MTS

In this case plaintiffs brought a breach of contract action against a San Diego County transportation agency in the Superior Court of San Diego County. In response the transportation agency filed a compulsory cross-complaint against defendants, in which it alleged it overpaid plaintiffs $4 million. Plaintiffs then brought a motion to change venue under Code of Civil Procedure section 394.

In general, when an action is initiated by a local agency in the county where it operates, section 394 permits any defendant who is not a resident of the county to have venue transferred to a neutral county. Finding that cross-defendants may bring a motion under section 394, the trial court granted the motion to change venue. The transportation agency filed a petition for a writ of mandate in which it alleges the trial court erred in granting the motion.

We issued an order to show cause because there is a conflict in the cases as to whether cross-defendants may bring a motion under section 394 and there is no authority discussing the applicability of the statute when, as here, a local agency has brought a compulsory cross-complaint against a plaintiff. We conclude all cross-defendants,…