Recently, the Georgia Supreme Court held that an out of state corporation cannot remove a case from a county where the tort cause of action originated by claiming that its registered office is its principal place of business within Georgia.  Pandora Franchising, LLC v. Kingdom Retail Group, LLLP, Case No. S16G0490 (Ga. Oct. 3, 2016).  Pandora Franchising was sued by Kingdom Retail Group in Thomas County Superior Court, alleging that Pandora “wrongfully withheld its consent to Kingdom’s bid to acquire a number of Pandora Franchises.”  Id. at *1.  Kingdom relied upon O.C.G.A. § 14-2-510(b)(4) (Georgia’s venue provisions for corporations), which establishes venue for tort actions against corporations “in the county where the cause of action originated.”  But, the statute allows removal to the county in Georgia where the defendant maintains its principal place of business, if venue is based solely on where the cause of action originated.  Relying on the removal provision of the foregoing statute, Pandora successfully persuaded the trial court to remove the case to Gwinnett County where its registered office was located.  Id. at *1-2.

However, the Georgia Court of Appeals reversed the trial court, taking judicial notice of Pandora’s certificate of authority to transact business in Georgia, which listed Maryland as where Pandora’s principal place of business is located.  The Supreme Court granted certiorari to determine whether the Court of Appeals “correctly construed O.C.G.A. § 14-2-510(b)(4) to mean that, in a claim in which the basis for venue is the allegation that the cause of action originated in the county where the claim was filed, only a corporation with its worldwide principal place of business, or ‘nerve center’ in Georgia has the right to remove the claim to the county in Georgia where that  principal place of business is located.”  Id. at *2.

Relying upon rules of statutory construction and federal law on establishing diversity jurisdiction, and dismissing claims by Pandora of unequal protection of foreign corporations, the Supreme Court held that the Georgia Assembly did not intend for out of state companies to claim their registered agent, or a satellite office for that matter, as a principal place of business if their “nerve center” was in fact in another state.  Id. at *4.  If the worldwide principal place of business of the company is not located in Georgia, that company is not given the benefit of removing a case.  Id. at *7.  To allow otherwise would enable manipulation and forum shopping by defendants, which was authorized by Georgia’s prior venue statute.  Id. at *10.  In short, Georgia’s Constitution delegated to the Assembly the authority to define venue as to corporations, foreign and domestic, and O.C.G.A. § 14-2-510(b)(4) is clear that removal is only allowed for those companies with a worldwide “nerve center” in Georgia if venue is originally based upon where the tort originated.  See id. at *14.

If you have further questions about this case or how it relates to your company, please contact Clinton Fletcher or any other attorney at Nall & Miller, LLP.

Clinton F. Fletcher, Esq.
cfletcher@nallmiller.com