                                                               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.




                                                 3
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.




                                                   6
     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


                                               '9
 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




                                                13
