Commercial Litigation Blog

   In 2004, the Virginia General Assembly changed Section 8.01-262, the “venue” statute, so as to require a showing that a defendant “regularly conducts substantial business activity” in a chosen venue when a plaintiff elects to bring their lawsuit in a different city or county from where the accident happened or where the defendant lives. In the years following this amendment, the meaning of “regularly conducting substantial business activity” has been subject to different interpretations.

   A recent decision by Judge Melvin Hughes of the City of Richmond Circuit Court provides some guidance as to the type of factual support courts are looking for to establish that a defendant is “regularly conducting substantial business activity”. Duncan v. Brannock, et al. involved a legal malpractice claim against a Staunton, Virginia law firm filed in the City of Richmond Circuit Court. The defendant law firm objected to the case being filed in Richmond. In opposing the law firm’s motion to have the case transferred, the plaintiff offered evidence that one of the law firm’s partners conducted 40% of his practice in worker’s compensation which involved appearances before the Virginia Worker’s Compensation Commission in Richmond, as well as appearances before the Virginia Court of Appeals, also based in Richmond. In addition, the law firm made occasional appearances in the United States Court of Appeals-Fourth Circuit, the Virginia Supreme Court, and the United States District Court for the Eastern District of Virginia, all based in the City of Richmond.

Judge Hughes pointed out that the time frame for determining whether a defendant regularly conducts substantial business activity is at the time the lawsuit is filed. He held that the above recited activities of the defendant law firm were insufficient to establish that they regularly conducted business in Richmond. Citing an earlier Virginia Supreme Court case, Meyer v. Brown, he stated that “regularly” meant “doing business in a steady, methodical, uniform way”. Based upon the evidence of the law firm’s business activity within the City of Richmond, these contacts were simply not regular and systematic enough for the case to remain in the Richmond Circuit Court, and the defendant’s motion to transfer was granted.