It really isn't genius at all. At least in my state, either party can object to the small claims status by simply sending a letter. Then it moves over to normal court with normal lawyers. Already you are out the small claims filing fee (yes, you have to pay the court to even bring a small claims case).

Once in normal court, you would need to hire a lawyer, and they would just find some local representation. At this point, you would probably withdraw the case because it isn't worth that investment.

But suppose you kept going. Their local council is going to proxy their attempts to change venue to where they are located. Unless you had a really compelling argument, they would probably win the change of venue. Now you need to find another lawyer somewhere else, and it is probably an expensive locale like New York or LA where they have a firm on retainer. Still want to push the case? Me neither.

By all means, try the small claims route. But don't think for one second that it is a slam dunk.