State v. LG Elecs., Inc.

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Supreme Court Clerk
IN THE SUPREME COURT OF THE STATE OF WASHINGTON
THE STATE OF WASHINGTON, )
)
Respondent, ) No. 91391-9
)
v. )
)
LG ELECTRONICS, INC.; KONINKLIJKE)
PHILIPS ELECTRONICS N.V. A/KIA )
ROYAL PHILIPS ELECTRONICS N.V.; )
PHILIPS ELECTRONICS INDUSTRIES )
(TAIWAN), LTD.; SAMSUNG SDI )
CO., LTD. F/K/A SAMSUNG DISPLAY )
DEVICE CO., LTD.; SAMSUNG SDI )
AMERICA, INC.; SAMSUNG SDI )
MEXICO S.A. DE C.V.; SAMSUNG SDI )
BRASIL LTDA.; SHENZHEN SAMSUNG)
SDI CO., LTD.; TIANJIN SAMSUNG SDI)
CO., LTD.; SAMSUNG SDI (MALAYSIA))
SDN. BHD.; PANASONIC )
CORPORATION OF NORTH AMERICA; ) Filed JUL 2 1 2:!16
HITACHI DISPLAYS, LTD.; HITACHI )
ELECTRONIC DEVICES (USA), INC.; )
and HITACHI ASIA, LTD., )
)
Petitioners, )
) En Bane
and )
)
LG ELECTRONICS U.S.A., INC.; )
PHILIPS ELECTRONICS INDUSTRIES; )
PHILIPS ELECTRONICS NORTH )
AMERICA CORPORATION; TOSHIBA )
CORPORATION; TOSHIBA AMERICA )
State v. LG Electronics, et. al., No. 91391-9
ELECTRONIC COMPONENTS, INC.; )
HITACHI, LTD.; MT PICTURE DISPLAY)
CO.; PANASONIC CORPORATION )
F/K/A MATSUSHITA ELECTRIC )
INDUSTRIAL CO., LTD.; CHUNGHWA )
PICTURE TUBES LTD.; CPTF )
OPTRONICS CO. LTD.; and )
CHUNGHWA PICTURE TUBES )
(MALAYSIA) SDN. BHD., )
)
Defendants. )
``````````~--)
GONZALEZ, J.-The State of Washington sued more than 20 foreign
electronics manufacturing companies (including the petitioners) for price
fixing. The State claimed the foreign companies conspired to fix prices by
selling CRTs (cathode ray tubes) into international streams of commerce
intending they be incorporated into products sold at inflated prices in large
numbers in Washington State.
The trial court dismissed on the pleadings, finding it did not have
jurisdiction over the foreign companies. The Court of Appeals reversed,
concluding the State alleged sufficient minimum contacts with Washington
to satisfy both the long arm statute and the due process clause. We affirm
the Court of Appeals.
FACTS
In 2012, the State, through the attorney general, filed suit against a
number of foreign electronics manufacturers. The State's complaint alleged
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State v. LG Electronics, et. a!., No. 91391-9
that between March 1995 and November 2007, the defendants violated the
antitrust provision of the Washington Consumer Protection Act, RCW
19.86.030, by conspiring to raise prices and set production levels in the
market for CRTs. CRTs were the dominant display technology used in
televisions and computer monitors before the advent of LCD (liquid crystal
display) panels and plasma display technologies. Due to the unlawful
conspiracy, the State alleged, Washington consumers and the State of
Washington itself paid supracompetitive prices for the products.
According to the State's complaint, North America was the largest
market for CRT televisions and computer monitors during the conspiracy
period. Clerk's Papers (CP) at 24. In 1995 alone, 28 million CRT monitors
were purchased in North America. I d. CRT monitors "accounted for over
90 percent of the retail market for computer monitors in North America in
1999," CRT televisions "accounted for 73 percent of the North American
television market in 2004," and "the CRT industry was dominated by
relatively few companies." Id. at 17, 15. In 2004, four of the defendants
together held a collective 78 percent share of the global CRT market. Id. at
15. The State alleged that during the conspiracy period, all the defendants
manufactured, sold, and/or distributed CRT products, directly or indirectly,
to customers throughout Washington.
3
State v. LG Electronics, et. al., No. 91391-9
The State asserted jurisdiction pursuant to the long-arm provision of
the Washington Consumer Protection Act, RCW 19.86.160. The State also
asserted that venue is proper in King County in part because
the Defendants' and their co-conspirators' activities were intended to,
and did have, a substantial and foreseeable effect on Washington State
trade and commerce; the conspiracy affected the price ofCRTs and
CRT Products purchased in Washington; and all Defendants knew or
expected that products containing their CRTs would be sold in the
U.S. and into Washington.
CP at 3.
Before any discovery took place, certain defendants (collectively
Companies) moved to dismiss the State's complaint for lack of personal
jurisdiction under CR 12(b)(2). The Companies supported their motions to
dismiss with affidavits and declarations stating that the Companies did not
sell any products directly to Washington consumers and did not conduct any
business in Washington. The Companies also requested attorney fees under
Washington's long-arm statute.
The State argued it had pleaded facts sufficient to establish personal
jurisdiction at the pleading stage. The State also argued that if the trial court
were to consider the Companies' affidavits and declarations, the motions to
dismiss would necessarily be converted into CR 56 motions for summary
judgment. The State requested the opportunity to conduct general and
4
State v. LG Electronics, et. a/., No. 91391-9
jurisdictional discovery. The Companies opposed the State's discovery
request.
The trial court granted the motion to dismiss for lack of personal
jurisdiction without expressly addressing the State's discovery request. Jd.
at 578-79. The trial court also authorized the Companies to request costs
and attorney fees. Id. at 597. In March 2013, the trial court entered final
judgment with prejudice under CR 54(b ). I d. at 598-608. It then granted the
requests for costs and attorney fees.' I d. at 1070-83. The State appealed. 2
The Court of Appeals reversed. State v. LG Elecs., Inc., 185 Wn.
App. 394, 425, 341 P.3d 346 (2015). It held that the State had sufficiently
alleged facts establishing personal jurisdiction and that an assertion of
jurisdiction did not offend traditional notions of fair play and substantial
justice. I d. at 423-24 .. The Court of Appeals reversed the award of attorney
fees below because the Companies were no longer prevailing parties, and
declined to award fees on appeal. I d. at 425.
1
The Philips entities, which did not submit briefing requesting costs and attorney fees,
are an exception.
2
Certain defendants also moved to dismiss on the grounds that the State's claims were
time barred. The trial court denied the motion and certified the matter for discretionary
review. The Court of Appeals granted discretionary review of that issue, linked the
appeals, and affirmed the trial court's denial of the statute oflimitations motions in a
separate published opinion. We granted the defendants' petition for review in that case
as well and resolve the statute of limitations question by separate opinion in State v. LG
Electronics, Inc., No. 91263-7 (Wash. July 14, 2016).
5
State v. LG Electronics, et. al., No. 91391-9
We granted the Companies' petition for review. State v. LG Elecs.,
Inc., 183 Wash. 2d 1002, 349 P.3d 856 (2015). The Companies are supported
by the Washington Defense Trial Lawyers and DRI-The Voice of the
Defense Bar (on one brief) and the United States Chamber of Commerce as
amici curiae. The State is supported in part by the Washington State
Association for Justice Foundation as amicus curiae.
ANALYSIS
I. Standard ofReview
We review CR 12(b )(2) dismissals for lack of personal jurisdiction de
novo. FutureSelect Portfolio Mgmt., Inc. v. Tremont Grp. Holdings, Inc.,
180 Wash. 2d 954, 963, 331 P.3d 29 (2014) (citing In re Estate ofKordon, 157
Wash. 2d 206, 209, 137 P.3d 16 (2006)). When a motion to dismiss for lack of
personal jurisdiction is resolved without an evidentiary hearing, the
plaintiff's burden is only that of a prima facie showing of jurisdiction. MBM
Fisheries, Inc. v. Bollinger Mach. Shop & Shipyard, Inc., 60 Wash. App. 414,
418, 804 P.2d 627 (1991) (citing Pedersen Fisheries Inc. v. Patti Indus.,
Inc., 563 F. Supp. 72,74 (W.D. Wash. 1983)).
II. Personal Jurisdiction
The parties do not dispute that as long as the assertion of personal
jurisdiction complies with due process, personal jurisdiction exists under the
6
State v. LG Electronics, et. a/., No. 91391-9
long-arm provision ofthe CPA, RCW 19.86.160. The due process clause
"requir[es] that individuals have 'fair warning that a particular activity may
subject [them] to the jurisdiction of a foreign sovereign."' Burger King
Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S. Ct. 2174, 85 L. Ed. 2d 528
(1985) (second alteration in original) (quoting Shaffer v. Heitner, 433 U.S.
186, 218, 97 S. Ct. 2569, 53 L. Ed. 2d 683 (1977)). Thus, a state may
authorize its comts to exercise personal jurisdiction over an out-of-state
defendant only ifthe defendant has certain minimum contacts with the state,
such that the maintenance ofthe suit does not offend traditional notions of
fairplay and substantialjustice. Int'l Shoe Co. v. Washington, 326 U.S. 310,
316, 66 S. Ct. 154, 90 L. Ed. 95 (1945). For personal jurisdiction to comply
with due process, three elements must be met: (1) purposeful '"minimum
contacts'" must exist between the defendant and the forum state, (2) the
plaintiffs injuries must '"arise out of or relate to"' those minimum contacts,
and (3) the exercise of jurisdiction must be reasonable, that is, consistent
with notions of "'fair play and substantial justice.'" Grange Ins. Ass 'n v.
State, 110 Wash. 2d 752, 758,757 P.2d 933 (1988) (quoting Burger King, 471
U.S. at 472-78).
To establish purposeful minimum contacts, there must be some act by
which the defendant '"purposefully avails itself ofthe privilege of
7
State v. LG Electronics, et. al., No. 91391-9
conducting activities within the forum State, thus invoking the benefits and
protections of its laws."' Burger King, 471 U.S. at 475 (quoting Hanson v.
Denc!da, 357 U.S. 235, 253, 78 S. Ct. 1228, 2 L. Ed. 2d 1283 (1958)). The
parties agree on the applicable test but disagree over whether this
requirement has been met.
A foreign manufacturer or distributor does not purposefully avail
itself of a forum when the sale of its products there is an "isolated
occurrence" or when the unilateral act of a consumer or other third party
brings the product into the forum state. World-Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286,295, 100 S. Ct. 559,62 L. Ed. 2d 490 (1980);
Williams v. Romarm, SA, 410 U.S. App. D.C. 405, 756 F.3d 777 (2014).
But where a foreign manufacturer seeks to serve the forum state's market,
the act of placing goods into the stream of cmmnerce with the intent that
they will be purchased by consumers in the forum state can indicate
purposeful availment. .!. Mcintyre Mach., Ltd. v. Nicastro, 564 U.S. 873,
881-82, 131 S. Ct. 2780, 180 L. Ed. 2d 765 (2011) (Kennedy, J., plurality
opinion); id. at 888-89 (Breyer, J., concurring); Asahi Metal Indus. Co. v.
Superior Court, 480 U.S. 102, 109-13, 107 S. Ct. 1026,94 L. Ed. 2d 92
(1987) (lead opinion of O'Connor, J.); id. at 117-21 (Brennan, J.,
concurring); id. at 122 (Stevens, J., concurring); World-Wide Volkswagen,
8
State v. LG Electronics, et. al., No. 91391-9
444 U.S. at 295-97; Grange Ins. Ass 'n, 110 Wash. 2d at 761-62. The stream of
commerce theory does not allow jurisdiction based on the mere
foreseeability that a product may end up in a forum state. See, e.g., World-
Wide Volkswagen, 444 U.S. at 295-97. Instead, the defendant's conduct and
connection with the state must be such that it should reasonably anticipate
being haled into court there. ld. The State argues that the Companies have
established purposeful minimum contacts by placing CRTs into the stream
of commerce with the knowledge and intent that their CRTs would be
incorporated into products sold in massive quantities throughout the United
States, including in large numbers in Washington. See State of Wash.' s
Suppl. Br. at I.
The Companies argue that the State cannot rely solely on the
substantial volume of sales in Washington to establish purposeful availment.
See Suppl. Br. ofPet'rs at 13-15. The Companies argue that the State is
required to show additional actions specifically targeting Washington, such
as forum-specific design or in-forum advertising. The Companies rely on
Asahi, 480 U.S. 102, andJ Mcintyre, 564 U.S. 873, where the United States
Supreme Court issued fractured opinions on the stream of commerce theory.
In Asahi, the United States Supreme Court considered the strean1 of
commerce theory in the context of an indemnification action brought in
9
State v. LG Electronics, et. al., No. 91391-9
California by Cheng Shin, a Taiwanese tire manufacturer, against Asahi, the
Japanese tire valve manufacturer that had sold an allegedly defective
component part to Cheng Shin. 480 U.S. at 106. Cheng Shin had bought
and incorporated into its tire tubes hundreds of thousands of Asahi valve
assemblies mmually for five years, and sold finished tubes throughout the
world, including California. Id. The United States Supreme Court
unanimously held that regardless of whether Asahi had sufficient minimum
contacts with California, it would be unfair to assert personal jurisdiction
over the two foreign parties in the indemnity action. !d. at 114. However,
the court fractured on whether Asahi had sufficient minimum contacts.
In a lead opinion authored by Justice O'Connor, four justices
concluded that placing a product into the stream of commerce with the mere
awareness that the product will be swept into the forum state is insufficient
to establish minimum contacts. The justices who signed the lead opinion
would have required additional conduct indicating an intent or purpose to
serve the specific forum state, including, for example, "designing the
product for the market in the forum State, advertising in the fonun State,
establishing channels for providing regular advice to customers in the forum
State, or marketing the product through a distributor who has agreed to serve
as the sales agent in the forum State." ld. at 112 (lead opinion of O'Connor,
10
State v. LG Electronics, et. al., No. 91391-9
J., joined by Relmquist, C.J., and Powell and Scalia, JJ.). The lead opinion
concluded that Asahi did not have purposeful minimum contacts. Id. at 113.
Justice Brennan's concurrence, joined by three justices, concluded
that Asahi had sufficient minimum contacts with California. Those justices
concluded that a defendant can be subject to jurisdiction consistent with due
process whenever the "regular and anticipated flow of products," as opposed
to "unpredictable currents and eddies," leads the product to be marketed in
the forum state. Id. at 116-17 (Brennan, J., joined by White, Marshall and
Blackmun, JJ.).
Justice Stevens concurred separately, finding no need to address the
minimum contacts inquiry but indicating that whether placement of a
product into the stream of commerce rises to purposeful availment will
depend on "the volume, the value, and the hazardous character of the
components" and opining that Asahi "has arguably engaged in a higher
quantum of conduct than ' [t]he placement of a product into the stream of
commerce, without more."' I d. at 122 (alteration in original) (Stevens, J.,
joined by White and Blackmun, JJ.). He noted that "[i]n most circumstances
I would be inclined to conclude that a regular course of dealing that results
in deliveries of over 100,000 units annually over a period of several years
11
State v. LG Electronics, et. al., No. 91391-9
would constitute 'purposeful availment' even though the item delivered to
the forum State was a standard product marketed throughout the world." Id.
In J. Mcintyre, the United States Supreme Court again considered the
stream of commerce theory and again issued a fractured opinion. 564 U.S.
873. J. Mcintyre Machinery Ltd., a British manufacturer, sold its metal
shearing machines to an independent United States distributor, which
marketed the machines throughout the United States. Id. at 878 (lead
opinion of Kennedy, J., joined by Roberts, C.J., and Scalia and Thomas, JJ.).
The distributor sold no more than four of the machines to a company in New
Jersey, and one allegedly malfunctioned and injured the plaintiff. Id.
Justice Kennedy's plurality, joined by three justices, adopted a position
consistent with Justice O'Connor's Asahi opinion and concluded that the
plaintiff had not established that J. Mcintyre engaged in conduct
purposefully directed at New Jersey. Id. at 885-86.
Justice Breyer, joined by Justice Ali to, concurred, but rejected the
plurality's strict rule and concluded on narrow grounds that under the court's
split opinions in Asahi, personal jurisdiction could not be exercised on the
basis of a single sale in a state because there was no regular flow of sales or
a showing of forum-specific targeting. Id. at 888-89 (Breyer, J., concurring,
joined by Alito, J.). These justices also rejected the expansive view
12
State v. LG Electronics, et. a/., No. 91391-9
proposed by New Jersey that a manufacturer is subject to personal
jurisdiction so long as it places its products into the stream of commerce and
should know that its products might end up being sold in any of the 50
states, reasoning that such an expansive rule would permit every State to
assert jurisdiction against any domestic manufacturer who sells its products
to a national distributor "no matter how large or small the manufacturer, no
matter how distant the forum, and no matter how few the number of items
that end up in the particular forum at issue." !d. at 891.
When a fragmented United States Supreme Court decides a case "and
no single rationale explaining the result enjoys the assent of five Justices,
'the holding of the Court may be viewed as that position taken by those
Members who concurred in the judgments on the narrowest grounds.'"
Marks v. United States, 430 U.S. 188, 193, 97 S. Ct. 990, 51 L. Ed. 2d 260
(1977) (quoting Gregg v. Georgia, 428 U.S. 153, 169 n.l5, 96 S. Ct. 2909,
49 L. Ed. 2d 859 (1976) (plurality opinion)). Applying the Marks standard,
we conclude that Justice Breyer's concurring opinion represents the holding
of J Mcintyre. We reject the Companies' argument that Justice Breyer's
opinion endorsed Justice O'Connor's construction of the stream of
commerce theory in Asahi. Justice Breyer explicitly did not choose either
test from Asahi. J Mcintyre, 564 U.S. at 889-90 (Breyer, J ., concurring).
13
State v. LG Electronics, et. a!., No. 91391-9
Under J. Mcintyre, a foreign manufacturer's sale of products through
an independent nationwide distribution system is not sufficient, absent
something more, for a State to assert personal jurisdiction over a
manufacturer when only one product enters a state and causes injury. I d. at
888-89 (Breyer, J., concurring). J. Mcintyre did not foreclose an exercise of
personal jurisdiction over a foreign defendant where a substantial volume of
sales took place in a state as part of the regular How of commerce. Our
interpretation of Mcintyre is consistent with that of other courts. See Russell
v. SNFA, 2013 IL 113909, 987 N.E.2d 778, 370 Ill. Dec. 12 (rejecting
defendant's contention that Justice Breyer's concurrence should be
constmed as adopting Justice O'Connor's construction of the stream of
commerce theory); Willemsen v. Invacare Corp., 352 Or. 191, 282 P.3d 867
(2012) (finding that the sale in Oregon in a two-year period of more than
1,000 wheelchairs containing the manufacturer's component part established
sufficient minimum contacts); see also Monje v. Spin Master Inc., No. CV-
09-1713-PHX-GMS, 2013 WL 2369888 (D. Ariz. May 29, 2013) (court
order) (finding that the sale of 4.2 million products throughout the United
States indicates purposeful avaihnent offorum state market); 3 cf Oticon,
3We note that this opinion is unpublished and citation by the parties is proper under GR
14.1(b) and Fed. R. App. P. 32.1(a).
14
State v. LG Electronics, et. al., No. 91391-9
Inc. v. Sebotek Hearing Sys., LLC, 865 F. Supp. 2d 501, 513 (D.N.J. 2011)
(finding insufficient minimum contacts where the defendant targeted the
national market but only five to nine sales of the product occurred in the
forum state).
We find the allegations in the State's complaint sufficient to establish
a prima facie case of purposeful minimum contacts. The State alleges that
(1) the Companies together dominated the global market for CRTs, (2) the
Companies sold CRTs into international streams of commerce with the
intent that the CRTs would be incorporated into millions of CRT products
sold across the United States and in large quantities in Washington, and (3)
along with their coconspirators, the Companies intended for their price-
fixing activities to elevate the price of CRT Products purchased by
consumers in Washington. CP at 15, 3. Taking these allegations as verities,
as we must at this stage, we agree with the State that "[t]he presence of
millions of CRTs in Washington was not the result of chance or the random
acts of third parties, but a fundamental attribute of [the Companies']
businesses." State ofWash.'s Suppl. Br. at 17. 4
4
The Companies also call to our attention Walden v. Fiore, where the United States
Supreme Court concluded that a Nevada court could not assert personal jurisdiction over
a police officer who seized cash from the plaintiffs at an airport in Georgia while they
were traveling from Puerto Rico to Nevada. _U.S._, 134 S. Ct. 1115, 188 L. Ed. 2d
12 (2014). The court concluded it was not sufficient to base minimum contacts solely on
the plaintiff's connections with Nevada and the fact that the plaintiffs felt the effects of
15
State v. LG Electronics, et. al., No. 91391-9
An exercise of jurisdiction based on the allegations in the State's
complaint is not foreclosed by J. Mcintyre, and to dismiss at this stage
before relevant jurisdictional discovery would be inconsistent with the legal
standards we apply under CR 12(b). While we have few CR 12(b)(2) cases,
we find our CR 12(b)(6) cases helpful by analogy. Our liberal notice
pleading rules are intended "to facilitate the full airing of claims having a
legal basis." Berge v. Gorton, 88 Wn.2d 756,759, 567 P.2d 187 (1977).
Consistent with this purpose, CR 8(a)(l) provides that a complaint need only
set forth "a short and plain statement of the claim showing that the pleader is
entitled to relief," and we have repeatedly emphasized that we grant CR
12(b)(6) motions for failure to state a claim very '"sparingly and with care."'
Orwick v. City of Seattle, 103 Wash. 2d 249, 254-55, 692 P.2d 793 (1984)
the delayed return of their gambling fi.mds while they were residing in Nevada. Under
those circumstances, the police officer's connection to Nevada was not purposeful but
merely '"random'" and "'fortuitous."' !d. at 1123 (quoting Burger King, 471 U.S. at
475). Walden is not helpful to our analysis in the present case, where it is alleged that the
Companies intended to serve the Washington market and injure Washington consumers
with price-fixed CRT Products. See CP at 3, 27; Calder v. Jones, 465 U.S. 783, 791, 104
S. Ct. 1482, 79 L. Ed. 2d 804 (1984) (holding that jurisdiction in California was proper
because intentional conduct by defendants in Florida was "calculated to cause injury to
respondent in California").
The dissent posits that we should look only to Calder and Walden, not to the J.
Mcintyre line of cases, in our personal jurisdiction analysis, distinguishing between a
"stream of commerce" test and an "effects" test. Dissent at 6. We note that this question
is not presented in this case, as neither of the parties asked us to distinguish these tests
and disregard the stream of commerce one. In the absence of briefing from the parties,
we decline to adopt the dissent's approach.
16
State v. LG Electronics, et. a/., No. 91391-9
(quoting 27 FEDERAL PROCEDURE§ 62:465 (1984) and citing 5 CHARLES
ALLEN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND
PROCEDURE§ 1349, at 541 (1969)). A complaint survives a CR
12(b)(6) motion if any state of facts could exist under which the claim could
be sustained. I d. at 255; Corrigal v. Ball & Dodd Funeral Home, Inc., 89
Wash. 2d 959, 961, 577 P.2d 580 (1978). We see no reason to apply a
different approach to a CR 12(b)(2) motion, and in fact we previously took
such an approach in FutureSelect, where we reversed a trial court's decision
to dismiss on the pleadings after considering numerous arguments for
dismissal, including a CR 12(b)(2) argument. 180 Wash. 2d at 959. There, we
concluded that "[a]t this stage of litigation, the allegations of the complaint
establish sufficient minimum contacts to survive a CR 12(b)(2) motion." I d.
at 963. We found that the trial court dismissed prematurely, some limited
discovery was warranted, and defendant "may renew its jurisdictional
challenge after appropriate discovery has been conducted." Id. at 966, 963.
Consistent with these standards, we find the State's complaint survives.
Nothing in our opinion precludes the Companies from renewing their
motions after further discovery bearing on relevant facts. 5 The Companies
5
Our dissenting colleague concludes the court lacks personal jurisdiction because the
State did not specifically allege in its complaint that the defendants had control over the
prices of CRT products sold in Washington. We note that, as discussed, the State alleged
17
State v. LG Electronics, et. al., No. 91391-9
argue that since they submitted declarations the State carmot stand on the
allegations in its complaint but must submit evidence to meet its burden,
citing federal case law holding that courts are not permitted to '"assume the
truth of allegations in a pleading which are contradicted by affidavit."'
Suppl. Br. ofPet'rs at 19 (internal quotation marks omitted) (quoting
Alexander v. Circus Circus Enters., Inc., 972 F.2d 261,262 (9th Cir. 1992)).
None of the Companies' affidavits contradict the stream of commerce
allegations in the complaint, however, except arguably that ofKoninklijke
Philips Electronics NV (KPNV), which claims it is merely a holding
company and did not manufacture any products. See CP at 105.
Jurisdictional discovery as to KPNV at this stage may be warranted because
"'pertinent facts bearing on the question of jurisdiction are controverted."'
Boschetto v. Hansing, 539 F .3d 1011, 1020 (9th Cir. 2008) (quoting Data
Disc, Inc. v. Sys. Tech. Assocs., 557 F.2d 1280, 1285 n.l (9th Cir. 1977)).
Prior to appropriate discovery, however, we decline to find that an allegation
in the complaint is defeated by a contrary statement in a declaration. 6 With
that the defendants conspired with CRT and CRT product manufacturers to "ensure[] that
price increases for CRTs were passed on to indirect purchasers of CRT Products." CP at
20. These allegations are sufficient to survive a motion to dismiss on the pleadings.
6
Given our resolution of the case, we decline the invitations of the parties and amici
curiae to outline specific procedures required for a trial court to resolve CR 12(b)(2)
motions. At this juncture, we leave it to the discretion of trial courts to resolve CR
12(b)(2) motions in accordance with relevant Washington court rules.
18
State v. LG Electronics, et. al., No. 91391-9
the State having sufficiently asserted purposeful minimum contacts at this
stage, the burden shifts to the Companies to present a compelling case that
the exercise of jurisdiction is unreasonable and inconsistent with notions of
fair play and substantial justice, '"consideration being given to the quality,
nature, and extent of the activity in the forum state, the relative convenience
of the parties, the benefits and protection of the laws of the forum state
afforded the respective parties, and the basic equities of the situation."'
FutureSelect, 180 Wash. 2d at 963-64 (internal quotation marks omitted)
(quoting Shute v. Carnival Cruise Lines, 113 Wash. 2d 763, 767, 783 P.2d 78
(1989)). At this stage, all of these considerations weigh strongly in favor of
finding that jurisdiction is reasonable. The inconvenience for the large
multinational Companies to defend themselves in the forum they
intentionally targeted with price fixed products does not outweigh the State's
strong interest in ensuring Washington citizens receive the protection of
state antitrust laws, especially since Washington is the only forum in which
indirect consumers ofCRTs may be entitled to recovery.
CoNCLUSION
Taking the allegations of the complaint as true, we find that the State
has made a prima facie showing of purposeful minimum contacts and that
asserting personal jurisdiction over the Companies is not unfair or
19
State v. LG Electronics, et. al., No. 91391-9
unreasonable. We affirm the Court of Appeals and remand for further
proceedings consistent with this opinion. 7
7 Given our disposition, we conclude that the Court of Appeals properly reversed the trial
court's award of attorney's fees to the companies, and we decline the companies' request
for attorney's fees for this appeal.
20
State v. LG Electronics, et. al., No. 91391-9
WE CONCUR:
21
State v. LG Electronics et al., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
No. 91391-9
GORDON McCLOUD, J. (concurring in part and dissenting in part)-The
State filed this antitrust action against several foreign manufacturers of CRTs 1 and
their out-of-state distributors alleging a conspiracy to fix the global market price of
CRTs. Defendants2 moved to dismiss due to lack of personal jurisdiction under Civil
Rule (CR) 12(b)(2) and supported their motions with unrebutted declarations about
their lack of contacts in our state.
1
CRTs (cathode ray tubes) are a form of display technology that was widely used
in televisions and computer monitors until the introduction of LCD (liquid crystal display)
and LED (light-emitting diode) displays.
2
Some defendants did not challenge Washington's jurisdiction. The relevant
defendants here are Koninklijke Philips Electronics NV; Philips Electronics Industries
(Taiwan) Ltd.; LG Electronics Inc.; Samsung SDI Co. Ltd.; Samsung SDI America Inc.;
Samsung SDI Mexico SA de CV; Samsung SDI Brasil Ltda.; Shenzhen Samsung SDI Co.
Ltd.; Tianjin Samsung SDI Co. Ltd.; and Samsung SDI (Malaysia) Sdn. Bhd. (Defendants).
State v. LG Electronics, et al., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
This case involves an intentional conspiracy to fix prices in violation ofRCW
19.86.030-not a defective product? The majority nevertheless applies a "stream
of commerce" test derived from fractured Supreme Court opinions involving
products liability, i.e., Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102,
107 S. Ct. 1026, 94 L. Ed. 2d 92 (1987) (plurality opinion) and J Mcintyre
Machinery, Ltd. v. Nicastro, 564 U.S. 873, 131 S. Ct. 2780, 180 L. Ed. 2d 765 (2011)
(plurality opinion), and concludes that the trial court had jurisdiction under one of
the nonmajority, nonplurality opinions in one of these cases. Majority at 8, 15. The
Supreme Court, however, has applied a different test to intentional torts. It holds
that when a plaintiff claims injury from the intentional acts of another, the test for
whether a court has specific personal jurisdiction over an out-of-state defendant is
the "effects" test articulated in Calder v. Jones, 465 U.S. 783, 104 S. Ct. 1482, 79 Lans. Ch.
3
Under RCW 19.86.030, "[e]very contract, combination, in the form of trust or
otherwise, or conspiracy in restraint of trade or commerce is hereby declared unlawful."
The legislature patterned this provision after the federal Sherman Act, 15 U.S.C. § 1. When
the Washington Legislature passed the Consumer Protection Act, ch. 19.86 RCW, it
intended for our courts to be gnided by the interpretation that the federal courts give to the
corresponding federal statutes. RCW 19.86.920. Federal courts apply two tests to evaluate
conduct that allegedly violates the Sherman Act. Both tests require proof of intentional
wrongdoing. Arizona v. Maricopa County Med. Soc'y, 457 U.S. 332, 344-45, 102 S. Ct.
2466,73 L. Ed. 2d 48 (1982) (plurality opinion) (per se price-fixing violations of Sherman
Act section 1); Reid Bros. Logging Co. v. Ketchikan Pulp Co., 699 F.2d 1292, 1296 (9th
Cir. 1983) (non-per-se violations).
2
State v. LG Electronics, eta!., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
Ed. 2d 804 (1984). See also Walden v. Fiore,_ U.S._, 134 S. Ct. 1115, 188 L.
Ed. 2d 12 (20 14 ). I would apply Calder's "effects" test and find no jurisdiction. But
even if a "stream of commerce" analysis applied, most Defendants 4 filed unrebutted
declarations showing that Washington lacked sufficient minimum contacts to
support jurisdiction under the controlling "purposeful avai1ment" standard for the
"stream of commerce" analysis articulated in World-Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286, 100 S. Ct. 559, 62 L. Ed. 2d 490 (1980). I therefore
respectfully dissent.
FACTUAL BACKGROUND
The State filed this antitrust action in Washington State against several foreign
manufacturers, marketers, and sellers ofCRTs, alleging that they colluded to fix the
global market price ofCRTs at supracompetitive levels in violation of the Consumer
Protection Act, chapter 19.86 RCW. Specifically, the complaint alleged that
Defendants sold these CRTs at inflated prices to out-of-state assemblers and that
these assemblers then incorporated the CRTs into end products (CRT Products) and
then later sold these CRT Products to consumers in Washington. According to the
4
There is one exception. Three defendants (Shenzhen Samsung SDI Co. Ltd.,
Samsung SDI Brasil Ltda., and Samsung SDI (Malaysia) Sdn. Bhd. (collectively SDI
Defendants) submitted declarations admitting that they shipped CRT component parts to a
manufacturer in Washington during the alleged conspiracy period. CP at 206.
3
State v. LG Electronics, et al., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
State, the end purchasers of CRT Products suffered the ultimate harm from the
passed-on overpricing. Clerk's Papers (CP) at 18, 20. In its complaint, the State
does not estimate how many CRT Products-or even how many of Defendants'
CRTs-were purchased by Washington consumers during the 12-year conspiracy
period, but notes that 28 million CRT monitors were purchased in North America in
1995 alone and that Defendants collectively held a 78 percent share of the global
CRT market. CP at 24, 15.
Defendants, who are not Washington residents, moved to dismiss due to lack
of personal jurisdiction. They argued, and filed declarations, to prove that they
lacked sufficient minimum contacts with the Washington forum. The State
acknowledges that Defendants operated mainly outside of Washington, with their
principal places of business in the Netherlands, South Korea, Taiwan, China,
Malaysia, Brazil, Mexico, and California. CP at 4-12. The State did not contest
Defendants' declarations filed in support of their CR 12(b)(2) motions showing that
they maintained no offices in Washington and employed no Washington employees.
CP at 40-42, 56-64, 84-86, 104-06,203-06. The State did not challenge Defendants'
showing that for many of them, their only connection with Washington was that the
CRTs they manufactured were incorporated into CRT Products by immediate
4
State v. LG Electronics, eta!., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
purchasers, and then the CRT Products were sold by those immediate purchasers to
nonparticipants in that original purchase, i.e., to Washington consumers.
The majority contends that personal jurisdiction is proper in Washington
because the complaint alleged that "(1) the [Defendants] together dominated the
global market for CRTs, (2) the [Defendants] sold CRTs into international streams
of commerce with the intent that the CRTs would be incorporated into millions of
CRT products sold across the United States and in large quantities in Washington,
and (3) along with their coconspirators, the [Defendants] intended for their price-
fixing activities to elevate the price of CRT Products purchased by consumers in
Washington." Majority at 15 (citing CP at 15, 3). Nowhere in the complaint,
however, did the State allege that Defendants had control over what costs their direct
.buyers passed on to the indirect end purchasers or that they controlled where their
buyers would choose to sell the CRT Products.
ANALYSIS
I. CONSPIRACY TO FIX PRICES IN VIOLATION OF RCW 19.86.030
IS AN INTENTIONAL WRONG, NOT A PRODUCT DEFECT, SO
JURSIDICTION SHOULD BE DETERMINED UNDER THE
CALDER "EFFECTS" TEST APPLICABLE TO INTENTIONAL
HARMS, NOT A "STREAM OF COMMERCE" TEST
APPLICABLE TO PRODUCTS LIABILITY
A. The Supreme Court Has Adopted Two Different Tests for Analyzing
a Defendant's "Minimum Contacts"
5
State v. LG Electronics, et al., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
The majority is certainly correct that a court cannot exercise specific personal
jurisdiction over an out-of-state defendant unless such jurisdiction is consistent with
the due process clause. Majority at 6-7; U.S. CONST. amend. XIV,§ 1. It is also
correct that the due process clause requires sufficient "minimum contacts" between
the defendant and the forum state to support such jurisdiction. I d. at 7 (citing Int 'l
Shoe Co. v. Washington, 326 U.S. 310,316,66 S. Ct. 154,90 L. Ed. 95 (1945)).
The Supreme Court, however, has applied two different tests for evaluating
the sufficiency of "minimum contacts" to support specific personal jurisdiction: ( 1)
the "stream of commerce" test derived from product liability cases, World-Wide
Volkswagen, Asahi, and J. Mcintyre; and (2) the "effects" test derived from
intentional tort cases, Calder and Walden. The first question for us is which test
applies here.
B. The Majority Finds Jurisdiction under Justice Brennan's "Chain of
Distribution" Analysis, Derived from Product Liability Cases, Even
Though J. Mcintyre Requires "Something More"
The majority applies a "stream of commerce" analysis to the jurisdictional
question in this case. More specifically, the majority applies one of several different
"stream of commerce" tests that some Supreme Court justices have endorsed but that
no Supreme Court majority has ever adopted as a holding. Majority at 8-14.
6
State v. LG Electronics, et al., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
The "stream of commerce" analysis was adopted by the Supreme Court in
product liability cases and has been applied by that Court only to product liability
cases. It was introduced as a basis for evaluating minimum contacts in World-Wide
Volkswagen-a products liability case involving a defective automotive fuel system.
444 U.S. at 297-98. In that case, the Court unanimously recognized that in the right
circumstances, a corporation could be subject to personal jurisdiction in a foreign
forum based on the distribution of its products in that foreign forum. Id. The Court
began by explaining that personal jurisdiction arises if the corporation "deliver[ed]
its products into the stream of commerce with the expectation that they will be
purchased by consumers in the forum State." Id. at 298. The Court further clarified,
though, that jurisdiction attached only where "the sale of a product of a manufacturer
or distributor ... is not simply an isolated occurrence, but arises from the efforts of
the manufacturer or distributor to serve, directly or indirectly, the market for its
products in [the forum state]." Id. at 297 (emphasis added). The Court rejected the
notion that jurisdiction could exist simply because it was foreseeable that the
defendant's product might enter the forum state. Id. at 296. The defendant's
purposeful availment of the benefits of the forum, the Court explained, is key. I d. at
295-98.
7
State v. LG Electronics, et al., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
Although the World-Wide Volkswagen Court unanimously agreed that
placement of a product in the "stream of commerce" could support jurisdiction over
an out-of-state defendant in product liability actions in certain circumstances, it later
split on what activities would be sufficient to trigger such jurisdiction. The fractured
opinions on this topic began in 1987 in Asahi. In Asahi, the question was whether a
California court could exercise jurisdiction over foreign manufacturers who sold
component products overseas, based on the fact that the overseas purchasers
integrated those component parts into retail products and some of those retail
products were sold in California. 480 U.S. at 106-07. Justice O'Connor's plurality
opinion proposed a "stream of commerce plus" test for evaluating personal
jurisdiction over an out-of-state defendant in such cases. Under that test, the plaintiff
must show that the defendant did more than simply place its products into the stream
of commerce to support such jurisdiction. The plaintiff must also show "conduct of
the defendant" indicating an intent or purpose to serve the market in the forum state,
such as designing the product for the forum market or marketing the product there.
!d. at 112.
In contrast, Justice Brennan proposed a "chain of distribution" test. Under
that test, the plaintiff need show only that the "regular and anticipated flow of
8
State v. LG Electronics, et al., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
products from manufacture to distribution to retail sale" occurred in the forum state
to support personal jurisdiction there. I d. at 117 (Brennan, J., concurring).
Justice Stevens used a third test. That test considered the defendant's "course
of dealing[s]" including the "volume, the value, and the hazardous character of the
components." Id. at 122 (Stevens, J., concurring).
None of these tests garnered a majority. Indeed, at least five justices rejected
each test. A majority of the Court instead resolved the jurisdictional question on
other grounds related to traditional notions of fair play and substantial justice. I d. at
113. Thus, the Court left open the confusing question of what to do with the various
tests that were articulated and then rejected.
As the majority correctly observes, the Supreme Court clarified these tests
somewhat in J Mcintyre. In that 2011 decision, the Court ruled that the plaintiff
must show that the defendant did "something more" than just sell its products
through a nationwide distributor with the hope that they might be sold in the forum
state to support forum jurisdiction. J Mcintyre, 564 U.S. at 888-89 (Breyer, J.,
concurring); see majority at 13-14. This "something more," the majority recognizes,
modified Justice Brennan's "chain of distribution" test. See majority at 13-14.
9
State v. LG Electronics, et al., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
The majority, however, denies that this "something more" is the equivalent of
Justice O'Connor's "plus" factor. 5 See majority at 14. Instead, the majority
interprets this "something more" as merely requiring more than a single, isolated
product ending up in the forum state. Majority at 13-14. Thus, the majority takes
the position that J. Mcintyre adopted the bulk of Justice Brennan's Asahi
concurrence (without saying so).
The majority then applies Justice Brennan's "chain of distribution" test (not
Justice O'Connor's Asahi plurality or World-Wide Volkswagen) and holds that the
trial court has jurisdiction over Defendants in this case because the State alleged that
Defendants placed large quantities of their products into international streams of
commerce with the knowledge that they will likely enter the Washington market at
5 This is probably because the State's complaint clearly fails Justice O'Connor's
"stream of commerce plus" test, which requires that the defendant either designed its
product for or actually marketed its products in the forum state. As Justice O'Connor
explained in Asahi, "the placement of a product into the stream of commerce"-even
hundreds of thousands of it-"without more, is not an act of the defendant purposefully
directed toward the forum State." Asahi, 480 U.S. at 112. Here, the State has not alleged
that Defendants marketed in Washington State or designed their products to target
Washington purchasers. On the contrary, the complaint alleged that Defendants had agreed
to use uniform CRT designs in order to make it easier for them to monitor their agreement
to fix prices for identical items. CP at 13. This is not enough to satisfy O'Connor's plus
factor.
10
State v. LG Electronics, et al., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
some point, and that many more than one of them did enter our state. Majority at
15. This is probably a correct application of Justice Brennan's test.
But J Mcintyre did not silently adopt Justice Brennan's Asahi concurrence.
In fact, a majority of the justices inJ Mcintyre held that New Jersey, the forum state,
lacked jurisdiction over the foreign manufacturer, despite the fact that its metal-
shearing machine was sold to a distributor who resold it there, and despite the fact
that the machine seriously injured a worker there. When one compares those facts
to the facts in the instant case, it is clear that there is even less of a connection
between the manufacturers and the plaintiff here than between the manufacturer and
the plaintiff there: J. Mcintyre at least entered the United States' stream of
commerce, rather than just the global, international market; attended annual
conventions in the United States; and sold its machines to a domestic distributor,
knowing that those machines would be sold throughout the United States. J
Mcintyre, 564 U.S. at 878. The State's complaint does not allege that the Defendants
ever even visited the United States, let alone Washington.
The majority seems to recognize that its analysis is somewhat inconsistent
with J Mcintyre, with the supposed J Mcintyre endorsement of Justice Brennan's
test, and even with World-Wide Volkswagen. It therefore supports its conclusion
with a fact peculiar to this case and missing from those stream of commerce cases:
11
State v. LG Electronics, eta!., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
the intentional nature of Defendants' alleged conspiracy. Majority at 15. I agree
that that fact is peculiar to this case and hence calls for a different analysis here. But
it does not call for yet another different stream of commerce test made especially for
the intentional conspiracy situation. Instead, it underscores the importance of using
the "minimum contacts" test that the Supreme Court has already adopted~
unanimously~for just such intentional tort situations: the Calder "effects" test. 6
C. The Calder "Effects" Test Is the One that the Supreme Court Applies
Where, as Here, Intentional Torts Are Alleged
Each time the Supreme Court has answered a jurisdictional question involving
an intentional act, it has unanimously applied the "effects" test rather than the
"stream of commerce" test. See Calder, 465 U.S. 783 (intentional act of libel);
Walden, 134 S. Ct. 1115 (intentional act of fraud). Under the Calder "effects test,"
6
The majority declines to consider whether the Calder "effects" test is the proper
test to apply on the ground that that issue is not properly presented. Majority at 16 n.4.
But the question presented is whether the State alleged sufficient minimum contacts with
Defendants for a Washington court to assert personal jurisdiction over them. To answer
that minimum contacts question, we must first decide which minimum contacts test applies.
And Defendants did cite Walden's minimum contacts rule. Suppl. Br. of Pet'rs at 15-17
("In Walden v. Fiore, the Court reaffirmed the principle that personal jurisdiction must be
grounded in actions by the defendant, not those by the plaintiff or third parties."). Amicus
United States Chamber of Commerce then expressly argued that we should apply Walden,
rather than the stream of c01mnerce decisions, to this case. Amicus Br. of United States
Chamber of Commerce at 9-11 ("The rule adopted by the court of appeals cannot be
reconciled with Walden's requirement that the defendant itself create a connection with the
forum.").
12
State v. LG Electronics, et al., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
the plaintiff must show that the defendant (l) committed an intentional act (2)
expressly aimed at the forum state, (3) causing harm, the brunt of which was
suffered-and which the defendant knew would likely be suffered-in the forum
state. CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1077 (9th Cir. 2011)
(quoting Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124, 1128 (9th
Cir. 2010)).
The Court applied this test for the first time in a case involving the intentional
tort oflibel. In Calder, a California actress filed a lawsuit in California against two
employees of a Florida magazine, alleging that they had published a libelous article
about her. 465 U.S. at 784. Although the Florida defendants never entered
California in connection with the article, the Supreme Court nevertheless held that
California had jurisdiction over them. The Court found the defendants had sufficient
contacts with California because they made phone calls to California sources to
obtain information for their article, they wrote the story about the plaintiffs
activities in California, they caused reputational injury in California by writing an
allegedly libelous article that was widely circulated in California, and they knew the
plaintiff would suffer the brunt of that injury in California where she resided.
Walden, 134 S. Ct. at 1123; Calder, 465 U.S. at 785-90.
13
State v. LG Electronics, et al., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
The Supreme Court again unanimously applied the "effects" test in evaluating
Nevada's jurisdiction over an action for fraud, another intentional act, in Walden. In
that case, airplane passengers detained at an airport in Georgia filed a Bivens 7 action
against several Georgia police officers, alleging that they had intentionally seized
and kept plaintiffs' cash without probable cause and later lied about it in false
affidavits. Walden, 134 S. Ct. at 1124. But the plaintiffs filed in Nevada, where
they lived, rather than Georgia, where the seizure occurred. The question for the
Supreme Court was whether the Nevada court had personal jurisdiction over these
out-of-state officers, since the officers knew at the time of the seizure that the
plaintiffs resided in Nevada and that they were headed to Nevada to gamble with the
monies seized. Id. at 1119. The Supreme Court unanimously held that Nevada
lacked jurisdiction. According to the Court, due process requires more than just
knowledge of the plaintiffs' strong forum connections or that the plaintiffs would
suffer foreseeable harm in the forum from the defendants' acts. Id. at 1125. It
requires that the defendants themselves have some contact with the forum state. See
id. at 1122. Because the officers' relevant conduct occurred entirely in Georgia, due
7
Bivens v. Six Unknown Named Agents of Fed. Bureau ofNarcotics, 403 U.S. 388,
91 S. Ct. 1999,29 L. Ed. 2d 619 (1971).
14
State v. LG Electronics, et al., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
process clause protections barred the Nevada court from exercising specific personal
jurisdiction over them. !d. at 1126.
The Walden Court applied Calder's "effects" test but distinguished Calder's
outcome because "the reputation-based 'effects' of the alleged libel [in Calder]
connected the defendants to California, not just to the plaintiff." !d. at 1123-24. This
strong connection "was largely a function of the nature of the libel tort. However
scandalous a newspaper article might be, it can lead to a loss of reputation only if
communicated to (and read and understood by) third persons." !d. at 1124.
Under controlling Supreme Court precedent, the Calder "effects" test applies
to actions, such as this, involving an intentional act.
D. The Supreme Court Unanimously Applied the "Effects" Test in
Calder Even Though a Product Was Involved
To be sure, an antitrust action involving a price-fixing consptracy over
component parts does involve a product, even though it also constitutes an
intentional act. Because of this, lower courts have struggled over which test to apply
in this hybrid context.
Many apply the "effects" test to such antitrust actions. E.g., In re Magnetic
Audiotape Antitrust Litig., 334 F.3d 204, 207-08 (2d Cir. 2003) (per curiam); In re
Cathode Ray Tube (CRT) Antitrust Litig., 27 F. Supp. 3d 1002, 1011 (N.D. Cal.
15
State v. LG Electronics, et al., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
2014); Am. Copper & Brass, Inc. v. Mueller Eur., Ltd., 452 F. Supp. 2d 821, 828-29
(W.D. Tenn. 2006); In re Vitamins Antitrust Litig., 270 F. Supp. 2d 15, 32 (D.D.C.
2003); see also In re Capacitors Antitrust Litig., No. 14-cv-03264-JD, 2015 WL
3638551, at *2 (N.D. Cal. June 11, 2015) (court order); In re Fasteners Antitrust
Litig., No. 08-md-1912, 2011 WL 3563989, at *12 (B.D. Pa. Aug. 12, 2011) (court
order); In re Bulk [Extruded] Graphite Prods. Antitrust Litig., No. 02-6030, 2007
WL 2212713, at *6 (D.N.J. July 30, 2007) (unpublished). 8 These courts reason that
the "effects" test applies because a price-fixing antitrust action primarily involves an
intentional tort. Bulk [Extruded] Graphite, 2007 WL 2212713, at *5; Fasteners,
2011 WL 3563989, at *12.
Others apply a "stream of commerce" analysis to such antitrust actions. E.g.,
Merriman v. Crompton Corp., 282 Kan. 433, 467-68, 146 P.3d 162 (2006);
Frankenfeld v. Crompton Corp., 2005 SD 55, 697 N.W.2d 378, 385-86; Holder v.
Haarn:ann & Reimer Corp., 779 A.2d 264, 273-74 (D.C. 2001); Four B Corp. v.
Ueno Fine Chems. Indus., Ltd., 241 F. Supp. 2d 1258, 1265 (D. Kan. 2003). The
Kansas Supreme Court's only reason for applying the "stream of commerce"
analysis in the antitrust price-fixing context was that at least one other court had
'Citation to these unpublished cases is permitted pursuant to GR 14.1(b) and Fed.
R. App. P. 32.1 (permitting citation to federal decisions issued on or after January 1, 2007).
16
State v. LG Electronics, et al., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
done so. Merriman, 282 Kan. at 468 (citing Hitt v. Nissan Motor Co., 399 F. Supp.
838 (S.D. Fla. 1975)).
Some courts apply both tests. E.g., In re Chocolate Confectionary Antitrust
Litig., 602 F. Supp. 2d 538, 562-65 (M.D. Pa. 2009); In re Dynamic Random Access
Memory (DRAM) Antitrust Litig., No. C 02-1486 PJH, 2005 WL 2988715, at *5-7
(N.D. Cal. Nov. 7, 2005) (court order). 9
The Supreme Court, however, applied only the "effects" test in Calder even
though it also involved a product-a magazine--that was widely distributed
throughout the forum state. The Calder Court upheld jurisdiction in California not
based on the fact that 600,000 copies of the defendants' magazine were sold weekly
in California, but "based on the 'effects' of their Florida conduct in California." 465
U.S. at 789. Calder therefore supports applying only the "effects" test in an action
such as this, where the gravamen of the claim is the defendant's intentional
wrongdoing and not a defect in a traveling product.
II. JURISDICTION IS LACKING UNDER BOTH THE CALDER
"EFFECTS" TEST AND THE CONTROLLING "STREAM OF
COMMERCE" TEST
A. Washington Lacks Personal Jurisdiction over Most Defendants
under the "Effects" Test
9 Citation to these unpublished cases is permitted pursuant to GR 14.1(b) and N.D.
Cal. Civ. Local R. 3-4(e).
17
State v. LG Electronics, et al., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
As discussed above, for a court to have personal jurisdiction over an out-of-
state defendant under the "effects" test, the plaintiff must show that the defendant
(1) committed an intentional act (2) expressly aimed at the forum state, (3) causing
harm, the brunt of which was suffered-and which the defendant !mew would likely
be suffered-in the forum state. CollegeSource, 653 F.3d at 1077.
The State did allege that Defendants committed an intentional act-
conspiracy to fix the price of CRTs. The injury alleged, however, relates to the
inflated price of CRT Products, not CRTs. The State did not allege any facts
showing that the conspiracy targeted purchasers ofCRTs in Washington. Nor did it
allege that any of the "unlawful agreements" forming the underlying conspiracy
occurred in Washington. In short, the complaint lacks any allegation that Defendants
ever sold products in Washington or ever had control over the prices of CRT
Products in Washington. The complaint instead alleged that some effects of the
conspiracy over CRT prices were ultimately felt in Washington by Washington
consumers who purchased CRT Products due to passed-on overpricing. CP at 17.
To be sure, the complaint did allege that Defendants expected direct
purchasers of their CRTs to pass on the inflated prices to retail consumers of CRT
Products: "Defendants concluded that they needed to make their price increase on
18
State v. LG Electronics, et al., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
CRTs high enough so that their direct customers would be able to justifY a
corresponding price increase to indirect purchasers. In doing so, Defendants' actions
ensured that price increases for CRTs were passed on to indirect purchasers of CRT
Products." CP at 20. But conclusory allegations about Defendants' expectations are
not facts that would support jurisdiction. Haberman v. Wash. Pub. Power Supply
Sys., 109 Wash. 2d 107, 120, 744 P.2d 1032,750 P.2d 254 (1987). At most, the State
alleged that Defendants knew retail consumers of CRT Products would likely be
harmed indirectly by their price-fixing ofCRTs.
The Supreme Court has already held that this is not enough under the "effects"
test. According to its unanimous decision in Walden, the plaintiff must allege more
than just the defendant's knowledge that the plaintiff resides in the forum state or
that some harm would likely be felt there. Indeed, "[t]he proper question is not
where the plaintiff experienced a particular injury or effect but whether the
defendant's conduct connects him to the forum in any meaningful way." Walden,
134 S. Ct. at 1125. This means that "jurisdiction over an out-of-state intentional
tortfeasor must be based on intentional conduct by the defendant that creates the
necessary contacts with the forum." !d. at 1123 (emphasis added). From this, it
follows that "the plaintiff cannot be the only link between the defendant and the
forum," no matter how significant the plaintiff's contact with the forum may be. !d.
19
State v. LG Electronics, eta!., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
at 1122. As discussed above, the State has not provided any link between
Defendants' conduct and this state other than the fact that end consumers indirectly
harmed by their alleged price-fixing conspiracy resided here. Jurisdiction is
therefore lacking under the Supreme Court's "effects" test.
The Defendants' declarations, for the most part, underscore that failure. Most
Defendants 10 submitted declarations showing that they neither sold nor advertised
CRTs in Washington State. CP at 40-42, 56-64, 84-86, 104-06, 203-06. In the
absence of any connection between these Defendants' acts and Washington, Walden
precludes Washington courts from asserting personal jurisdiction over them.
Several lower courts that have considered this issue in the same context as that
presented here-an intentional price-fixing conspiracy claim-have come to the
same conclusion. In Chocolate Confectionary, for example, the plaintiffs filed an
antitrust action in Pennsylvania, alleging that Mars Canada had conspired to fix the
price of chocolate confectionary products in the United States and that it caused
10
There is one exception. The SDI Defendants submitted declarations admitting
that they shipped CRT component parts to a manufacturer in Washington during the time
of the alleged conspiracy. CP at 206. This is sufficient conduct "expressly aimed" at
Washington to confer jurisdiction in Washington over the SDI Defendants. See Vitamins,
270 F. Supp. 2d at 32-33 (finding specific personal jurisdiction in Kansas under the
"effects" test based on the defendant's sale of price-fixed choline chloride products in
Kansas over a four year period).
20
State v. LG Electronics, eta!., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
American consumers to pay artificially inflated prices for chocolate goods. 602 F.
Supp. 2d at 548. Defendant Mars Canada disputed Pennsylvania's jurisdiction over
it. The district court applied the Calder "effects" test and found that it lacked
jurisdiction over Mars Canada because the plaintiffs had failed to show that the
company had specifically directed conduct toward the relevant forum (there, the
United States 11 ). Id. at 564-65. In particular, the district court noted that the
plaintiffs had not alleged that Mars Canada was involved in any discussions about
the pricing of American confectionary products or that it had any control over in-
forum pricing. !d.
Like the plaintiffs in Chocolate Confectionary, the State in this case failed to
allege that Defendants engaged in discussions about the pricing of CRT Products in
Washington or that they controlled the pricing of those products here. This is
because the CRT Products were assembled and sold by the direct purchasers not the
Defendants. 12 Accord CRT Antitrust Litig., 27 F. Supp. 3d at 1012-13 (dismissing
11
Federal courts have identified the United States as the relevant forum in federal
antitrust actions under the Sherman Antitrust Act. E.g., Go-Video, Inc. v. Akai Elec. Co.,
Ltd., 885 F.2d 1406, 1415-17 (9th Cir. 1989); CRT Antitrust Litig., 27 F. Supp. 3d at 1008.
12The majority infers from the State's complaint an allegation of control over the
pricing of CRT Products where none exists. Majority at 17 n.5. The State's complaint
alleged that "Defendants also agreed on the prices at which some ofthe Defendants would
sell CRTs to their own corporate subsidiaries and affiliates that manufactured CRT
21
State v. LG Electronics, et al., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
complaint for lack of jurisdiction in an indirect purchaser action involving price-
fixing allegations because there were no allegations in the complaint that the
defendants specifically shared information with their assemblers about the forum
market, or that they coordinated with them about in-forum pricing). Following
Chocolate Confectionary and CRT Antitrust Litig., Washington courts lack
jurisdiction over Defendants in this case.
The court came to the same conclusion in American Copper & Brass. 452 F.
Supp. 2d at 828-29. In that case, the plaintiffs sued a manufacturer of copper tubing
in Tennessee for conspiracy to fix the global price of copper tubing, which resulted
in indirect purchasers paying artificially high prices for such products in the United
States. Id. at 824. The defendant submitted affidavits stating that they never sold,
distributed, or sold for distribution any products into the United States. Id. at 828.
The court ruled that it lacked jurisdiction over the defendant because there was no
allegation of contact between the defendant and the forum (there, the United States).
Id. at 829. According to that court, it is not enough to say that the defendant '"[was]
the leading global manufacturer of copper tubing."' !d. The plaintiff must instead
allege conduct by the defendant '"expressly aimed"' at the forum. Id.
Products." CP at 20 (emphasis added). The State did not allege that Defendants had control
over or made agreements regarding the price of CRT Products.
22
State v. LG Electronics, et al., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
A district court for the Northern District of California also applied the
"effects" test in an antitrust action involving price-fixing allegations and found
jurisdiction lacking over the foreign defendants. DRAM, 2005 WL 2988715, at *6-
7. The district court reasoned, "Although plaintiffs allege that defendants have
committed an intentional act by way of their participation in a price-fixing
conspiracy, plaintiffs fail to allege that defendants' conspiratorial acts were
individually targeted towards any plaintiff whom defendants knew to be residents of
[the forum states]. Nor can plaintiffs do so, given the uncontroverted testimony
offered by defendants demonstrating that they have never manufactured nor sold any
[dynamic random access memory (DRAM)] in any of the forum states, nor do they
maintain any business or corporate formalities in the forum states, nor do they
receive any substantial revenue from the sales of DRAM (or any other products) in
the forum states." Id. at *6 (emphasis omitted).
Like the foreign manufacturers in Chocolate Confectionary, American
Copper & Brass, and DRAM, most Defendants 13 here did not direct activities toward
the forum state (Washington) and did not sell products to customers here. The fact
13
Koninklijke Philips Electronics NV; Philips Electronics Industries (Taiwan) Ltd.;
LG Electronics Inc.; Samsung SDI America Inc.; Samsung SDI Mexico SA de CV;
Shenzhen Samsung SDI Co. Ltd.; and Tianjin Samsung SDI Co. Ltd.
23
State v. LG Electronics, et al., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
that they dominated the global market share for CRT sales or that their products were
later incorporated into other products that were then assembled, sold, and distributed
to indirect purchasers by other parties in the forum state is insufficient under these
persuasive authorities.
B. The Result Is the Same under Controlling "Stream of Commerce"
Authority
Even if the majority were correct and the "stream of commerce" analysis did
apply here, the result would be the same under controlling "stream of commerce"
precedent. As previously discussed, despite the Supreme Court's attempts to clarify
"stream of commerce" jurisdiction in Asahi and J Mcintyre, it has yet to adopt any
of the "stream of commerce" tests articulated by Justice O'Connor, Justice Brennan,
and Justice Stevens in Asahi. As the majority correctly observes, the only thing five
Supreme Court justices agreed on in those cases was that a foreign manufacturer's
sale of products through an independent, nationwide distribution system is not
sufficient, absent something more, for a state to assert personal jurisdiction over the
manufacturer when only one product enters the forum state and causes injury.
Majority at 13-14 (citing J Mcintyre, 564 U.S. at 889 (Breyer, J., concurring) for
the narrowest holding). But this result, as Justice Breyer observed, stems not from
any of the tests articulated in Asahi, but from the application of World-Wide
24
State v. LG Electronics, eta!., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
Volkswagen. World-Wide Volkswagen thus seems to be the only controlling
Supreme Court authority on "stream of commerce" analysis even after Asahi and J.
Mcintyre. Accord State v. At!. Richfield Co., 2016 VT 22, _ Vt. _, _ A.3d _,
2016 WL 556174, at *6 (Feb. 12, 2016).
World-Wide Volkswagen unambiguously holds that foreseeability of a
defendant's product eventually entering the forum state, alone, is not sufficient to
support jurisdiction. 444 U.S. at 295-96. Nor can jurisdiction be based on the fact
that the defendant benefited financially from some collateral relation with the forum
state. Id. at 299. "Stream of commerce" jurisdiction arises only when "the
defendant's conduct and connection with the forum State are such that he should
reasonably anticipate being haled into court there." Id. at 297 (emphasis added).
Thus, "the mere 'unilateral activity of those who claim some relationship with a
nonresident defendant cannot satisfy the requirement of contact with the forum
State."' Id. at 298 (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228,
2 L. Ed. 2d 1283 (1958)). There must be purposeful availment by the defendant.
The purposeful availment test measures the defendant's conduct and
connections with the forum state, not the plaintiffs. This ensures notice and
fairness: "When a corporation 'purposefully avails itself of the privilege of
conducting activities within the forum State,' it has clear notice that it is subject to
25
State v. LG Electronics, eta!., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
suit there, and can act to alleviate the risk of burdensome litigation by procuring
insurance, passing the expected costs on to customers, or, if the risks are too great,
severing its connection with the State." Id. at 297 (citation omitted) (quoting
Hanson, 357 U.S. at 253).
The State's complaint failed to allege such conduct by Defendants in
Washington. See supra Section II.A. The only connection the complaint alleged
between Defendants and Washington stemmed from the unilateral activities of
others in incorporating Defendants' CRTs into new end products for sale in
Washington. The complaint does not allege that Defendants had any control over
these activities. The State also did not rebut or challenge the declarations that
Defendants submitted in support of dismissal that, for the most part, highlighted the
absence of any contacts between Defendants and Washington. Most Defendants
swore that they never sold any CRTs in Washington, never entered Washington,
never hired employees in Washington, and never transacted any business in
Washington. Based on these uncontroverted facts, Defendants did not purposefully
avail themselves of the benefits of doing business in Washington.
Several of our sister and lower courts have come to the same conclusion. In
Holder, plaintiffs sued foreign manufacturers for conspiring to fix the price of citric
acid, which resulted in higher prices for District of Columbia consumers buying
26
State v. LG Electronics, et al., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
products containing that ingredient. 779 A.2d at 267. The court applied the "stream
of commerce" test and held that it lacked personal jurisdiction over the nonforum
manufacturers. Id. at 269. To hold otherwise, the court explained, would be to find
that the defendants could be haled into court anywhere in the world that a product
containing any amount of citric acid produced by the defendants was ultimately sold.
Id. at 267. Extending global jurisdiction to all component part manufacturers, the
court found, would offend due process clause protections. Id.
The South Dakota Supreme Court applied the "stream of commerce" test and
came to the same conclusion-no personal jurisdiction-on similar facts in
Frankenfeld. 697 N.W.2d at 385-87. InFrankenfeld, plaintiffs alleged that out-of-
state manufacturers conspired to fix the price of rubber processing chemicals and
that the conspiracy caused South Dakota residents to pay supracompetitive prices
for rubber tires (that were manufactured elsewhere with those chemicals but
purchased in state). Id. at 380-81. The court found the defendants' connections to
South Dakota were too attenuated to support jurisdiction because those defendants
never delivered their products-the chemicals-into the stream of commerce with
the expectation that they would be purchased by consumers in South Dakota, and
indeed their products--the chemicals-were not purchased by South Dakotans. I d.
at 386. Instead, direct purchasers used the defendants' products (chemicals) to
27
State v. LG Electronics, et al., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
manufacture different products (tires) and those direct purchasers then sent those
tires to South Dakota. !d. This was such an "extremely attenuated connection" that
it could not support jurisdiction. Id. at 387.
The Kansas Supreme Court applied the same "stream of commerce" test and
came to the same conclusion-that it lacked jurisdiction-in a similar antitrust case
filed by indirect purchasers against manufacturers of rubber processing chemicals in
Merriman. 282 Kan. at 470. Like the South Dakota court, the Kansas court based
this decision on the fact that the manufacturer of plaintiffs tires did not operate in
Kansas and that there was no indication that the defendants had any control over or
collaboration with the tire manufacturers about where they marketed their tires. !d.
These cases illustrate that regardless of whether we apply the "effects" test for
intentional acts articulated in Calder and Walden or the "stream of commerce"
analysis articulated in World-Wide Volkswagen, the result is the same: Washington
courts lack personal jurisdiction over any of Defendants, except the SDI Defendants.
III. THE MAJORITY ERRS IN IGNORING DEFENDANTS'
DECLARATIONS
The majority reaches a contrary result m part by ignoring Defendants'
declarations. Majority at 17-18.
28
State v. LG Electronics, eta!., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
The majority's approach is inconsistent with Washington cases stating that
once the defendant files a CR 12(b)(2) motion challenging jurisdiction based on
affidavits and discovery, the plaintiff must present evidence establishing a prima
facie showing of jurisdiction. See Precision Lab. Plastics, Inc. v. Micro Test, Inc.,
96 Wn. App. 721,725,981 P.2d 454 (1999); MBMFisheries, Inc. v. Bollinger Mach.
Shop & Shipyard, Inc., 60 Wash. App. 414, 418, 804 P.2d 627 (1991); see also
Outsource Servs. Mgmt., LLC v. Nooksack Bus. Corp., 172 Wash. App. 799, 807, 292
P.3d 147 (2013) ("Once challenged, the party asserting personal jurisdiction bears
the burden of proof to establish its existence."), aff'd, 181 Wash. 2d 272, 333 P.3d 380
(2014).
In fact, we have held that when the court considers matters outside the
pleadings in ruling on a motion to dismiss for lack of personal jurisdiction, the court
should treat the motion as one for summary judgment and view the facts in the light
most favorable to the nonmoving party, not ignore all contrary facts as the majority
does. See Failla v. FixtureOne Corp., 181 Wn.2d 642,648 n.1, 649,336 P.3d 1112
(2014), cert. denied, 135 S. Ct. 1904 (2015); FutureSelect Portfolio Mgmt., Inc. v.
Tremont Grp. Holdings, Inc., 180 Wash. 2d 954,959,334 P.3d 29 (2014); Beaman v.
Yakima Valley Disposal, Inc., 116 Wash. 2d 697, 701 n.3, 807 P.2d 849 (1991); see
also Schumacher Painting Co. v. First Union Mgmt., Inc., 69 Wash. App. 693, 698,
29
State v. LG Electronics, eta!., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
850 P.2d 1361 (1993); Carrigan v. Cal. Horse Racing Bd., 60 Wash. App. 79, 83 n.3,
802 P.2d 813 (1990); Access Rd. Builders v. Christenson Elec. Contracting Eng'g
Co., 19 Wash. App. 477, 481, 576 P.2d 71 (1978); Puget Sound Bulb Exch. v. Metal
Bldgs.Insulation, Inc., 9 Wash. App. 284, 288-89, 513 P.2d 102 (1973).
These decisions comport with the approach that the federal courts typically
use when applying Fed. R. Civ. P. 12. 14 They permit a trial court to consider material
outside the pleadings and to exercise discretion when deciding the proper procedure
to resolve whether personal jurisdiction exists. 15
14
The Court of Appeals in this case declined to apply this analysis based on the
additional language in our state rule, which provides that"' [i]f, on a motion asserting the
defense numbered (6) to dismiss for failure of the pleading to state a claim upon which
relief can be granted, matters outside the pleading are presented to and not excluded by the
court, the motion shall be treated as one for summary judgment and disposed of as provided
in rule 56, and all parties shall be given reasonable opportunity to present all material made
pertinent to such a motion by rule 56."' State v. LG Elecs., Inc., 185 Wash. App. 394, 404,
341 P.3d 346 (emphasis omitted) (quoting CR 12(b)), review granted, 183 Wash. 2d 1002,
349 P .3d 856 (20 15). But the federal rule contains basically the same language in a slightly
different spot at Fed. R. Civ. P. 12(d), so that supposed distinction fails.
15
See Toys "R" Us, Inc. v. Step Two, SA, 318 F.3d 446, 456 (3d Cir. 2003)
(explaining that although plaintiff bears the burden of demonstrating facts supporting
personal jurisdiction, courts are to assist the plaintiff by allowing jurisdictional discovery
unless the claim is clearly frivolous (citing Pinker v. Roche Holdings Ltd., 292 F.3d 361,
368 (3d Cir. 2002) and quoting Mass. Sch. ofLaw at Andover, Inc. v. Am. Bar Ass 'n, 107
F.3d 1026, 1042 (3d Cir. 1997))); Data Disc, Inc. v. Sys. Tech. Assocs., 557 F.2d 1280,
1285 (9th Cir. 1977) (A defendant may move, before trial, to dismiss the complaint for lack
of personal jurisdiction, and because there is no statutory method for resolving this issue,
the mode of its determination is left to the trial court.); Krepps v. Reiner, 588 F. Supp. 2d
471, 479 (S.D.N.Y. 2008) ("In deciding a pretrial motion to dismiss for lack of personal
30
State v. LG Electronics, et al., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
We applied essentially this analysis in FutureSelect, 180 Wash. 2d at 959. In
that case, we considered whether a New York defendant had sufficient minimum
contacts with Washington to support personal jurisdiction. The trial court dismissed
on the pleadings after holding a hearing; considering numerous pleadings,
declarations, and briefs; and hearing arguments in favor of dismissal, including a CR
12(b)(2) argument. This court reversed, stating that "[a]t this stage of litigation, the
allegations of the complaint establish sufficient minimum contacts to survive a CR
12(b)(2) motion. However, [defendant] may renew its jurisdictional challenge after
appropriate discovery has been conducted." Id. at 963 (emphasis added). We
explained that in some cases it may be appropriate for the trial court to delay ruling
on a CR 12(b)(2) motion to allow for limited jurisdictional discovery: "Though we
leave open [defendant]'s ability to renew its motion, we find the trial court dismissed
prematurely. Some limited discovery and a resolution of disputed jurisdictional facts
jurisdiction, the Court has 'considerable procedural leeway. It may determine the motion
on the basis of affidavits alone; or it may permit discovery in aid of the motion; or it may
conduct an evidentiary hearing on the merits of the motion."' (quoting Marine Midland
Bank, NA v. Miller, 664 F.2d 899, 904 (2d Cir. 1981))); Allen v. Russian Fed'n, 522 F.
Supp. 2d 167, 181-82 (D.D.C. 2007) ("In contrast to a Motion to Dismiss brought under
Fed.R.Civ.P. 12(b)(6), the Court need not treat all of Plaintiffs' allegations as true when
determining whether personal jurisdiction exists over Defendants. Instead, the Court 'may
receive and weigh affidavits and any other relevant matter to assist it in determining the
jurisdictional facts."' (quoting United States v. Philip Morris, Inc., 116 F. Supp. 2d 116,
120 n.4 (D.D.C. 2000))).
31
State v. LG Electronics, et al., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
are warranted." !d. at 966. We directed the trial court on remand to permit
jurisdictional discovery and, if necessary, hold a jurisdictional hearing to resolve any
contested material facts. !d. at 972.
I acknowledge that we did not explicitly address whether the CR 12(b)(2)
motion would essentially be converted to a CR 56 motion at that point. But we have
addressed that question in the past, and we have said that the answer is yes. See
Beaman, 116 Wash. 2d at 701 n.3 ("Because the trial court received matters outside the
pleadings, Valley's CR 12(b) motion to dismiss for lack of jurisdiction is treated on
review as a summary judgment motion and the facts are viewed in the light most
favorable to Beaman.").
The majority's decision to analogize the CR 12(b)(2) jurisdictional inquiry to
the CR 8(a)(1) notice pleading inquiry strays from the approach of that prior
precedent. Majority at 16-17. I would not stray from this approach, especially
without any showing that it is incorrect and harmful. It allows the threshold
jurisdictional question to be answered more quickly and efficiently. The trial court
32
State v. LG Electronics, et al., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
therefore properly considered Defendants' declarations in ruling on jurisdiction. CP
at 597. 16
CONCLUSION
The trial court lacked personal jurisdiction over all Defendants except the SDI
Defendants. I would therefore reverse the Court of Appeals and reinstate the trial
court's dismissal ofthe complaint with prejudice as to all but the SDI Defendants.
16The State did ask for jurisdictional discovery in response to Defendants' motions
to dismiss. See CP at 226-27, 239-40, 252-53, 265-66; Pet. for Review at 125-26. The
trial court denied that request, but it did so because the State had failed to explain what
relevant facts it would seek that might contradict Defendants' declarations. Pet. for Review
at 137-38. This is likely because the Defendants' declarations did not contradict the
complaint's stream-of-commerce type allegations, but gave other relevant information. CP
at 40-42, 56-64, 84-86, 104-06, 203-06. The trial court's decision seems well within its
discretion: as both the majority and this dissent show, the jurisdictional question in this
case is a legal question on essentially undisputed facts about the limited direct contacts
between Defendants and this state.
33
State v. LG Electronics, et al., No. 91391-9
(Gordon McCloud, J., concurring in part/dissenting in part)
34