Sandhu Farm Inc. v. A&P Fruit Growers Ltd.

524 P.3d 209

SANDHU FARM INC., a Washington corporation, Appellant,

v.A&P FRUIT GROWERS LTD., a British Columbia corporation, Respondent.

No. 83866-1-I

Court of Appeals of Washington, Division 1.

Filed February 13, 2023

Mark J. Lee, Attorney at Law, 230 E Champion St., Bellingham, WA, 98225-4548, Haylee J. Hurst, Elizabeth Slattery, Wolf Lee Hurst & Slattery, PLLP, 230 E Champion St., Bellingham, WA, 98225-4548, for Appellant.

Rajeev D. Majumdar, Whatcom Law Group, PS, 289 H St. Ste. A, Blaine, WA, 98230-4007, Casie Carter Rodenberger, Attorney at Law, 289 H St. Ste. A, Blaine, WA, 98230-4007, for Respondent.

PUBLISHED OPINION

Mann, J.

¶1 In Ford Motor Co. v. Montana Eighth Jud. Dist. Ct., ––– U.S. ––––, 141 S. Ct. 1017, 1024, 209 L. Ed. 2d 225 (2021), the United States Supreme Court recently addressed and clarified the requirements for personal jurisdiction over a nonresident entity. Under Ford, the defendant must purposefully avail itself of the privilege of conducting activities within the forum state, and the plaintiff's claims must arise out of or relate to the defendant's contacts with the forum. 141 S. Ct. at 1024-25 (emphasis added).

¶2 Sandhu Farm Inc. (Sandhu), a Washington corporation, sued A&P Fruit Growers Ltd. (A&P), a British Columbia corporation, for breach of contract in Skagit County, Washington. Sandhu appeals the trial court's decision dismissing its case for lack of personal jurisdiction, and alternatively, for forum non conveniens. We reverse the trial court's decision on personal jurisdiction but affirm the dismissal of the case for forum non conveniens.

I.

¶3 Sandhu is incorporated in Washington with its principal place of business, a blueberry farm, in Skagit County, Washington. A&P is a Canadian corporation with its headquarters and principal place of business in Abbotsford, British Columbia, Canada.

¶4 Sandhu incorporated in 2004 and began operations soon after. Historically, Sandhu sold its blueberries to a local processor. But because the local processor's coolers would fill, Sandhu would need to delay delivery causing a loss of freshness and value. Sandhu began looking for a new processor and began working with A&P in 2010.

¶5 Sandhu contacts A&P each harvest season, the parties negotiate a price, and then Sandhu delivers its blueberries directly to A&P's processing facility in Abbotsford, Canada.

A&P then packs, processes, and resells the blueberries. Some blueberries are sold in Washington to Washington buyers.

¶6 The owner of A&P, Sukhminder Bath, also owns Sun Berries, a berry farm in Lynden, Washington. The Sun Berries property includes both the farm and a receiving facility for A&P. Bath visits the Sun Berries property every two to three days to attend to the farming operation. Sandhu made one delivery to the Sun Berries property. After that, Sandhu delivered its blueberries directly to A&P's processing facility in Canada. A&P does receive blueberries from other Washington farmers at the Sun Berries property.

¶7 A&P does not solicit farmers in Washington, instead, farmers like Sandhu approach A&P to sell their fruit. Bath visits one or two U.S. farmers each year on behalf of A&P, but this is often just to say hello. A&P has been to Sandhu one time to look at the farm. None of the other employees of A&P, all Canadian, come into the United States to do business on behalf of A&P. Any meetings between Sandhu and A&P occur at A&P's processing plant in Canada.

¶8 Sandhu sued A&P for breach of contract, and violation of the United Nations Convention on the International Sale of Goods, in February 2021. Sandhu alleged that it had not been paid the full amount owed for blueberry transactions in 2018 and 2019. A&P raised several affirmative defenses, including lack of personal jurisdiction in its answer.

¶9 Sandhu unsuccessfully moved for partial summary judgment on the issue of personal jurisdiction. A&P then moved to dismiss for lack of personal jurisdiction and forum non conveniens. On March 4, 2022, the trial court granted A&P's motion and dismissed Sandhu's complaint with prejudice. Sandhu appeals.

II.

¶10 Sandhu contends the trial court erred by dismissing its claims for lack of personal jurisdiction over A&P. It argues that Washington courts have jurisdiction over A&P given A&P's significant and continuous activities in Washington. We agree.

¶11 We review a trial court's dismissal for lack of personal jurisdiction de novo. State v. LG Elecs., Inc, 186 Wash.2d 169, 176, 375 P.3d 1035 (2016). An out-of-state defendant must have some minimum contacts with the state so that personal jurisdiction will not offend "traditional notions of fair play and substantial justice." Int'l Shoe Co. v. State of Wash., 326 U.S. 310, 316, 66 S. Ct. 154, 90 L. Ed. 95 (1945).

¶12 "A court's exercise of personal jurisdiction over a nonresident defendant requires compliance with both the relevant state long-arm statute and the Fourteenth Amendment's due process clause." Downing v. Losvar, 21 Wash. App. 2d 635, 654, 507 P.3d 894 (2022) (citing Daimler AG v. Bauman, 571 U.S. 117, 137, 134 S. Ct. 746, 187 L. Ed. 2d 624 (2014) ). Washington's "long-arm" statute permits jurisdiction over:

(1) Any person, whether or not a citizen or resident of this state, who in person or through an agent does any of the acts in this section enumerated, thereby submits said person, and, if an individual, his or her personal representative, to the jurisdiction of the courts of this state as to any cause of action arising from the doing of any of said acts:

(a) The transaction of any business within this state.

RCW 4.28.185. The Washington Supreme Court has consistently held that the state long-arm statute permits jurisdiction over foreign corporations to the extent permitted by the due process clause of the United States Constitution. Downing, 21 Wash. App. 2d at 654, 507 P.3d 894 ; Noll v. Am. Biltrite, Inc., 188 Wash.2d 402, 411, 395 P.3d 1021 (2017) ; Shute v. Carnival Cruise Lines, 113 Wash.2d 763, 766-67, 783 P.2d 78 (1989). The due process clause of the Fourteenth Amendment limits the power of a state court to assert personal jurisdiction over nonresidents of the state. Bristol-Myers Squibb Co. v. Superior Ct., 582 U.S. 256, 137 S. Ct. 1773, 1779, 198 L. Ed. 2d 395 (2017). "Because a state court's assertion of jurisdiction exposes defendants to the state's coercive power, personal jurisdiction falls within the parameters of the clause." Downing, 21 Wash. App. 2d at 655, 507 P.3d 894.

¶13 Personal jurisdiction can arise in one of two ways: by general jurisdiction or specific jurisdiction. A state may exercise general jurisdiction when a defendant is "essentially at home" in the forum state. Ford, 141 S. Ct. at 1024 (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919, 131 S. Ct. 2846, 180 L. Ed. 2d 796 (2011) ). A corporation is at home in its place of incorporation and its principal place of business. Ford, 141 S. Ct. at 1024 ; Daimler, 571 U.S. at 137, 134 S.Ct. 746. The parties do not dispute that Washington courts do not have general jurisdiction over A&P because A&P is incorporated and has its principal place of business in Canada. Instead, we are concerned with specific jurisdiction.

¶14 Specific jurisdiction covers a narrower class of defendants "less intimately connected with a [s]tate, but only as to a narrower class of claims." Ford, 141 S. Ct. at 1024. The first element, the connection with a state, "often [goes] by the name ‘purposeful availment.’

The defendant ... must take some act by which it purposefully avails itself of the privilege of conducting activities within the forum State. The contacts must be the defendant's own choice and not random, isolated, or fortuitous. They must show that the defendant deliberately reached out beyond its home—by, for example, exploiting a market in the forum State or entering a contractual relationship centered there.

Ford, 141 S. Ct. at 1024-25 (internal quotations and alterations omitted).

¶15 The second element, the class of claims, requires that the plaintiff's claims "must arise out of or relate to the defendant's contacts" with the state. Ford, 141 S. Ct. at 1025 (quoting Bristol-Myers, 137 S. Ct. at 1780 ). In Ford, the Supreme Court clarified that the "arise out of or relate to" standard does not require direct causation between the plaintiff's suit and the defendant's activities.

The first half of that standard asks about causation; but the back half, after the "or," contemplates that some relationships will support jurisdiction without a causal showing. That does not mean anything goes. In the sphere of specific jurisdiction, the phrase "relate to" incorporates real limits, as it must to adequately protect defendants foreign to a forum. But again, we have never framed the specific jurisdiction inquiry as always requiring proof of causation—i.e., proof that the plaintiff's claim came about because of the defendant's in-state conduct.

Ford, 141 S. Ct. at 1026. Thus, under Ford, for specific jurisdiction, the defendant must (1) purposefully avail itself of the privilege of conducting activities within the forum state and (2) the plaintiff's claims must arise out of or relate to the defendant's contacts with the forum. 141 S. Ct. at 1024-25 (emphasis added).¹

¶16 Ford concerned two consolidated cases involving accidents in Minnesota and Montana involving Ford vehicles. Ford argued that despite doing substantial business in both states, the exercise of personal jurisdiction over them was improper because the particular cars involved in the two cases were not first sold in the forum states or designed or manufactured there. Ford, 141 S. Ct. at 1022-23. Instead, the cars were brought to the forum states by later resales and relocations by consumers. Ford, 141 S. Ct. at 1023.

¶17 Under the first element, the purposefully avail element, Ford conceded that it did substantial business in Montana and Minnesota and actively sought to serve the market for...