Justia Washington Supreme Court Opinion Summaries

Articles Posted in Business Law
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Avnet Inc. was a New York corporation, headquartered in Arizona, and a major distributor of electronic components and computer technology worldwide. Avnet sold products through its headquarters in Arizona and through its many regional sales offices, including one in Redmond, Washington. Following an audit, the Washington State Department of Revenue (Department) determined that from 2003 to 2005, Avnet underreported its business and operations (B&O) tax liabilities by failing to include its national and drop-shipped sales in its tax filings. At issue in this appeal was whether national and drop-shipped sales were subject to Washington's B&O tax under the dormant commerce clause and the Department former "Rule 193." The Washington Supreme Court concluded that neither the dormant commerce clause nor Rule 193 barred the imposition of a B&O tax to Avnet's national and drop-shipped sales delivered in Washington. View "Avnet, Inc. v. Dep't of Revenue" on Justia Law

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Alsco, Inc. was a textile rental and sales company that supplied uniforms, linens, and other products to other businesses in industrial, hospitality, health care, and other fields. Alsco did not provide products or services for resale. Alsco and its employees were covered by a collective bargaining agreement (CBA). The issue this case presented for the Supreme Court's review turned on whether Alsco was a "retail or service establishment" (RSE) under chapter 49.46 RCW for purposes of an exemption to the overtime pay requirement. The trial court granted the employees' motion for summary judgment regarding entitlement to overtime pay, finding that Alsco was not an RSE for purposes of the overtime pay exception. In granting the employees' subsequent motion for summary judgment on the issue of calculating the amount of overtime due, the court calculated the "regular rate of pay" by dividing the total weekly compensation actually paid by 40 hours, not by hours actually worked. The Washington Supreme Court accepted direct review and reversed the trial court. The Supreme Court held that Alsco was an RSE for purposes of the overtime pay requirement. View "Cooper v. Alsco, Inc." on Justia Law

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The State of Washington sued more than 20 foreign electronics manufacturing companies (including 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. After review, the Washington Supreme Court affirmed the Court of Appeals. View "Washington v. LG Elecs., Inc." on Justia Law

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Washington orchardists Harold and Shirley Ostenson (collectively Ostenson) and California organic fruit broker Greg Holzman (d/b/a Greg Holzman, Inc. (GHI)) formed Pac Organic Fruit LLC (Pac-O) in 1998. The business operated from 1998 through 2004 but collapsed in 2005. During 2005, Pac-O defaulted on its operating line of credit and lease payments, Holzman fired Ostenson, and the bank foreclosed on the packing facility. Thereafter, Holzman, acting as Pac-O's agent, executed a demand promissory note in favor of GHI and transferred Pac-O' s assets to GHI to satisfy the note. In early 2007, Ostenson filed a voluntary chapter 11 bankruptcy petition. Later that year, a creditor of Pac-O, Northwest Wholesale Inc., filed this action against Pac-O, Ostenson, and GHI, alleging a fraudulent conveyance from Pac-O to GHI. Ostenson filed cross claims and/or third party claims against Pac-O, Holzman, GHI, and Total Organic LLC (another Holzman company). Ostenson claimed Holzman and his companies (collectively Holzman defendants or HDs) were as a derivative action on behalf of Pac-O. The trial court dismissed Northwest Wholesale's claims following a settlement. Thereafter, the only remaining claims were Ostenson's responsive claims against Pac-O (seven counts) and his derivative claim (count VIII) against HDs. The trial court: (1) rejected Ostenson's contention that HDs had waived a CR 41 motion by putting on evidence; (2) rejected Ostenson's contention that HDs had consented to the derivative action in the stipulation in Ostenson's bankruptcy proceeding; and (3) ruled that Ostenson relinquished membership in Pac-O with his bankruptcy filing. Ostenson moved for reconsideration, arguing for the first time that federal bankruptcy law preempted the Washington Limited Liability Company Act (WALLCA, chapter 25.15 RCW) regarding dissociation of LLC members upon filing bankruptcy. The trial court denied Ostenson's motion. Ostenson appealed, and Division Three affirmed. Upon review, the Supreme Court held that the dissociation provision found in RCW 25.15. 13 0(1)(d) was not preempted by federal bankruptcy law and affirmed the dismissal of the former LLC member's derivative claim under the facts of this case. View "Nw. Wholesale, Inc. v. Pac Organic Fruit, LLC" on Justia Law

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In 2013, SeaTac city voters approved a local initiative to establish the minimum wage for hospitality and transportation workers at $15-per-hour. Opponents of "Proposition 1" challenged the validity under state and federal law. The trial court largely rejected the challenges, with two exceptions: (1) under state law, Proposition 1 could not be enforced at the Seattle-Tacoma International Airport; and (2) federal labor law preempted a provision of Proposition 1 protecting workers from certain types of retaliation. The Washington Supreme Court reversed both of these rulings, holding that Proposition 1 could be enforced at the Seattle-Tacoma International Airport because there was no indication that it would interfere with airport operations. The Court also held that federal labor law did not preempt the provision protecting workers from retaliation. The Court otherwise affirmed the trial court and upheld Proposition 1 in its entirety. View "Filo Foods, LLC v. City of SeaTac" on Justia Law

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The issue this case presented for the Supreme Court's review centered on a challenge to the State Liquor Control Board's spirits distribution licensing fee structure brought by Association of Washington Spirits and Wine Distributors (Association). Specifically, the Association challenged the Board's decision to exempt distillers who distribute their own manufactured spirits and others acting as distributors pursuant to certificates of approval from contributing to a shortfall of $104.7 million in licensing fees imposed on persons holding spirits distributor licenses. The Association asked the Supreme Court to hold that the distillers must contribute proportionately to eliminating the shortfall. The Court rejected the Association's arguments, holding that the Board acted within its authority and did not act arbitrarily or capriciously. Additionally, the Board did not violate the privileges and immunities clause of article I, section 12 of the Washington State Constitution. View "Ass'n of Wash. Spirits & Wine Distribs. v. Liquor Control Bd." on Justia Law

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In 2009, Kristine Failla, a Washington resident and experienced salesperson, was looking for a job she could perform from her Gig Harbor home. She e-mailed Kenneth Schutz looking for such a position. Schutz was the founder and chief executive officer (CEO) of FixtureOne Corporation, which sells fixtures, casework, and displays for use in retail stores. Both FixtureOne and Schutz are based in Pennsylvania, and at the time of Failla's email, FixtureOne had no physical presence or customers in Washington. FixtureOne hired Failla as an account executive. In December 2010, Failla requested a promotion and a raise. Schutz agreed and promoted her to FixtureOne's vice president of sales, increased her yearly salary. Although there were outstanding commissions owed, Failla accepted the promotion and salary increase based on the assurances that the commissions would be paid. Schutz provided a draft employment agreement for Failla to sign in connection with the promotion. Among other things, the agreement contained a provision that it would be interpreted in accordance with Pennsylvania law. Failla proposed revisions to the agreement, but for reasons unknown neither Failla nor Schutz ever signed it. Failla continued working for FixtureOne from her Washington home until May 2011. She received regular paychecks, and the only issue in this case was the sales commissions owed to her that were not paid. In May 2011, Schutz emailed Failla to tell her that FixtureOne was "clos[ing] its doors" and ended her employment the following day. He assured Failla that FixtureOne would "pay your commissions and expenses asap in the next several weeks." For two months following her termination, Schutz returned Failla's requests for payment with various explanations as to why the commissions remained unpaid. Schutz eventually advised Failla that she would not receive a commission check and for the first time disputed whether such commissions were even owed. Failla filed suit against FixtureOne and Schutz for the wilfull withholding of wages, including an allegation that Schutz was individually liable under Washington's wage laws. Failla served Schutz in Pennsylvania but was unable to serve FixtureOne. Consequently the suit proceeded against Schutz alone. Failla and Schutz cross moved for summary judgment. Schutz argued that the trial court lacked personal jurisdiction because he did not have the requisite minimum contacts with the state, and even if Washington could exercise jurisdiction over him, there were genuine issues of material fact preventing the entry of summary judgment. The trial court concluded it had personal jurisdiction and denied Schutz's summary judgment motion. The court granted summary judgment to Failla, awarding double damages. The Court of Appeals reversed, holding that Washington's long-arm statute did not reach Schutz because the employment relationship between Failla and FixtureOne was inadequate to confer jurisdiction over Schutz. The Washington Supreme Court disagreed with the appellate court, and reversed. View "Failla v. FixtureOne Corp." on Justia Law

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The United States District Court for the Eastern District of Washington certified a question of Washington law to the Washington Supreme Court. This lawsuit involved two consolidated suits. Plaintiffs filed an amended complaint, alleging claims under Washington's Consumer Protection Act (WCPA), chapter 19.86 RCW, and the federal Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. sections 1692-1692p. These claims were based in part on plaintiffs' assertion that Midland Funding's business arrangements and debt collection processes violated the WCAA. The questions the federal court raised were: (1) Does the definition of "collection agency" in RCW 19.16.1 00(2) include a person who purchases claims that are owed or due or asserted to be owed or due another, undertakes no activity on said delinquent consumer account but rather contracts with an affiliated collection agency to collect the purchased claims, and is the named plaintiff in a subsequent collection lawsuit for said purchased claims?; and (2) Can a company file lawsuits in Washington on delinquent consumer accounts without being licensed as a collection agency as defined by RCW 19.16.1 00(2)? The Supreme Court responded that that debt buyers fall within the definition of "collection agency" under the Washington Collection Agency Act (WCAA), chapter 19.16 RCW, when they solicit claims for collection. Accordingly, if the court finds that a company (party in this suit) solicited claims, then the company was a collection agency and it could not file collection lawsuits without a license. View "Gray v. Suttell & Assocs." on Justia Law

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At issue in this case was whether Washington State courts have jurisdiction over a civil case arising out of a contract in which the tribal corporation waived its sovereign immunity and consented to jurisdiction in Washington State courts. The Washington Supreme Court held that it did not infringe on the sovereignty of the tribe to honor its own corporation's decision to enter into a contract providing for jurisdiction in Washington State courts. View "Outsource Servs. Mgmt. v. Nooksack Bus. Corp." on Justia Law

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The issue this case presented to the Supreme Court centered on proceedings to determine the fair value of shares in a closely held corporation. The primary question presented was whether the respondents, shareholders who disagreed with the corporation's estimate of that fair value, presented sufficient evidence to defeat the corporation's motion for summary judgment. Secondarily, the Court was asked to decide whether the trial court properly awarded attorney and expert fees to the corporation. After review, the Supreme Court held that respondents did not provide sufficient evidence to defeat the corporation's motion for summary judgment. Furthermore, the Court held respondents did not act in a manner that justified the trial court's award of fees to the corporation. Therefore, the Court of Appeals was reversed as to the summary judgment issue and affirmed as to the fees. View "SentinelC3 v. Hunt" on Justia Law