Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—Wash. Sup. Ct.: Out-of-state consumers can bring Washington CPA claims, (Dec 14, 2015)

By Greg Hammond, J.D.

The Supreme Court of Washington has determined that an out-of-state consumer may bring a claim against a Washington corporate defendant for allegedly deceptive acts and against an out-of state defendant for the allegedly deceptive acts of its in-state agent. The court reasoned that the defendants’ proposed geographic limitations to the Washington Consumer Protection Act (CPA) would defeat the purposes of the statute and would not be supported the language of the CPA (Thornell v. Seattle Service Bureau, Inc., December 10, 2015, Johnson, C.).

A Texas resident filed suit against Seattle Service Bureau Inc. (SSB), a company based in Washington, and State Farm Mutual Automobile Insurance Company, a company based in Illinois, claiming that supposed debt collection letters she received from SSB, pursuant to a referral of unliquidated subrogation claims by State Farm, constituted deceptive acts in violation of the Washington CPA. After the case was removed to the federal district court in Seattle, the district court certified two questions to the Washington Supreme Court: (1) whether the Washington CPA creates a cause of action for a plaintiff residing outside Washington to sue a Washington corporate defendant for allegedly deceptive acts; and (2) whether the Washington CPA creates a cause of action for an out-of-state plaintiff to sue an out-of-state defendant for the allegedly deceptive acts of its in-state agent.

The court answered both questions in the affirmative, finding first that the Washington CPA allows claims for an out-of-state plaintiff against all persons who engage in unfair or deceptive acts that directly or indirectly affect the people of Washington. In reaching this conclusion, the court gave effect to the state legislature’s direction that the CPA “shall be liberally construed” and that “commerce” includes “any commerce directly or indirectly affecting the people of the state of Washington.” The court rejected the defendants’ proposed geographic limitations, finding that those limitations would defeat the Washington CPA’s purposes of protecting the public and fostering fair and honest competition and that the proposed limitations are not supported by the language of the statute.

Lastly, the court concluded that an out-of-state plaintiff may bring a Washington CPA claim against an out-of-state defendant for the allegedly deceptive acts of its in-state agent. The court reasoned that a principal cannot send agents into a state to commit CPA violations in order to avoid liability by virtue of its out-of-state residence.

The case is No. 91393-5.

Attorneys: Michael Murphy (Bailey & Glasser LLP) for Sandra C. Thornell. Jeffrey I. Hasson (Davenport & Hasson LLP), Daniel L. Syhre (Betts, Patterson & Mines, P.S.) and Cornelius M. Murphy (Winston & Strawn) for Seattle Service Bureau, Inc. and State Farm Mutual Automobile Insurance Co.

Companies: Seattle Service Bureau, Inc.; State Farm Mutual Automobile Insurance Co.

Cases: StateUnfairTradePractices WashingtonNews