Ronald . arpenter
Supreme Court Clark
CHIEFJUS leE
IN THE SUPREME COURT OF THE STATE OF WASHINGTON
CERTIFICATION FROM THE UNITED )
STATES DISTRICT COURT FOR ) No. 91393-5
THE ·wESTERN DISTRlCT OF )
WASHINGTON )
)
IN ) En Bane
)
SANDRA C. THORNELL, on behalf of )
herself and an
others similarly situated, )
)
Plaintiff, )
)
v: )
)
SEATTLE SERVICE BUREAU, INC. d/b/a)
NATIONAL SERVICE BUREAU, INC., )
andSTATEFARMMUTUAL )
AUTOMOBILE INSURANCE COMPANY,)
)
Defendants. )
·--·--·-·-----·---- ---
____ ) Filed DEC 1 0 2015
~TOHNSON, J..-..-This case involves two certified questions from the United
States Distri'ct Court for the vVestern District of Washington. First, we are asked to
determine whether the Washington Consumer Protection Act (CPA), chapter 19.86
RCW) allows a cause of action for a plaintiff residing outside Washington to sue a
Washington corpotatedefeiH:lb,nt for allegedly deceptive acts. Second, we are asked
" " "
Thornell v. Seattle Serv. Bureau, Inc., No. 91393-5
to determine whether the CPA supports 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 United States District Court noted an absence of Washington case
law providing guidance on these issues. We answer both certified questions in the
affirmative.
FACTS AND PROCEDURAL HISTORY
Plainti±I in this putative class action is a Texas resident. Plaintiff alleges she
received deceptive debt collection letters from defendant Seattle Service Bureau
Inc. (SSB), a corporation with its principal place of business in Washington,
pursuant to the referral of unliquidated subrogation claims to SSB by State Farm
Mutual Automobile Insurance Company, a corporation with its principal place of
business in Illinois. Plaintiff alleges these letters constitute CPA violations by both
SSB and State Farm as its principal. Plaintiff asserts she incurred damages caused
by the alleged deceptive acts.
The general facts of this case are agreed to as part of the certification.
Plaintiffs son was involved in a motor vehicle collision in San Antonio, Texas,
with a motorist insured by State Farm. As a result of the accident, State Farm paid
for damages or repairs to the State Farm insured vehicle. State Farm attempted to
pursue an unliquidated claim based on a subrogated interest from its insured in the
amount of$9,126.18. Plaintiff received three letters about this claim at her home in
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Thornell v. Seattle Serv. Bureau, Inc., No. 91393-5
San Antonio. According to plaintiff, these letters were deceptive because they
suggested that the sum was the "balance due" on a "debt" rather than "a potential,
unliquidated claim based on a subrogated interest from its insured." Class Action
Compl. at 4~ 5. Plaintiff became concerned about her credit rating and enrolled in a
credit monitoring program. Plaintiff also sought and retained counsel in regard to
this matter.
Plaintiff filed a class action complaint on September 14, 2014, in King
County Superior Court, claiming the letters violated the CPA. Plaintiff also made a
claim for unjust enrichment Plaintiff named two defendants: SSB and State Farm.
SSB is a Washington corporation with its headquarters located in Bothell,
Washington. State Farm is an Illinois corporation.
State Farm removed the class action complaint to the United States District
Court for the Weste~n District of Washington. In the United States District Court,
State Farm and SSB filed motions to dismiss and motions to strike plaintiffs class
action complaint, claiming the CPA does not apply to claims made by a plaintiff
who is not a Washington citizen. The United States District Court dismissed
plaintiff's claims for unjust enrichment, and certified two questions to this court
No decision has been made on class certification.
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Thornell v. Seattle Serv. Bureau, Inc., No. 91393-5
CERTIFIED QUESTIONS
1. Does the Washington Consumer Protection Act create a cause of
action for a plaintiff residing outside Washington to sue a
Washington corporate defendant for allegedly deceptive acts?
2. Does theWashington Consumer Protection Act create 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?
Order Certifying Questions to Wash. Supreme Ct. at 4.
To put these questions in the context of issues that are before this court, and
to further narrow the answer we give in this case, we summarize the issues that we
are not addressing. The parties spend a great deal of time discussing choice of law
principles as well as concerns surrounding due process and federalism. Although
the briefing contains discussion about these issues, the certified questions focus on
the interpretation of the statute. Additionally, for purposes of the certified question,
the distric~ court has not determined whether an agency relationship is established,
which requires an analysis under the RESTATEMENT (SECOND) OF AGENCY (1958).
We are not tasked with such an endeavor. While choice of laws, agency, and
federalism concerns along with other issues may be all live questions that the
district court will have to resolve, they play no role in our statutory interpretation.
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Thornell v. Seattle Serv. Bureau, Inc., No; 91393-5
ANALYSIS
QUESTION 1
The certified questions present an issue of statutory interpretation that we
review de novo. Rivett v. City of Tacoma, 123 Wn.2d 573, 578, 870 P.2d 299
(1994). V\Then interpreting statutes, the court's goal is to "'ascertain and carry out
the legislature's intent."' Lake v. Woodcreek 1-Iomeowners Ass 'n, 169 Wn.2d 516,
526, 243 P.3d 1283 (201 0) (quoting Arborwood Idaho, LLC v. City ofKennewick,
151 Wn.2d 359, 367, 89 P.3d 217 (2004)). While engaging in statutory
construction, we first exan1ine the plain meaning of the statute. State v. J.M, 144
Wn.2d 472, 480, 28 P.3d 720 (2001). In so doing, the court may examine the
provision at issue, other provisions of the same act, and related statutes. Dep 't of
Ecologv v. Campbell & Gwinn, LLC, 146 Wn.2d 1, 10-12, 43 P.3d 4 (2002).
'
The relevant
' '
provisions
'.
of the CPA under chapter 19.86 RCW at issue are as
follows:
Civil action for damages .... Any person who is injured in his or her
bt1siness or· property by a violation ... may bring a civil action ....
For the purpose of this section, "person" includes the counties,
· municipalities, imd all political subdivisions of this state.
RCW .19.86.090 (emphasis added).
Pn~·pose-'".:n)terpretation~-Libel·al construction .... The
legislature hereby declares that the purpose of this act is to
complement the body of federal law governing restraints of trade,
unfair competition
.,. :·
and unfair, deceptive, and fraudulent acts or
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Thornell v. Seattle Serv. Bureau, Inc., No. 91393-5
practices in order to protect the public and foster fair and honest
competition. It is the intent of the legislature that, in construing this
act; the co~rts be guided by final decisions of the federal courts and
final orders of the federal trade commission interpreting the various
federal statutes dealing with the same or similar matters and that in
d_eciding whether conduct restrains or monopolizes trade or commerce
or may substantially lessefl cornpetition, determination of the relevant
market or effective· area of competition shall not be limited by the
boundaries
. .of the state of Washington. To this end this act shall be
liberally construed that its beneficial purposes may be served.
RCW 19.86.920 (emphasis added).
Definitions ... ,
(1) "Person'>' shall include, where applicable, natural persons,
corporations, trusts, unincorporated associations and partnerships.
(2) "Trade" and "commerce" shall include the sale of assets or
services, and any commerce directly or indirectly affecting the people
of the state of Washington.
RCW 19.86.010 (em:r)hasis added).
The statutory provisions of the CPA are broadly worded. The statute
I ' • > ' • '
provides that "[a]ny person" can suefor a violation. RCW 19.86.090 (emphasis
added). "Commerce" includes "any commerce directly or indirectly affecting the
people c)fthe state ofWashington." RCW 19.86.010(2) (emphasis added). The
legislature directed that the CPA "shall be liberally construed that its beneficial
purposes may be served." RCW 19.86.920 (emphasis added). The language ofthe
CPA evinces a broad, rather than narrow, lens through which we interpret the
statute.
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Thornell v. Seattle 5'erv. Bureau, Inc., No. 91393-5
We first focus on the definition of"commerce"-"any commerce directly or
indirectly affecting the people ofthe state of Washington." RCW 19.86.010(2)
(emphasis added). The definition of "commerce" does not describe who may sue
under the CPA but rather the scope of the acts and practices the CPA is designed to
prevent.
Defendants argue that the definition of "commerce" should not be
1t understood to allow a claim for an unfair or deceptive practice on behalf of people
not '~of the state of Washington." Such a reading, however, would require us to
give no effect to the words "indirectly affecting." In order to give effect to the
phrase "indirectly affecting," claims are not limited to those only having a direct
affect. Such a narrow interpretation would be inconsistent with both the legislative
mandate. for a liberal construction
' .
of the CPA and with our previous cases
'
involving the interpretation of the CPA. The statutory purpose is broadly worded
not only to protect the public but also, and distinctly, to foster "fair and honest
c?mpetition." RCW 19.86.920.
As is pointed out in the briefing, unscrupulous entities might escape liability
under the CPA if out-of-state citizens could not bring CPA actions against
Washington entities that direct unfair and deceptive practices only to out-of-state
residents. Washington businesses engaging in unfair and deceptive practices that
indirectly affect others do not advance the purpose of fair and honest competition.
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Thornellv. Seattle Serv. Bureau, Inc., No. 91393-5
Honest businesses could be placed at a competitive disadvantage competing
against a business that generates revenue from unlawful acts that violate the
statute.
While our cases have not resolved this issue directly, in Schnall v. AT&T
Wireless Services, Inc., 171 Wn.2d 260, 259 P.3d 129 (2011) the issue was
presented. In that case, reconsideration of our decision was granted and the original
t;· .~majority opinion was withdrawn and revised to delete the discussion on this point.
The majority recognized in making the revision the "credible" arguments presented
against the claim that the CPA does not apply extraterritorially. Schnall, 171
Wn.2d at 276 n.4. The majority, however, did not decide the issue.
The Schnall dissent did elaborate on this issue and, in its statutory analysis,
corwluded the CPA supported an extraterritorial reach: "[T]he commerce and trade
[that the abusive company] brings into Washington, and the alleged unfair and
dishonest method by which it does so, affects the state economy and thus affects
the Washington public at large." Schnall, 171 Wn.2d at 289 (Sanders, J.,
dissenting). We agree with this analysis.
Abroad reading of the CPA is also consistent with our established
recognition that the CPA's reach extends beyond Washington's boundaries. In
State v, Reader's Digest Ass 'n, 81 Wn.2d 259, 501 P.2d 290 (1972), we rejected an
interpretation ofRCW 19.86.170 that would have limited the applicability ofthe
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Thornell v. Seattle Serv. Bureau, Inc., No. 91393-5
CPA to prohibit unfair and deceptive practices to Washington's borders. In that
case, a New York defendant mailed a' sweepstakes lottery to Washington residents
and argued it was exempt from the CPA pursuant to RCW 19.86.170 because it
was regulated by the Federa1 Trade Commission. This court explained:
· [R]espo~dent's interpretation· ofRCW 19.86.170 would limit the
application ofRCW 19.86.020 strictly to intrastate commerce ....
Such aresult would require us to ignore RCW 19.86.920 which
provides that in determining the relative market or effective area of
competition we should not be limited to the boundaries of this state.
Reader's Digest, 81 Wn.2d at 279-80.
Reader's Digest is an example of liberal construction of the CPA to
effectuate its purpose: to protect the public against unfair or deceptive acts. The
present case presents the inverse of Reader's Digest: an out-of-state plaintiff
injured by the allegedly
' ' .
deceptive act of an
.
in-state agent. Where we recognized a
cause of action involving an out-of-state defendant directing allegedly deceptive
mailings to Vvrashington residents-thus rejecting a narrow interpretation of the
CPA that would limit its application strictly to intrastate commerce-a liberal
construction of the CPA supports a similar interpretation.
Additional cases support an expansive interpretation of the CPA, which is
consistent with legislature's mandate that the CPA be liberally construed. In
Hangman Ridge Training Stables, Inc. v.. Safeco Title Insurance Co., 105 Wn.2d
778,785, 719 P.2d 531 (1986), this court held that in order to prove a CPA
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Thornell v. Seattle Serv. Bureau, Inc., No. 91393-5
violation, an actual deception is not required, only that the act or practice "had the
capacity to deceive a sul?stantial portion of the public."
While elements of other claims involving deception or unfair acts typically
include relianee, in Indoor Billboard this court rejected the principle that reliance
is necessarily an element of plaintiffs CPA claim. Indoor Billboard/Wash., Inc. v.
Integra Telecom of Wash., Inc., 162 Wn.2d 59, 82, 170 P.3d 10 (2007). Similarly,
f~in Panag, we rejected the argument that the CPA applies only to consumer or
business· transaction disputes and that only a consumer or someone in a business
relationship with the ~efendant can bring a private CPA claim. Panag v. Farmers
Jns. Co. of Wash., 166 Wn.2d 27 1 38, 204 P.3d 885 (2009). An expansive
int~tpret;:~tion of the CPA~s extraterritorial reach in the present case is therefore
.'
C()nsistent with our prior cases.
Defendants rely on In re Bankruptcy Petition of Wieber, 182 Wn.2d 919,
347 P.3d 41 (2015), which does not compel a different interpretation. In Wieber,
the Uni!ed States Bankruptcy Court for the Western District of Washington
certified questions to this court as to whether Washington's homestead exemption
law1 chapter 6. ~3 RC:W, applied extraterritorially to real property in other states.
Ultimately, we concluded
' .
that the statute did not allow extraterritorial application
~ ' '
where
'
the .legislature
' . . did
.
not expressly provide
.
for it. In the analysis, we concluded
.
that while there were no specific geographical limitations to the homestead statute,
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Thornell v. Seattle Ser.v. Bureau, Inc., No. 91393-5
the relevantprovisions must be read in the context of the entire statute. Because the
statute in dudes avariety of procedures that would require action by courts and
agencies, we concluded that allowing extraterritorial application of the homestead
exe'mption law would. ;,'require the same actions be taken by out-of-state courts and
. . . .
agencies.'' Pf!ieber, 182 Wn.2d at 927. We concluded that this would be unlikely to
be the intent of the legislature, given that the "state lacks the authority to direct
tactions and procedures of foreign courts or foreign agencies." Wieber, 182 Wn.2d
at 927. Our holding in Wieber does not help the defendants here. The procedures in
the homestead exemption law "plainly apply only to courts and agencies in
Washington." Wieber, 182 Wn.2d at 926-27. No similar concerns exist under the
CPA, and the legislative purpose and provisions of the CPA contemplate
extraterritorial application, as described above.
The CPA does allow 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. The geographic limitations that defendants urge this court to adopt
defeat tht) CPA's twin purposes of protecting the public and fostering fair and
honest competition, and are not supported by the language of the statute.
Therefore, we answer question one in the affirmative.
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Thornell v. Seattle Serv. Bureau, Inc., No. 91393-5
QUESTION2
With regard to question two, the general rule is that a principal can be liable
for acts of its agent. The "faCt" that the principal in this case is an out-of-state
~ntity does not change this. 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 federal court must still determine the agency relationship involved here. Based
,.on the facts, procedural posture, and certified questions, we do not know enough
specifics to answer question two except generally. For purposes of answering the
certified question---based on the limited facts specific to the legal nature of the
agency relationship--we answer in the affirmative.
CONCLUSION
We answer both questions yes. Under the CPA) an out-of-state plaintiff may
bring a claim.against a Washington corporate defendant for allegedly deceptive
acts. Similarly, an out:of-state plaintiff may bring a CPA claim against an out-of-
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Thornell v. Seattle Serv. Bureau, Inc., No. 91393-5
state defendant for the allegedly deceptive acts of its in-state agent.
WE CONCUR:
-~~~(~L9,
0w
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