Corporate Venue Statute Applies to LLCs: Alabama Supreme Court Overrules WMS and Aligns LLC Venue with § 6-3-7

Introduction

In Ex parte Phillip H. Rivers, Steven Nobles, Todd Martin, Stan Roberts, Laurie Dungan, Macy Matthews-Smith, and Dylan Kemper, the Supreme Court of Alabama granted a petition for writ of mandamus and clarified a long-simmering split in Alabama venue law. The Court held that § 6-3-7, Ala. Code 1975—the corporate venue statute—governs actions against limited liability companies (LLCs), not § 6-3-2 (the statute governing venue for actions against individuals). To the extent prior cases such as Ex parte WMS, LLC, 170 So. 3d 645 (Ala. 2014), suggested otherwise, they are overruled.

The underlying dispute arises from a declaratory-judgment action filed in Mobile County by former employees and associates of Warren Averett, LLC and Warren Averett Companies, LLC. The plaintiffs sought a declaration that certain noncompete clauses were invalid. The defendants moved to transfer venue to Madison County under § 6-3-2. The Mobile Circuit Court granted the motion. The Alabama Supreme Court intervened, holding that the wrong venue statute had been applied and directing the Mobile Circuit Court to vacate its transfer order.

Summary of the Opinion

Justice Lewis, writing for the Court, concluded that:

• Mandamus is the proper vehicle to challenge a change-of-venue order.
• The core question was which venue statute applies to suits against LLCs.
• Relying on Justice Mitchell’s historical-statutory analysis in Ex parte Alabama Power Co., 369 So. 3d 662 (Ala. 2022) (concurring in the result), and the Court of Civil Appeals’ synthesis in Ex parte Honda Development & Manufacturing of Alabama, LLC, 383 So. 3d 394 (Ala. Civ. App. 2023), the Court held that § 6-3-7 applies to LLCs.
• To the extent prior decisions—specifically Ex parte WMS, LLC—treated LLCs like individuals for venue purposes and applied § 6-3-2, they are overruled.
• Because the Mobile Circuit Court granted the venue transfer based on the wrong statute, the petitioners had a clear legal right to relief. The Court granted the petition and issued the writ directing the trial court to vacate its transfer order.

Chief Justice Stewart and Justices Wise, Sellers, Cook, and McCool concurred. Justice Shaw concurred specially, explaining the historical split and endorsing the Court’s resolution in favor of § 6-3-7. Justice Bryan concurred in the result. Justice Mendheim recused.

Case Background and Procedural Posture

The plaintiffs—seven individuals, including lead plaintiff Phillip H. Rivers—filed a declaratory-judgment action in the Mobile Circuit Court on January 24, 2025 (later amended to add additional plaintiffs). The complaint alleged, among other things, that Rivers worked for Warren Averett in its Montgomery office (2012–2015) and then in its Mobile office (2015 until termination), signed noncompete clauses in 2018, left the firm in November 2024, and went to work for BMSS, LLC in Mobile. The plaintiffs alleged that a substantial part of the events or omissions giving rise to their claims occurred in Mobile County and that the defendants do business by agent there, asserting venue under § 6-3-7.

The defendants moved to change venue to Madison County, invoking § 6-3-2 and arguing that no member of Warren Averett resides in Mobile County, while the firm has an office and members in Madison County. The Mobile Circuit Court granted the motion on April 18, 2025. The plaintiffs petitioned the Alabama Supreme Court for a writ of mandamus to vacate the transfer order.

Note: The opinion recites a March 18, 2024 filing date for the venue motion; that appears to be a typographical error given the surrounding 2025 dates.

Standard of Review

A petition for writ of mandamus is the appropriate mechanism to challenge a venue transfer. The writ is an extraordinary remedy requiring a showing of:

• a clear legal right to the relief sought;
• an imperative duty upon the respondent to act, coupled with a refusal;
• absence of another adequate remedy; and
• properly invoked appellate jurisdiction.

The Court cited Ex parte Children’s Hospital of Alabama, 931 So. 2d 1 (Ala. 2005), Ex parte Sawyer, 892 So. 2d 898 (Ala. 2004), Ex parte Premier Plastic Surgery, P.C., 372 So. 3d 195 (Ala. 2022), Ex parte Blue Cross & Blue Shield of Alabama, 321 So. 3d 682 (Ala. 2020), and Ex parte Scarborough (Ala. 2025) for these principles.

Analysis

Precedents Cited and Their Influence

The Court’s analysis sits atop a contested line of authority regarding which venue statute applies to LLCs:

• Earlier cases applying § 6-3-2 to LLCs:
  • Ex parte Miller, Hamilton, Snider & Odom, LLC, 942 So. 2d 334 (Ala. 2006), reasoned that § 6-3-2 (individual defendant venue) controlled for LLCs, analogizing them to partnerships.
  • Ex parte WMS, LLC, 170 So. 3d 645 (Ala. 2014), followed Miller and applied § 6-3-2.
• Later cases applying or assuming § 6-3-7 for LLCs:
  • Ex parte J & W Enterprises, LLC, 150 So. 3d 190 (Ala. 2014) (no dispute on venue; applied § 6-3-7).
  • Ex parte Engineering Design Group, LLC, 200 So. 3d 634 (Ala. 2016) (venue undisputed and any challenge abandoned, but applied § 6-3-7 framework).
  • Ex parte Road Gear Truck Equipment, LLC, 300 So. 3d 1101 (Ala. 2019) (plurality) (treated § 6-3-7 as governing corporate defendants; applied in an LLC context).
• The split acknowledged in Ex parte Alabama Power Co., 369 So. 3d 662 (Ala. 2022):
  • Main opinion applied § 6-3-2 to an LLC, citing Miller and WMS, while not resolving the tension.
  • Justice Mitchell’s concurrence in the result performed a detailed historical and structural statutory analysis, concluding § 6-3-7 should govern LLC venue. He emphasized that an LLC is a separate legal entity (see § 10A-5A-1.04(a)) whose members are not jointly and severally liable (§ 10A-5A-3.01), making the “individual” venue statute implausible, and that the term “corporation” in § 6-3-7 historically encompassed artificial legal persons capable of continuous existence created by positive law.
• Ex parte Honda Development & Manufacturing of Alabama, LLC, 383 So. 3d 394 (Ala. Civ. App. 2023), surveyed the conflict and concluded that later Supreme Court cases applying § 6-3-7 controlled over earlier partnership-analogy decisions, especially given Title 10A’s treatment of LLCs as separate legal entities.

Today’s opinion expressly adopts the reasoning of Justice Mitchell’s special writing in Alabama Power and the Civil Appeals court’s analysis in Honda, and it explicitly overrules Ex parte WMS, LLC to the extent it applied § 6-3-2 to LLCs.

Legal Reasoning

The Court’s reasoning unfolds along several interlocking lines:

• Statutory text and structure:
  • Alabama’s venue statutes do not explicitly mention LLCs. The candidates are § 6-3-2 (actions against individuals), § 6-3-6 (unincorporated organizations/associations), and § 6-3-7 (corporations).
  • Title 10A defines an LLC as a separate legal entity (§ 10A-5A-1.04(a)), with members not jointly and severally liable for entity obligations (§ 10A-5A-3.01). A suit against an LLC is not a suit against its members “in form or substance.”
  • Viewed structurally, §§ 6-3-6 and 6-3-7 are designed to cover the universe of business entities: if not an “individual,” an entity is either a corporation or an unincorporated association for venue purposes.
• Historical meaning and legislative continuity:
  • Following the interpretive principle that statutory terms carry their ordinary legal meaning at enactment, the Court looked to the historical usage of “corporation” in venue statutes dating back to 1896. Historically, “corporation” embraced artificial legal persons created by positive law with continuity of existence—attributes LLCs possess.
  • The 1999 amendment to § 6-3-7 reshaped the corporate venue options but did not alter which entities count as “corporations” for venue purposes.
• Practical and doctrinal coherence:
  • Treating LLCs as “individuals” for venue invites inconvenience and forum manipulation because LLCs may have members residing statewide or even outside Alabama.
  • Aligning LLCs with § 6-3-7 promotes predictability and reflects the economic reality that LLCs function as distinct juridical entities akin to corporations for litigation and venue.
• Resolving the split and overruling WMS:
  • Because lower courts had conflicting guidance (some cases applying § 6-3-2; others § 6-3-7), the Court “squarely” addresses the issue here and holds that § 6-3-7 governs LLC venue. Ex parte WMS, LLC, is overruled to the extent it held otherwise. Although not expressly named, this logic effectively displaces Ex parte Miller’s rationale as well.

Applying these conclusions to the case, the trial court’s transfer order was predicated on § 6-3-2. Because that was the wrong statute, the order must be vacated. The Supreme Court granted the mandamus and directed the Mobile Circuit Court to vacate its transfer order.

Impact and Prospective Significance

The decision redefines venue practice across Alabama for cases involving LLC defendants:

• Clear rule for LLC venue:
  • Venue in actions against LLCs is governed by § 6-3-7, the corporate venue statute. This offers multiple proper venues, including:
    • the county where a substantial part of the events or omissions giving rise to the claim occurred;
    • the county of the entity’s principal office in Alabama;
    • the county where the plaintiff resided when the claim accrued if the entity does business by agent there; and
    • other prongs in § 6-3-7 that are case-type specific.
  • Member residence is no longer a foundation for venue against an LLC.
• Litigation strategy:
  • Plaintiffs can more confidently file in the county of operative facts or where the LLC does business by agent.
  • Defendants must recalibrate transfer motions to target § 6-3-7 criteria and, where appropriate, argue forum non conveniens rather than relying on member residency.
• Reduced forum-shopping and increased predictability:
  • The new rule curbs the practice of using scattered member residences to seek transfers to distant or less connected forums.
• Noncompete and employment litigation:
  • Many employment and restrictive covenant disputes will remain in the counties where the work was performed and the alleged contractual breaches occurred—consistent with § 6-3-7’s “substantial part of the events” prong.
• Guidance for lower courts:
  • Trial courts must apply § 6-3-7 to LLC defendants and may still consider forum non conveniens if multiple § 6-3-7 venues are proper but another is more convenient.

Complex Concepts Simplified

• Mandamus:
  An extraordinary appellate remedy used to correct a clear legal error by a trial court when no other adequate remedy (like a direct appeal) exists. Venue transfer orders are commonly reviewed by mandamus.
• Venue:
  The proper county within a state where a civil suit may be filed and tried. Different statutes specify venue for different types of defendants and claims.
• LLC vs. Corporation (for venue):
  An LLC is a separate legal entity whose members are not personally liable for its obligations. For venue purposes, Alabama now treats LLCs like corporations under § 6-3-7, not like individuals under § 6-3-2.
• “Does business by agent”:
  A company transacts business in a county through employees or agents; if so, § 6-3-7 often permits venue there.
• “Substantial part of the events or omissions”:
  Venue lies where a meaningful portion of the acts or omissions giving rise to the claim occurred. This focuses on where the operative facts unfolded, not merely where parties reside.
• Overruling precedent:
  When the Supreme Court expressly rejects a prior holding, that prior rule no longer applies. Here, Ex parte WMS, LLC is overruled to the extent it applied § 6-3-2 to LLCs.
• Forum non conveniens:
  Even when venue is proper, a court may transfer a case to a more convenient county in the interest of justice and convenience of parties and witnesses. This doctrine remains available independent of the venue statute applied.

Practice Pointers

• Plead venue against LLCs under § 6-3-7. Identify the relevant prongs: substantial events in the county, principal office location, plaintiff’s residence plus “does business by agent,” etc.
• Defense counsel should abandon member-residence arguments under § 6-3-2 and tailor venue challenges to § 6-3-7 criteria. Consider forum non conveniens when multiple § 6-3-7 venues are available.
• Support or oppose venue with affidavits showing where the business transacts by agent, where the operative events occurred, and where the principal office is located.
• Be mindful of multiple-plaintiff nuances in § 6-3-7 when joinder is at issue; each plaintiff typically needs a venue basis unless statutory exceptions apply.

Concurring Opinion Highlights

Justice Shaw’s special concurrence provides helpful context:

• He catalogs the two conflicting lines of authority: Miller/WMS applying § 6-3-2 versus later cases invoking § 6-3-7.
• He notes that some § 6-3-7 applications were perfunctory or undisputed but recognizes that the issue is now squarely presented.
• He agrees that § 6-3-7 is the correct statute going forward, and he clarifies that Ex parte Alabama Power Co. did not resolve the split at the time.

Unresolved or Cautionary Notes

• While today’s opinion overrules WMS, LLC and embraces § 6-3-7 for LLCs, litigants should not assume that every non-corporate entity is treated identically. The logic strongly favors applying § 6-3-7 to other separate legal entities, but the Court’s holding is expressly about LLCs.
• The trial court must apply § 6-3-7 on remand. The Supreme Court did not undertake a fresh merits analysis of which § 6-3-7 prong governs in this case, likely because the transfer was premised on the wrong statute (and the plaintiffs alleged substantial events in Mobile and “does business by agent” in Mobile).
• Forum non conveniens remains a distinct tool and may be raised independently of a venue argument under § 6-3-7.

Conclusion

Ex parte Rivers definitively resolves Alabama’s venue statute for actions against LLCs. The Supreme Court adopts the corporate venue statute, § 6-3-7, and overrules contrary strands of precedent, most notably Ex parte WMS, LLC. This aligns venue doctrine with the modern statutory treatment of LLCs as separate legal entities and conforms to the historical meaning of “corporation” within Alabama’s venue scheme.

Practically, the decision stabilizes venue for LLC litigation by focusing on where the company does business, where its principal office is located, where the operative events occurred, or where a plaintiff resided at accrual if the entity does business by agent there. It removes member-residence from the venue calculus, reducing forum-shopping and adding predictability. For the parties in this case, the immediate consequence is that the Mobile Circuit Court must vacate its transfer order and proceed under the correct venue statute.

Key takeaway: In Alabama, suits against LLCs are governed by § 6-3-7, not § 6-3-2. That clear rule will shape venue arguments and outcomes in business, employment, and commercial disputes across the state.