No. 74-1481
Argued: February 23, 1976Decided: May 19, 1976
515 S. W. 2d 354, affirmed.
BRENNAN, J., delivered the opinion of the Court, in which STEWART, WHITE, MARSHALL, BLACKMUN, POWELL, and STEVENS, JJ., joined. BURGER, C. J., filed an opinion concurring in the judgment, in which REHNQUIST, J., joined, post, p. 646.
Joel W. Westbrook argued the cause for appellant. With him on the brief was Matt C. C. Bristol III.
W. V. Dunnam, Jr., argued the cause for appellee. On the brief was Fred J. Horner III. [425 U.S. 637, 638]
MR. JUSTICE BRENNAN delivered the opinion of the Court.
Appellant, American Motorists Insurance Co., is an Illinois corporation authorized to do business in Texas with its principal office in Dallas County. As such, it is a “person” and an “inhabitant” of Texas having its “domicile” in Dallas County for the purposes of Texas’ general venue statute, Tex. Rev. Civ. Stat., Art. 1995 (1964). Snyder v. Pitts, 241 S. W. 2d 136 (Tex. 1951). Article 1995 provides, with specified exceptions: “No person who is an inhabitant of this State shall be sued out of the county in which he has his domicile . . . .” The exceptions pertinent to this case are Exceptions 23 and 27 of Art. 1995. Under Exception 23, suits against domestic corporations may be brought outside the domiciliary county upon proof by the plaintiff at a preliminary venue hearing, not only that the Texas corporation has an agency or representative in the county of suit and that plaintiff resided in or near such county at the time his cause of action arose, but also, by proof by a preponderance of the evidence, that he has a cause of action. Victoria Bank & Trust Co. v. Monteith, 158 S. W. 2d 63 (Tex. Comm’n App. 1941). Exception 27, on the other hand, allows suit against foreign corporations, including those like appellant, that have qualified to do business in Texas, to be brought “in any county where such company may have an agency or representative,” and the plaintiff is not required to prove, by a preponderance of the evidence, the elements of his cause of action at the preliminary venue hearing. 1 The question for decision [425 U.S. 637, 639] in this case, therefore, is whether Exception 27 effects an invidious discrimination against foreign corporations, constituting Exception 27 repugnant to the Equal Protection Clause of the Fourteenth Amendment.
Appellee Starnes, a resident of McLennan County, sued appellant in the District Court for McLennan County under the uninsured-motorist provisions of a liability insurance policy issued to appellee by appellant. The automobile collision out of which this cause of action and appellee’s damages arose occurred in Tarrant County. Appellant filed a plea of privilege to be sued in the county of its residence, Dallas County. A plea of privilege [425 U.S. 637, 640] is a verified pleading by which, under Texas practice, a defendant challenges the venue of a suit. Tex. Rule Civ. Proc. 86. Appellee filed a controverting plea, a verified pleading by which, under Texas practice, the plaintiff states specifically the grounds relied upon to confer venue under one or more exceptions in Art. 1995. Ibid. The controverting plea asserted venue by virtue of both Exceptions 23 and 27, but at the preliminary venue hearing, appellee relied exclusively upon Exception 27 and a stipulation of the parties that appellant was a foreign corporation transacting business in Texas and that it had a local agent in McLennan County. Although appellant’s counsel inquired “if Plaintiff has any evidence other than that contained in the stipulation” and appellee’s counsel answered: “Not at this time,” App. 15, appellee was not required by the court, nor did he attempt, to offer evidence as to any of the elements of his cause of action. The District Court overruled appellant’s plea of privilege.
Appellant’s appeal to the Court of Civil Appeals of Texas presented the single question whether Exception 27 “is unconstitutionally discriminatory because it permits a foreign corporation to be venue bound without [plaintiff’s] proving a cause of action, but only . . . the existence within the venue county of defendant foreign corporation’s agent as compared with the requirement that a Texas domestic corporation can be venue bound under Subdivision 23 only if the existence of a cause of action is demonstrated.” 515 S. W. 2d 354, 355 (1974). The Court of Civil Appeals, relying upon a decision of the Texas Supreme Court, Commercial Ins. Co. v. Adams, 369 S. W. 2d 927 (1963), 2 held that “exception 27, Article [425 U.S. 637, 641] 1995 is not void and unconstitutional under the 14th Amendment to the United States Constitution as affording a wider venue action against foreign corporations [425 U.S. 637, 642] than is afforded against domestic corporations under Section 23 of the same Article.” 515 S. W. 2d, at 355. The Supreme Court of Texas dismissed appellant’s application for writ of error “for want of jurisdiction.” We noted probable jurisdiction, 423 U.S. 819 (1975). 3 We affirm.
We are unable to say that the treatment of foreign corporations effected by Exception 27 constitutes discrimination repugnant to the Equal Protection Clause. The gist of appellant’s argument is that, because Exception 27 does not require that plaintiff demonstrate the existence of his cause of action, there was “[d]enied to appellant . . . a virtually unique opportunity afforded to domestic corporations, to preview its adversary’s case in chief (except as to the extent of damages); to cross-examine plaintiff’s witnesses as to the nature and existence of the alleged cause of action; to obtain from the Court a venue ruling which would, under the circumstances, be tantamount to a judicial assessment of plaintiff’s cause of action; to nip a frivolous or baseless claim `in the bud,’ before it could escalate into a lengthy, complex and time-consuming lawsuit; and finally, to obtain, [425 U.S. 637, 643] by demanding a jury trial of the venue facts, either an early trial on the merits or at least a preliminary assessment by a jury of the plaintiff’s credibility.” 4 It was suggested at oral argument, however, that the actual burden imposed upon the plaintiff falls far short of proving his cause of action by a preponderance of the evidence. While Texas case law seems to reject proof of a prima facie case as sufficient, see Victoria Bank & Trust Co. v. Monteith, 158 S. W. 2d, at 66-67, the parties suggest that in practice the venue proceedings are usually truncated and that prima facie proof is regarded as meeting the plaintiff’s burden. 5 In that circumstance the domestic [425 U.S. 637, 644] corporate defendant would not appear to enjoy any appreciable advantage denied the foreign corporate defendant. At most the plaintiff suing a domestic corporation is subjected to some measure of discovery. But Texas has a summary judgment procedure, Tex. Rule Civ. Proc. 166-A, and broad pretrial discovery procedures, Rules 167-170, 177a, 186-215c, 737; and they are equally available to the foreign corporate defendant. We cannot say in that circumstance that the foreign corporate defendant suffers any discrimination in being denied comparable discovery available to the domestic corporation at a preliminary venue hearing. For, as the Court said in an analogous context: “[I]t is fundamental rights which the Fourteenth Amendment safeguards and not the mere forum which a State may see proper to designate for the enforcement and protection of such rights. Given therefore a condition where fundamental rights are equally protected and preserved, it is impossible to say that the rights which are thus protected [425 U.S. 637, 645] and preserved have been denied because the State has deemed best to provide for a trial in one forum or another. It is not under any view the mere tribunal into which a person is authorized to proceed by a State which determines whether the equal protection of the law has been afforded, but whether in the tribunals which the State has provided equal laws prevail.” Cincinnati Street R. Co. v. Snell, 193 U.S. 30, 36 -37 (1904). We are not confined to the language of the statute under challenge in determining whether that statute has any discriminatory effect. Just as a statute nondiscriminatory on its face may be grossly discriminatory in its operation, Williams v. Illinois, 399 U.S. 235, 242 (1970); Griffin v. Illinois, 351 U.S. 12, 17 n. 11 (1956), so may a statute discriminatory on its face be nondiscriminatory in its operation. There being no discriminatory effect achieved by the aspects of the Texas venue provisions calling for establishment of a cause of action, we have no difficulty in concluding that appellant’s equal protection challenge to Exception 27 must be rejected. 6
Beyond the superficial requirement of proof of a cause of action, the Texas venue statute, as noted, provides [425 U.S. 637, 646] broader venue geographically for suits against foreign corporations than for suits against domestic corporations. Appellant, however, does not challenge this difference. See Tr. of Oral Arg. 4-5. In any event, proof of cause of action aside, under Texas law, a domestic corporation may be sued in the plaintiff’s county of residence provided the corporation has an agency or representative in that county. The situation of appellant is precisely the same. It is undisputed that the appellant was sued in the plaintiff’s county of residence and that appellant had an agent in that county.
