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Noll v. American Biltrite Inc.

Supreme Court of Washington, En Banc

June 8, 2017

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 COMP ANY, INC., Petitioner.

          MADSEN, J.

         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 Wn.2d 169, 375 P.3d 1035 (2016), cert, denied, 137 S.Ct. 648 (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 LG Electronics, 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

         Noll[1] sued a number of manufacturers, sellers, and suppliers of asbestos and asbestos-containing products, including Special Electric. Noll alleged that he developed malignant mesothelioma[2] 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.

         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's[3] principal place of business was Milwaukee, Wisconsin, and it had offices in eight states but none in Washington.

         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.

         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.

         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.

         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.

         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 Wn.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).

         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 Wn.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. 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. The Court of Appeals acknowledged that Justice Breyer's concurring opinion in J. McIntyre Machinery Ltd. v. Nicastro, 564 U.S. 873, 131 S.Ct. 2780, 180 L.Ed.2d 765 (2011) (plurality opinion), is the controlling opinion. Noll, 188 Wn.App. at 581. It then concluded that a Washington court could assert specific personal jurisdiction over Special under a stream of commerce theory because the product was a known hazardous material, one of the factors mentioned by Justice Stevens in Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987), and the asbestos was supplied for use in making large quantities of pipe distributed through existing channels of interstate commerce. Noll, 188 Wn.App. at 583. According to the Court of Appeals, the regular flow or course of sales distinguished this case from J. McIntyre because a "plaintiff is not required to prove both a regular flow and 'something more.'" Id. Although the Court of Appeals acknowledged that the record did not show that Special had knowledge that Certain-Teed distributed its pipe outside of California, "[t]he volume of Special's shipments of asbestos to Certain-Teed's Santa Clara manufacturing plant, coupled with the volume of finished pipe distributed into Washington by Certain-Teed, signifies that Special purposefully availed itself of the protection of Washington law." Id. at 585.

         Special petitioned this court for review. We originally stayed the petition pending our decision in LG Electronics, 186 Wn.2d 169. When that decision became final, we granted Special's petition. The Washington Defense Trial Lawyers Association (WDTL), which had written in support of granting review, moved to submit an amicus curiae brief, which was granted.

         After the parties submitted supplemental briefing in this court, Special moved to clarify the record. In its clarification, Special provided evidence that Special Materials and Special Asbestos had contracts with two Washington companies during the relevant period. The evidence appears to show shipment receipts for at least hundreds of tons of asbestos from Special Asbestos and Special Materials to Auburn, Washington, and Seattle, Washington, from 1976 to 1980. These Washington companies are not parties to this suit and seem to be unrelated to Noll's exposure and injuries. Because these contacts are not ...


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