District Court In Washington Reverses Course On Personal Jurisdiction?

by Husch Blackwell LLP

In recent years federal courts have clarified and narrowed the scope of personal jurisdiction as it applies to nonresident defendants, particularly in mass tort and toxic exposure cases. However, a recent decision coming out of Washington appears to buck this trend. In Donald Varney and Maria Varney v. Air & Liquid Systems Corporation, et al., Case No. 3:18-CV-05105-RJB, 2018 WL 1517669, the United States District Court for the Western District of Washington had an opportunity to decide motions brought by Defendants Taco, Inc. and Aurora Pump Company to dismiss for failure to state a claim, for lack of standing, to strike Plaintiffs’ request for pre-judgment interest, and most notably for lack of personal jurisdiction.[1]  The Court denied each of the Defendants’ motions.

Plaintiffs[2] in Varney sued a myriad of Defendants, alleging that Donald Varney developed mesothelioma due to exposure to asbestos-containing products and materials while working as a marine machinist at Puget Sound Naval Shipyard in Bremerton, WA, and at Hunters Point Naval Shipyard in San Francisco, CA, as well as a mechanical instrument mechanic and an auto mechanic. Plaintiffs also alleged that Mr. Varney had some “take-home” exposure through his father, who worked as an auto mechanic in Seattle, WA.  Additionally, Plaintiffs claimed that Mr. Varney’s wife, Maria Varney, suffered loss of consortium due to her husband’s illness.

Plaintiffs did not offer any specific affidavits or evidence in support of their arguments that the Court had personal jurisdiction over Taco and Aurora. Rather, they relied solely on the allegations contained in their Complaint. Because Defendants had not specifically controverted any of the allegations in the Complaint, the Court took them to be true. In the Complaint, Plaintiffs alleged generally that the Defendants all placed products into the stream of commerce in the state of Washington, and into Pierce County, and the counties of Mr. Varney’s exposure. They claimed that the presence of these products in Washington were the “but-for” cause of Mr. Varney’s illness.

In their motions, Defendants argued that the Court lacked specific personal jurisdiction[3] over Plaintiffs’ claims against them because there was not a sufficient connection between their activities and the claims. Their primary argument was that none of the allegations in Plaintiffs’ Complaint specified whether Mr. Varney worked with or around the products of those particular Defendants in California, Washington, or somewhere else.  They contended that without such specific allegations, it was not clear that Plaintiffs’ claims arose out of Defendants’ contacts with Washington (as opposed to some other state) such that the Court’s assertion of personal jurisdiction would be proper. The Court disagreed.

The Court began by noting that because Washington’s long-arm statute extends the court’s personal jurisdiction to the broadest reach that the United States Constitution permits, the jurisdictional analysis under Washington law and federal law would be the same. The Court then cited Ninth Circuit federal precedent to outline the three prerequisites for specific personal jurisdiction to attach: (1) the Defendants must have purposely availed itself of the privilege of conducting activities in Washington, (2) the Plaintiffs’ claims must have arisen out of the Defendants’ activities in Washington, and (3) the exercise of jurisdiction must be reasonable.  The Court addressed each of these requirements in turn.

Looking to the first requirement, the Court reiterated that Plaintiffs allege that all of the Defendants placed their products into the stream of commerce in Washington. The Court stated that these allegations are “sufficient under Worldwide Volkswagen, 444 U.S. 286 (1980) and its progeny.”

The Court made similarly short work of the third requirement. Plaintiffs had argued that exercise of personal jurisdiction in this case was “reasonable” because Washington has an interest in protecting its citizens from hazardous products, Defendants did not suggest an alternate forum, Defendants economically benefitted from its activities in Washington, and it would be inconvenient for Plaintiffs to try their case against Taco and Aurora in a different state from where they were proceeding against the other Defendants they had sued.  The Court did not provide any analysis of Plaintiffs’ arguments, and merely stated that their showing on this point was sufficient.

The bulk of the Court’s jurisdictional analysis was spent on the second requirement, which Defendants contested the most strongly. The Court stated that because Plaintiffs alleged that the many Defendants in the case sold products in Washington, and that Washington was a state in which Mr. Varney was exposed to asbestos, they made a “sufficient showing” to establish personal jurisdiction.  The Court was unconvinced by Defendants’ argument that because the Complaint did not make clear what state their specific products were used in, it was not clear that there was a connection between Plaintiffs’ claims against those specific Defendants and their conduct in Washington. The Court cited a concurring opinion from Supreme Court Justice Kennedy in J. McIntyre Machinery, Ltd. v. Nicastro, 564 U.S. 873, 880 (2011), for the proposition that Defendants were improperly focusing on the location of Mr. Varney rather than on their contacts with Washington.  Categorizing Defendants’ personal jurisdiction challenge as simply a motion to dismiss for failure to state a claim under a different name, the Court held that Plaintiffs had met their prima facie burden and denied Defendants’ motions.

The District Court’s decision in this matter is troubling for Defendants for a number of reasons. The first is the Court’s interpretation of the second requirement for specific jurisdiction to attach.  While it is true that the focus of this prong is the Defendants’ contact with the forum in question – here the State of Washington – the Court appeared to give little consideration to whether the Plaintiffs’ claims against these specific Defendants arose out of Washington or another location.  Many large companies sell their products in several locations, and thus have contacts, throughout the country. However, if Mr. Varney used their products in a state other than Washington (such as California), then Plaintiffs’ claims would actually arise out of Defendants’ contacts with that state, not Washington.  The failure to require plaintiffs to even allege such a critical fact potentially creates a situation in which a defendant is subject to liability in any state in which it did business, as long as plaintiffs allege that they were injured in that state, even if it was by a completely separate party.

Perhaps the most troubling issue with this decision is its apparent failure to take into account recent Supreme Court opinion which addressed precisely this issue. In Bristol-Myers Squib Co. v. Superior Court of California, San Francisco County, 137 S.Ct. 1773 (2017), the Supreme Court, concerned with past overbroad applications of personal jurisdiction in the Ninth Circuit, stressed the strict limits on a court’s power to hear a case and reminded lower courts that the “primary concern” in determining whether personal jurisdiction is present “is the burden on the defendant.” Id. at 1780. See our full coverage of the Bristol-Myers decision here, and a review of major personal jurisdiction decisions from 2017 here. In its opinion, the Supreme Court reiterated that “specific jurisdiction is confined to adjudications of issues deriving from … the very controversy that establishes jurisdiction.” Id. (emphasis added).  In other words, regardless of how many defendants a plaintiff sues, the only thing that matters when determining whether personal jurisdiction exists is whether that specific defendant’s conduct in that state is what gives rise to the plaintiff’s claims.  The District Court’s failure to acknowledge Supreme Court’s directive Bristol-Myers Squib should serve as a reminder to those contesting personal jurisdiction in similar fact scenarios to reiterate the Supreme Court’s decision in Bristol-Myers Squib in their briefing.

[1] The motions brought separately by the Defendants were nearly identical, to the point that the Court addressed the motions in the same decision.

[2] Plaintiff Donald Varney is now deceased, but is still listed as an active Plaintiff in the case.

[3] The parties did not contest general personal jurisdiction, and the Court did not analyze whether it existed in this case.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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