Where Can My Business File Suit? Venue Rules in Texas

Venue is not jurisdiction

Jurisdiction asks whether a court has power over the subject and the parties. Venue asks which county within Texas is the proper place for the trial. A Dallas County district court and a Harris County district court have the same jurisdiction; venue rules decide which one hears your case. Getting venue wrong does not void a judgment, but it does invite a motion to transfer and the delay that comes with it.

This article is about Texas state court venue. Whether the case belongs in state or federal court at all is a separate question, covered in state or federal court for a business case.

The general rule: section 15.002

Unless a mandatory or permissive exception applies, Civil Practice and Remedies Code section 15.002(a) allows suit in any of these counties:

1. the county in which all or a substantial part of the events or omissions giving rise to the claim occurred;
2. the county of the defendant's residence at the time 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. if none of those applies, the county where the plaintiff resided when the claim accrued.

The first option does most of the work in business cases. A contract negotiated, signed and performed in Dallas gives Dallas venue even if the defendant is based elsewhere. The hard cases are contracts performed in several counties, where "a substantial part" has to be argued on the facts. The plaintiff's own county is a fallback, not a first choice.

Section 15.002(b) adds a safety valve: a court may transfer a case from a proper county to another proper county for the convenience of the parties and witnesses and in the interest of justice, on a defendant's motion filed with or before the answer, if keeping the case would work an injustice to the movant and the balance of interests favors the other county. That ruling is not appealable.

Mandatory venue: rules that override the plaintiff's choice

Subchapter B of chapter 15 fixes venue for certain claims regardless of where else the general rule would allow suit. The ones that reach business disputes most often:

• Real property (§ 15.011). Suits to recover real property or an interest in it, for partition, to remove encumbrances or quiet title, or for damages to real property must be brought where all or part of the property is located. Commercial lease disputes about possession and many title fights fall here.
• Landlord-tenant (§ 15.0115). Disputes between a landlord and tenant arising from the lease go to the county where the premises are located.
• Major transactions (§ 15.020). In a transaction evidenced by a written agreement with a stated value of $1 million or more, other than personal, family or household matters, an action arising from the transaction must be brought in the county the parties agreed to in writing, and may not be brought in a county the agreement excludes. This is how venue clauses in large commercial contracts become binding, including for tort claims arising from the deal.

Where a mandatory provision applies and a party moves to transfer on that basis, the court must transfer. Mandatory venue can also be enforced by mandamus rather than waiting for an appeal after trial.

Permissive venue: more choices for the plaintiff

Subchapter C adds options a plaintiff may use but need not. For business cases the key one is section 15.035, contract in writing: if a person has contracted in writing to perform an obligation in a particular county, expressly naming the county or a definite place in it, suit on that obligation may be brought there or in the county of the defendant's domicile. A contract that says payment is due at the seller's office in Dallas gives a Dallas vendor Dallas venue against a Houston buyer. Consumer debt is treated differently under subsection (b).

Venue clauses in smaller contracts

Below the $1 million line, a clause that simply names a county for suits does not by itself make that county proper or improper under chapter 15; venue is set by statute, not by agreement, except where a statute says otherwise. Such a clause may still have effect in other ways, and a clause selecting another state's courts is analyzed as a forum-selection clause under a different body of law. Our contract says disputes go to another state explains when those clauses hold.

Multiple claims and defendants

Under section 15.005, if venue is proper for one defendant on a claim, it is proper for all defendants on all claims arising out of the same transaction, occurrence or series of transactions. Under section 15.006, venue proper as to one claim is proper as to other claims arising from the same facts. Counterclaims, cross-claims and third-party claims arising out of the same transaction do not need an independent venue basis (§ 15.062). Plaintiffs sometimes build venue around one properly placed defendant; defendants sometimes argue that a defendant was joined only to anchor venue.

Challenging venue

Under Texas Rule of Civil Procedure 86, an objection to improper venue is waived unless made by written motion filed before or with any other plea, pleading or motion except a special appearance. In practice the motion to transfer is filed with, or just before, the answer. The motion must name the county the movant contends is proper and the basis. The plaintiff then has the burden to support its venue facts with pleadings and affidavits; if it does, venue stays. If the court transfers, the case continues in the new county with its file. A ruling on venue is generally reviewed only after final judgment, except for mandatory venue, which may be reviewed by mandamus under section 15.0642.

Why it matters for the business

Venue decides which county's judges, local rules and jury pool the case gets, and how far your witnesses travel. A Dallas company forced to litigate in a distant county pays in time and travel for every hearing and deposition. The venue analysis belongs in the first conversation with counsel, both to pick the right county when filing and to catch a misfiled case within the Rule 86 window when defending. The timing of that window is set out in what happens when you are served.

Example

Suppose a Dallas general contractor signs a $2.5 million subcontract with an Austin steel fabricator. The subcontract says any suit must be brought in Travis County. The fabricator delivers late and the contractor sues in Dallas, where the project is and where it says the breach caused its losses. Because the agreement is a major transaction under section 15.020, the fabricator moves to transfer with its answer, and the court must send the case to Travis County. Had the subcontract been for $400,000 with the same clause, the analysis would run under section 15.002 and 15.035 instead, and Dallas, as the place of performance, would likely hold.

Tina Wysk represents Dallas businesses in contract disputes and construction and real estate litigation, where venue is often the first fight.