Washington’s Consumer Protection Act extends to out-of-state persons injured by unfair business practices of in-state entities

Posted Monday, February 8, 2016 by Pivotal Law Group

Washington State protects consumers against unfair business practices in a variety of ways. One of those ways is the Consumer Protection Act, RCW 19.86 (also known as the CPA). The CPA forbids business practices that are unfair or deceptive. It also allows people to sue when an unfair or deceptive business practice has caused them injury to their business or property.

In Thornell v. Seattle Service Bureau, Inc., Case No. 91393-5, the Washington State answered two questions about how far the CPA extends to out-of-state actors. First, does the CPA allow non-Washington State residents to sue Washington State entities for allegedly deceptive acts? Second, does the CPA allow non-Washington State residents to sue non-Washington State entities for allegedly deceptive acts of its in-state agents? The Court answered “yes” to both questions.

The plaintiff in Thornell lives in Texas. She allegedly received deceptive debt collection letters from Seattle Service Bureau, a Washington State corporation attempting to collect a debt on behalf of State Farm Mutual Automobile Insurance Company, an out-of-state insurance company.

Regarding the first question, the Supreme Court noted that the CPA’s statutory provisions are “broadly worded.” It allows “[a]ny person” to sue for a violation, relates to “any commerce directly or indirectly affecting the people of the state of Washington,” and “shall be liberally construed that its beneficiary purposes may be served.”

In the Court’s view, the purposes of the CPA are served by allowing out-of-state residents to sue in-state entities. Otherwise, unscrupulous entities could escape liability, and honest businesses could suffer a competitive disadvantage. This would affect Washington state economy and the Washington public at large.

The Court had previously held in State v. Reader’s Digest Ass’n, 81 Wn.2d 259, 501 P.2d 290 (1972), that the CPA prohibits unfair and deceptive practices of out-of-state entities against Washington State residents. Thornell extends that logic by holding that the inverse—prohibiting unfair and deceptive practices of in-state entities against out-of-state residents—is also true.

Regarding the second question, the Court held that “A principal cannot send agents into a state to commit CPA violations in order to avoid liability by virtue of its out-of-state residence.”

This decision shows the breath of the CPA’s protections, not just of Washington State residents, but of anyone injured by unfair business practices connected to this state.

If you believe you are the victim of unfair or deceptive business practices, please contact us.

Photo credit: Pictures of Money, used under the Creative Commons license.