Noll v. Am. Biltrite Inc.

188 Wash.2d 402

395 P.3d 1021

Donald NOLL and Candance Noll, husband and wife, Respondents,

v.AMERICAN BILTRITE INC.; Ametek Inc.; Bird Incorporated; BorgWarner Morse Tec Inc., as successor-by-merger to Borg-Warner Corporation; CBS Corporation, a Delaware corporation f/k/a Viacom Inc., successor-by-merger to CBS Corporation, a Pennsylvania corporation f/k/a Westinghouse Electric Corporation; Certain-Teed Corporation; Conwed Corporation; Domco Products Texas Inc. ; Ford Motor Company; General Electric Company; Georgia-Pacific LLC; Hercules Incorporated; Honeywell International Inc.; Industrial Holdings Corporation f/k/a The Carborundum Company; Ingersoll-Rand Company; J-M Manufacturing Company Inc.; Kaiser Gypsum Company Inc. ; Kelly Moore Paint Company Inc.; Saberhagen Holdings Inc.; Simpson Lumber Company LLC; and Simpson Timber Company, Defendants, Special Electric Company, Inc., Petitioner.

No. 91998-4

Supreme Court of Washington.

Argued Jan. 17, 2017

Filed June 8, 2017

Michael Barr King, Rory Drew Cosgrove, Carney Badley Spellman PS, 701 5th Ave., Ste. 3600, Seattle, WA, 98104-7010, for Petitioner.

Brian D. Weinstein, Benjamin Robert Couture, Alexandra Brett Caggiano, Weinstein Couture PLLC, 601 Union Street, Suite 2420, Seattle, WA, 98101, William A. Kohlburn, Ryan J. Kiwala, Simmons Hanly Conroy, 231 Bemiston Avenue, Suite 525, St. Louis, MO, 63105, for Respondents.

Stewart Andrew Estes, Keating, Bucklin & McCormack, Inc., P.S., 800 Fifth Ave., Ste. 4141, Seattle, WA, 98104-3175, Christopher Weldon Nicoll, Noah Jaffe, Nicoll Black and Feig PLLC, 1325 4th Ave., Ste. 1650, Seattle, WA, 98101-2506, as Amicus Curiae on behalf of Washington Defense Trial Lawyers.

Stewart Andrew Estes, Keating, Bucklin & McCormack, Inc., P.S., 800 Fifth Ave., Ste. 4141, Seattle, WA, 98104-3175, as Amicus Curiae on behalf of Defense Research Institute.

MADSEN, J.

¶1 For a Washington court to exercise specific personal jurisdiction over a defendant, the plaintiff must allege that the defendant purposefully availed itself of the privilege of doing business in Washington, thus invoking the benefits and protections of our laws. Without any such allegation, exercising jurisdiction would not comport with due process. In this case, Special Electric Company Inc. asks us to reverse the Court of Appeals because that court found Washington could exercise specific personal jurisdiction over Special Electric under a stream of commerce theory without any allegation that Special Electric purposefully availed itself of Washington's laws. Because the parties and trial court did not have the benefit of our recent decision in State v. LG Electronics, Inc., 186 Wash.2d 169, 375 P.3d 1035 (2016), cert. denied, ––– U.S. ––––, 137 S.Ct. 648, 196 L.Ed.2d 522 (2017), or the recently disclosed evidence of Special Electric's unrelated contacts in Washington, we remand this case to the trial court. We accepted review in this case, however, because we disagree with the Court of Appeals' application of J. McIntyre Machinery Ltd. v. Nicastro , 564 U.S. 873, 131 S.Ct. 2780, 180 L.Ed.2d 765 (2011) (plurality opinion) and this case offers an opportunity for us to give guidance to the lower courts on what a plaintiff must allege for specific personal jurisdiction. Based on the allegations currently before us, we agree that Donald Noll did not allege sufficient facts for Washington to exercise specific personal jurisdiction over Special Electric. Therefore, the trial court properly dismissed the case without prejudice. We do not, however, intend to preclude the trial court from making its own finding of jurisdiction on remand depending on the allegations that the plaintiff then raises.

FACTS

¶2 Noll¹ sued a number of manufacturers, sellers, and suppliers of asbestos and asbestos-containing products, including Special Electric. Noll alleged that he developed malignant mesothelioma² from exposure to asbestos when he worked construction in Washington between 1977 and 1979 cutting asbestos-cement pipes. Those asbestos-cement pipes were manufactured by Certain-Teed Corporation, and Certain-Teed received most of its asbestos from Special Electric. Special Electric moved to dismiss on the basis that the trial court lacked specific personal jurisdiction over it because its contacts were limited to the California-based corporation, Certain-Teed, and did not extend to Washington.

¶3 Special Electric was incorporated in Wisconsin by Richard Wareham in 1957 and operated as a business that sold and distributed electrical insulation products. Wareham operated multiple companies with the "Special" moniker, including: Special Electric, Special Materials, and Special Asbestos. Special Electric is the named defendant in this suit. Special Electric is a corporation that exists only to hold insurance policies providing coverage for asbestos related injuries and to handle claims filed by those injured because of asbestos exposure from asbestos that the various Special companies sold. See Melendrez v. Superior Court , 215 Cal.App.4th 1343, 156 Cal.Rptr.3d 335 (2013) (outlining the recent history and status of Special Electric and related Special companies). Special's³ principal place of business was Milwaukee, Wisconsin, and it had offices in eight states but none in Washington.

¶4 Between 1975 and 1981, Special supplied crocidolite asbestos to Certain-Teed for use in asbestos-cement pipe. Special had a five-year requirements contract with Certain-Teed's plant in Santa Clara, California, beginning in 1978. Certain-Teed manufactured and distributed asbestos-cement pipes on a national scale, and it specifically sold its product in Washington. Special also supplied Certain-Teed's Santa Clara plant with chrysotile asbestos during the late 1970s and early 1980s. Certain-Teed sales records show that it delivered asbestos-cement pipes to Washington from its Santa Clara plant. Between 1977 and 1979, Certain-Teed made at least 31 shipments of asbestos-cement pipes to Washington, totaling 55,000 linear feet.

¶5 Noll worked in Port Orchard, Washington, for a construction company between 1977 and 1979. In a deposition taken before his death, Noll testified that he was exposed to asbestos dust when cutting asbestos-cement pipe—both when he cut pipe and when other workers cut pipe around him. Certain-Teed had manufactured the pipe. Noll developed malignant pleural mesothelioma and died in 2013.

¶6 In the complaint, Noll alleged that "Defendants and/or their predecessors-in-interest are corporations who, at all times relevant herein, manufactured, sold or distributed asbestos-containing products or products that were used in conjunction with asbestos." Clerk's Papers at 2. Further, Noll alleged that he "was exposed to asbestos and asbestos-containing products which had been mined, manufactured, produced, and/or placed into the stream of commerce by the defendants and/or was exposed to asbestos through the use of products manufactured by defendants. As a direct and proximate result of this exposure, plaintiff Donald Noll developed mesothelioma." Id. For jurisdiction, Noll alleged, "This Court has jurisdiction over this cause pursuant to RCW 4.12.025 because, at all times relevant herein, defendants transacted business and/or may be served with process in [King] County, Washington." Id.

¶7 Special moved to dismiss for lack of specific personal jurisdiction. Special argued that Noll had alleged no facts in support of its conclusory statement that the defendants transacted business in Washington. And, Special argued, no such facts exist. According to Special, the following facts demonstrate that it does not have sufficient contact with Washington to support jurisdiction: it has never been licensed to do business in Washington; none of its officers, directors, or employees reside or are domiciled in Washington; it never had offices in Washington; it has no bank accounts or property in Washington; it does not pay taxes in Washington; and it has no agents in Washington. In response, Noll argued the facts detailed above: Special provided Certain-Teed with large quantities of asbestos, Certain-Teed used that asbestos to manufacture asbestos-cement pipes, Certain-Teed sold those pipes in Washington, and those pipes exposed Noll to asbestos.

¶8 The superior court granted Special's motion to dismiss for lack of specific personal jurisdiction. The court considered Special's motion to dismiss and accompanying declaration, Noll's brief in opposition, and Special's reply. Noll moved for reconsideration and submitted evidence to support that motion. The trial court granted that motion in part. After considering the additional evidence that Noll provided,⁴ the court upheld its dismissal for lack of specific personal jurisdiction but changed the order so that the case was dismissed without prejudice, as required by Washington law. See State v. Nw. Magnesite Co., 28 Wash.2d 1, 42, 182 P.2d 643 (1947) (dismissals based on lack of personal jurisdiction are without prejudice because the court has no power to pass upon the merits of the case).

¶9 Division One of the Court of Appeals reversed and found that Noll had alleged sufficient facts for the trial court to exercise specific personal jurisdiction over Special. Noll v. Am. Biltrite, Inc., 188 Wash.App. 572, 355 P.3d 279 (2015). According to the Court of Appeals, the record shows that Special supplied approximately 95 percent of the asbestos that Certain-Teed used to manufacturer asbestos-cement pipe at its Santa Clara, California, plant. Id. at 577, 355 P.3d 279. By supplying that asbestos to Certain-Teed, "Special regularly supplied raw asbestos for the manufacture of pipe that moved into Washington through established channels of sale." Id. at 578, 355 P.3d 279. The Court of Appeals acknowledged that Justice Breyer's concurring opinion in J. McIntyre (plurality opinion), is the controlling opinion. Noll, 188 Wash.App. at 581, 355 P.3d 279. It then concluded that a Washington court...