeywell’s notice of removal indicated that it had conferred with Centerpoint, which consented to the removal.

Columbia moved to remand the case back to state court. Centerpoint did not oppose the motion, and the district court granted it. When doing so, the district court imposed sanctions on Honeywell because it did not have a reasonable basis for seeking removal.

Once back in state court, Centerpoint moved to transfer venue to Vanderburgh County. Columbia objected, arguing that Centerpoint had helped delay the case for over nine months and that it should be estopped from seeking a different venue now. The trial court agreed with Columbia, pointing out that Centerpoint could have refused to consent to the removal, but did not. Centerpoint appealed.

On appeal, the Court started with this baseline—Warrick County was not a preferred venue, and Vanderburgh County was.

The question, therefore, is not whether transfer of this case to Vanderburgh County is improper because the case is already in a proper venue, but whether Centerpoint is entitled at this point in the litigation to have the case transferred to a preferred venue.

And while Columbia argued that the right to a preferred venue may be waived as a sanction for misconduct during the litigation, the Court found that this argument “misapprehends the plain language of the trial rules” because Centerpoint’s motivations and intent are “irrelevant” to whether it can move to transfer venue.

Transfer from a non-preferred venue to a preferred venue is mandatory if the movant meets the provisions of Trial Rules 12 and 75. … Thus, entitlement to a change of venue is a matter of timing not intent; if the movant makes a proper and timely motion, the trial court has no discretion to deny it. Trial Rule 12(H) states the circumstances under which a defense of improper venue may be waived. Alleged misconduct in the course of litigation is not one of those circumstances.

In this case, Centerpoint complied with the timeline set forth in these Rules. Therefore, the transfer to Vanderburgh County should have been automatic. The trial court “clearly erred” when it found otherwise.

Lesson:

Transfer of venue from a non-preferred to a preferred venue is mandatory, and a defendant’s motive or intent in delaying proceedings prior to requesting a change of venue is irrelevant.