Code of Civil Procedure Section 394 - Jurisdiction

The purpose of section 394(a), is to guard against local bias that may exist in favor of litigants within a county as against those from without the county, and to ensure that both parties have a trial on neutral territory. (Westinghouse Electric Corp. v. Superior Court (1976) 17 Cal. 3d 259, 266 [131 Cal. Rptr. 231, 551 P.2d 847] (Westinghouse Electric Corp.).) Specifically, the local bias protected against is "prejudice resulting from citizens in the county perceiving the trial outcome as tied to their economic interests." (Nguyen v. Superior Court (1996) 49 Cal. App. 4th 1781, 1790 [57 Cal. Rptr. 2d 611] (Nguyen).) While "there is a substantial risk of prejudice in favor of a local governmental entity," the Legislature determined that such prejudice "will be so mitigated that a change of venue normally will not be needed when defendant corporation is 'doing business' in the county." (Westinghouse Electric Corp., supra, 17 Cal. 3d at p. 271.) When a corporate defendant is viewed as being closely associated with the community, it is less likely that local bias will occur. (Ibid.) "[E]ven though taxpayer jurors may be predisposed in favor of [the local governmental entity] because of the potential effect on their taxes, they may overcome that understandable bias if they realize that unjustly favoring [the local governmental entity] will injure a local business and its contribution to the community economy." ( Id. at p. 272.) section 394 provide as follows: "(a) An action or proceeding against a county, or city and county, a city, or local agency, may be tried in such county, or city and county, or the county in which such city or local agency is situated, unless the action or proceeding is brought by a county, or city and county, a city, or local agency, in which case it may be tried in any county, or city and county, not a party thereto and in which the city or local agency is not situated. Except for actions initiated by the district attorney pursuant to Section 11350, 11350.1, 11475.1, or 11476.1 of the Welfare and Institutions Code, any action or proceeding brought by a county, city and county, city, or local agency within a certain county, or city and county, against a resident of another county, city and county, or city, or a corporation doing business in the latter, shall be, on motion of either party, transferred for trial to a county, or city and county, other than the plaintiff, if the plaintiff is a county, or city and county, and other than that in which the plaintiff is situated, if the plaintiff is a city, or a local agency, and other than that in which the defendant resides, or is doing business, or is situated. Whenever an action or proceeding is brought against a county, city and county, city, or local agency, in any county, or city and county, other than the defendant, if the defendant is a county, or city and county, or, if the defendant is a city, or local agency, other than that in which the defendant is situated, the action or proceeding must be, on motion of the said defendant, transferred for trial to a county, or city and county, other than that in which the plaintiff, or any of the plaintiffs, resides, or is doing business, or is situated, and other than the plaintiff county, or city and county, or county in which such plaintiff city or local agency is situated, and other than the defendant county, or city and county, or county in which such defendant city or local agency is situated; provided, however, that any action or proceeding against the city, county, city and county, or local agency for injury occurring within the city, county, or city and county, or within the county in which such local agency is situated, to person or property or person and property caused by the negligence or alleged negligence of such city, county, city and county, local agency, or its agents or employees, shall be tried in such county, or city and county, or if a city is a defendant, in such city or in the county in which such city is situated, or if a local agency is a defendant, in such county in which such local agency is situated. . . . "(b) Any court in a county hereinabove designated as a proper county, which has jurisdiction of the subject matter of the action or proceeding, is a proper court for the trial thereof." This statute has been characterized as " 'complicated' " and a " 'mass of cumbersome phraseology.' " ( County of San Bernardino v. Superior Court (1994) 30 Cal. App. 4th 378, 380 [35 Cal. Rptr. 2d 760].) the extent to which section 394 applies to cross-complaints was considered in City of Chico v. Superior Court (1979) 89 Cal. App. 3d 187 [152 Cal. Rptr. 380] (City of Chico). In City of Chico, the plaintiffs filed an action in the San Francisco County Superior Court against Southern Pacific Transportation Company (SP), seeking damages arising from a vehicle collision that occurred in the City of Chico (Chico), County of Butte (Butte). SP filed a cross-complaint for indemnity, contribution and declaratory relief against Chico and Butte, alleging that these entities were responsible for the plaintiffs' injuries. (Id. at pp. 188-189.) Chico and Butte sought a change of venue to the Butte County Superior Court, under the "home county" venue provision of section 394(a), which provides that " 'any action or proceeding against the city, county, city and county, or local agency for injury occurring within the city, county, or city and county, or within the county in which such local agency is situated, to person or property or person and property caused by the negligence or alleged negligence of such city, county, city and county, local agency, or its agents or employees, shall be tried in such county, or city and county, or if a city is a defendant, in such city or in the county in which such city is situated, or if a local agency is a defendant, in such county in which such local agency is situated.' " (City of Chico, supra, 89 Cal. App. 3d at p. 189, quoting former 394, subd. (1) [now 394(a)].) In upholding the denial of Chico's and Butte's venue motion, City of Chico held that the language of section 394 only applies to complaints, and does not extend to cross-complaints against local government. (City of Chico, supra, 89 Cal. App. 3d at pp. 188-192.) City of Chico was discussed and convincingly refuted some years later in Ohio Casualty Ins. Group, which concluded that the City of Chico court's interpretation of section 394 to exclude cross-complainants and cross-defendants from the benefits of the statute was erroneous. (Ohio Casualty Ins. Group, supra, 30 Cal. App. 4th at p. 451.)