July 20, 2017

Deggs v. Asbestos Corp., Ltd., 186 Wn.2d 716, 381 P.3d 32

In Deggs, our Supreme Court was asked to revisit, and reconsider, a case-law gloss on Washington’s wrongful death statute, which had emerged out of a series of decisions starting when Woodrow Wilson was in the White House and ending with a classic judicial “summing up” handed down soon after America had decided we liked Ike so much we should make him president. The facts of Deggs were straightforward. After Gordon Sundberg was diagnosed with a battery of asbestos-related afflictions, he sued several defendants, ultimately settling with all but one and obtaining a $2,000,000+ jury verdict against that one. Sundberg died several years later, and daughter Judy Deggs as his personal representative brought a wrongful death action, naming the defendant who had gone to trial and lost, as well as several other defendants who had not been sued the first time around. By now, the statute of limitations had run.  The trial court dismissed, Division One of the Court of Appeals affirmed (in an opinion by Judge Marlin Applewick, joined by Judge Linda Lau, over a vigorous dissent by Judge Stephen Dwyer), the plaintiff petitioned for review, review was granted, and the battle was joined.

And the defense, championed by Kevin Craig and Terry Hall, prevailed! The Supreme Court split 5-4. Justice Stephen Gonzalez wrote the majority opinion, Justice Debra Stephens the dissent.  For Stephens, the issue was a matter of judicial housecleaning: the old case law gloss on our wrongful death statute, dating from the first half of the last century, was “nonsensical” and should be abrogated, forthwith!  See 186 Wn.2d at 739 (Stephens, J. dissenting).  For Justice Gonzalez and his colleagues in the majority, the matter was not so easy. Although Justice Gonzalez agreed that, were the issue one of first impression, the Court would likely come out the other way, the fact remained that this was not a matter of first impression, the case for the harmfulness of the existing approach had not been made, and there was at least the risk of unsettling legitimate expectations. See 186 Wn.2d at 728-730.  And although the majority demurred to the suggestion of WDTL as amicus curiae in a brief authored by Mike King and Stew Estes) that the case was most properly analyzed as a matter of legislative acquiescence (the Legislature had “witnessed” the development over decades of this case law gloss limiting a statutory remedy and had done nothing then or since to abrogate it), the majority agreed that the Legislature’s “lack of response” added weight to the conclusion that the existing approach had not been harmful.  Id. at 728, n. 7, 729. 

Noll v. Am. Biltrite, Inc., ___ Wn.2d ___, No. 91998-4, 2017 Wash. LEXIS 615 (June 8, 2017), as amended by 2017 Wash. LEXIS 713.

The law of personal jurisdiction is changing! As was recently reported in this publication, the U.S. Supreme Court “has been busy in the personal jurisdiction arena.” Consequently, so have the Washington Supreme Court and WDTL’s amicus committee. The worlds of personal jurisdiction and asbestos collided in the case of Noll v. Am. Biltrite, Inc., and thanks to the work of WDTL members Melissa Roeder, Mike King, Rory Cosgrove and Justin Wade defending the component supplier, “Special Electric,” and WDTL’s amicus committee’s briefing, authored by Chris Nicoll, Noah Jaffe and Stew Estes, an errant broadening of the test for jurisdiction over component manufacturers was reversed.

Mr. Noll contracted mesothelioma after exposure to a variety of asbestos containing products throughout a lifetime of work, including in particular, a certain type of asbestos-cement pipe manufactured by a California company named Certain-Teed. As a war raged from 1975 – 1982 between rock and disco for the soul of American youth, Special Electric, a Wisconsin company, had a contract to supply the asbestos that Certain-Teed used to make asbestos-cement pipe. During the key period, Certain-Teed sold and shipped a substantial amount of its pipe into Washington. Based on that, Mr. Noll, and later his representative, alleged that Washington courts could exercise specific personal jurisdiction over Special Electric purely because it had sent a harmful product into the stream of commerce where it was incorporated by Certain-Teed into a finished product that made its way into Washington where, allegedly, it injured Mr. Noll. Noll made no allegations in support of jurisdiction other than his stream of commerce claim.

The trial court granted Special Electric’s motion to dismiss, but the Court of Appeals reversed, expanding prior stream of commerce jurisprudence to sweep up any component manufacturer whose product ended up entering the state in sufficiently large quantities regardless of the component manufacturer’s knowledge or intent that its product would be marketed in Washington. After granting review, a majority of the Washington Supreme Court decided that Noll failed to alleged sufficient facts for Washington courts to exercise specific personal jurisdiction over Special Electric under the stream of commerce doctrine and remanded the case to the trial court for further consideration in light of State v. LG Electronics, Inc., 186 Wn.2d 169, 375 P.3d 1035 (2016), cert. denied, 137 S. Ct. 648 (2017). In so doing, the court took the opportunity to provide further guidance.

The court noted that stream of commerce cases have caused deep divisions within the U.S. Supreme Court, citing Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 107 S. Ct. 1026, 1028, 94 L. Ed. 2d 92 (1987), and J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873, 131 S. Ct. 2780, 180 L. Ed. 2d 765 (2011). The court reaffirmed the position it adopted in LG Electronics, that, based on Justice Breyer’s concurrence in J. McIntyre, a prima facie case for specific personal jurisdiction over a component manufacturer is satisfied where the complaint alleges that the defendant sold its product into the stream of commerce with the intent that the product would come into Washington. The majority concluded that the intent allegation was missing in Noll. This was important, according to the majority, because recent Supreme Court precedent in cases involving specific jurisdiction has “reaffirmed that the relevant relationship between a defendant and a forum must arise out of the contacts that the defendant itself creates with the forum state.” Noll, 2017 Lexis 615 at * 14 (italics in original, internal quotes omitted, citing Walden v. Fiore, __ U.S. __, 134 S. Ct. 1115, 188 L. Ed. 2d 12 (2014)). In reaching its conclusion that the Court of Appeals’ decision was in conflict with Walden, the Court specifically relied on WDTL’s amicus briefing:

In this case, amicus WDTL argues that the Court of Appeals' decision erred under Walden because it failed to limit its focus to Special's suit-related conduct. Amicus WDTL's argument is persuasive on this point. The Court of Appeals focused on Special delivering asbestos to Certain-Teed's plant in California and Certain-Teed then purposefully availing itself of Washington's laws by selling large quantities of asbestos-cement pipes to Washington companies. But the Court of Appeals acknowledged that Special may not have been aware that Certain-Teed was supplying the asbestos-cement pipes to companies in Washington, and it did not require any other evidence that Special purposefully availed itself of Washington's laws.

Noll, 2017 Wash. LEXIS 615, at *15-16.

Regrettably, the court did not decide whether a showing of actual knowledge or awareness is necessary or sufficient to support specific jurisdiction in stream of commerce cases. Instead, the court expressed the requirement more generally as consisting of allegations of facts which, if true, would show that the defendant has done something to purposefully avail itself of the privilege of doing business in the forum. Id. at *16. Importantly, the court clearly stated that merely alleging that an out-of-state component part manufacturer sold a part to an out-of-state manufacturer who then sold the finished product into Washington will not satisfy the requirements of due process.


*Author Credit: Michael King of Carney Badley Spellman and Chris Nicoll of Nicoll Black & Fieg