Legislative Update: Venue Clauses in County Contracts No Longer Enforceable

This article follows up on an article from earlier this year about proposed legislation in Olympia that addressed venue for lawsuits against counties. 

That legislation, House Bill 1601, was drafted to address a common problem in public works contracting with Washington State counties.  Washington State counties have been including provisions in their construction contracts that require all disputes between the contractor and the county to be resolved in the home county that issued the contract.  These venue clauses present a problem for contractors because of the appearance of impropriety and associated challenges of litigating with counties in their home court.

House Bill 1601 was drafted to correct this problem and make the county venue clauses unenforceable.  If venue clauses are unenforceable, then contractors are allowed to take advantage of RCW 36.01.050, which provides that any person or entity commencing a lawsuit against a county may file a lawsuit in the county itself or in either of the two nearest judicial districts (which are often the two nearest counties).  As an example, a party suing King County could sue King County in either Snohomish or Pierce County under RCW 36.01.050.

The bill passed both the House and Senate this spring and was signed into law by Governor Jay Inslee.  The new law went into effect on July 25, 2015.  Below is the language of the new law, which was added to RCW 36.01.050:

Any provision of public works contract with any county that requires actions arising under the contract to be commenced in the superior court of the county is against public policy and the provision is void and unenforceable.  This subsection shall not be construed to void any contract provision requiring a dispute arising out of the contract to be submitted to arbitration.

Comment:  The new law represents a significant victory for public works contractors in Washington.  Public works contractors now have the option of being able to sue counties in an adjoining county without having to prove bias or prejudice and are able to receive the benefits of RCW 36.01.050 even if there is a venue clause in their contract with the county.

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