Burnside v. Simpson Paper Co.

Decision Date20 July 1992
Docket NumberNo. 27823-1-I,27823-1-I
Citation66 Wn.App. 510,832 P.2d 537
CourtWashington Court of Appeals
Parties, 59 Fair Empl.Prac.Cas. (BNA) 744, 7 IER Cases 1807 A. Deane BURNSIDE, an individual, Respondent, v. SIMPSON PAPER COMPANY, a Washington corporation, Appellant.

Michael R. Rayton, John P. Mele, Seattle, for appellant, cross-respondent.

Jeffrey Needle, Paul Gillingham, Seattle, E. Douglas Pibel, Monroe, for respondent, cross-appellant.

AGID, Judge.

Simpson Paper Company (Simpson Paper) appeals the judgment entered against it on claims of age discrimination and breach of implied contract brought by a former employee, A. Deane Burnside (Burnside), following the termination of his employment by Simpson Paper. Burnside cross-appeals the trial court's grant of a directed verdict in favor of Simpson on the issue of emotional distress.

Burnside was hired by Simpson Timber Company (Simpson Timber), a Washington corporation headquartered in Seattle, in February 1966. At the time he was hired, Burnside received a copy of the Simpson Management Guide. He was instructed to rely on the Guide in his treatment of other employees, and he testified he also relied on it to govern Simpson Timber's treatment of him. In 1982, Burnside was transferred to Simpson Paper, a wholly-owned subsidiary of Simpson Timber, 1 as a result of an internal restructuring within the two companies. Simpson Paper is a Washington corporation headquartered in San Francisco, California. After Burnside was transferred, Burnside's new supervisor at Simpson Paper, John Fannon (Fannon), asked Burnside to move from Seattle, where he had lived since 1966, to San Francisco. Burnside complied and moved to San Francisco in 1983, where he bought a condominium. He continued to maintain his home in Seattle where his wife continued to reside. Burnside returned to Seattle almost immediately following his termination in November 1984.

While he was employed by Simpson Paper, Burnside held the position of Marketing Manager Pulp. Burnside's primary responsibility was to market wood pulp produced by a Simpson Paper mill located in Eureka, California. He was also responsible for purchasing other types of pulp from other paper mills and suppliers. During the nearly 19 years Burnside worked for Simpson Timber and Simpson Paper, the Japanese pulp market became a major outlet for Simpson Paper pulp products. Up to the time Fannon became his supervisor, Burnside received consistently high annual performance evaluations.

Burnside made his first trip to Japan in the early 1970s when the Japanese pulp market was just beginning to develop. The structure of the Japanese distribution system made it necessary for Simpson Paper to sell its pulp through local sales agencies, which in turn resold the pulp to end-user mills. Simpson Paper initially hired Price & Pierce International (Price & Pierce) as its agent in 1976, and later retained Crown Zellerbach International (CZI) in that capacity as well. Price & Pierce also employed Carol Nett, Burnside's wife, for a period of time as a consultant in her capacity as president of Evergreen Consulting. During that time, she was also hired as a temporary pulp coordinator by Simpson Paper. She sometimes accompanied Burnside to Japan and attended business meetings.

Fannon first visited Japan in 1983. During that trip, he and Burnside met with Simpson Paper's sales agents and some customers. Fannon returned to Japan alone in November 1984. While there, Fannon met with Katsumi Sasaki, a Japanese employee of Price & Pierce, and Kinji Yasu, a Japanese employee of CZI, who complained, as some customers purportedly did as well, 2 that Carol Nett sometimes attended business meetings, that Burnside was lazy and arrogant, and that he preferred fine wines to making customer calls. Fannon testified that, as a result, he believed that Simpson Paper's image and credibility in Japan were threatened. On November 19, 1984, the day after he returned from Japan, Fannon met with Burnside and informed him that, based on the reports concerning his behavior Fannon had received while in Japan, he was terminated. No one investigated the validity of those reports prior to Burnside's termination, nor was Burnside given an opportunity to respond to the allegations that were made. Burnside was 58 years old at the time he was terminated. He was replaced as Marketing Manager Pulp by Keith Anderson, a 33-year-old with no previous international experience in marketing pulp. 3

After his termination, Burnside worked for Evergreen Consulting, an import-export business he owned jointly with his wife. He filed this action alleging age discrimination in violation of RCW 49.60 and breach of implied contract in July 1986. The jury returned a verdict in Burnside's favor.

I. SUBJECT MATTER JURISDICTION

Simpson Paper contends that the trial court lacked subject matter jurisdiction over Burnside's claim for age discrimination under RCW 49.60. A lack of subject matter jurisdiction can be raised at any stage of the proceedings. RAP 2.5(a); CR 12(h)(1). Subject matter jurisdiction refers to a court's power to hear and determine cases of the general class to which the proceedings before it belong. In re Adoption of Buehl, 87 Wash.2d 649, 655, 555 P.2d 1334 (1976); 21 C.J.S. Courts § 18 (1990). Washington's superior courts have broad and comprehensive original jurisdiction in all cases in which jurisdiction has not by law been vested exclusively in some other court. Const. art. 4, § 6. Because the Washington State Constitution confers such a broad grant of jurisdiction on the superior courts, exceptions to that jurisdictional grant will be narrowly read. Orwick v. Seattle, 103 Wash.2d 249, 251, 692 P.2d 793 (1984). If a Legislature has shown no indication of its intention to limit jurisdiction, an act should be construed as imposing no limitation. 21 C.J.S. Courts § 13.

Simpson Paper argues that the trial court lacked subject matter jurisdiction based on its interpretation of the language of RCW 49.60.010, which recites in part:

49.60.010. Purpose of Chapter

This chapter shall be known as the "law against discrimination". It is an exercise of the police power of the state for the protection of the public welfare, health, and peace of the people of this state, and in fulfillment of the provisions of the Constitution of this state concerning civil rights. The legislature hereby finds and declares that practices of discrimination against any of its inhabitants because of race, creed, color, national origin, sex, marital status, age, or the presence of any sensory, mental, or physical handicap are a matter of state concern, that such discrimination threatens not only the rights and proper privileges of its inhabitants but menaces the institutions and foundation of a free democratic state. A state agency is herein created with powers with respect to elimination and prevention of discrimination in employment ... because of ... age[.]

Specifically, Simpson Paper contends that the reference to "inhabitants" in this section denies Washington courts subject matter jurisdiction over claims under RCW 49.60 brought by anyone who is not a Washington resident. They argue that Burnside was not a Washington resident because he lived in San Francisco when he was fired. Neither RCW 49.60 nor the decisions applying it defines "inhabitant."

Rules of statutory construction provide that, as a general matter, "the spirit and intent of the statute should prevail over the literal letter of the law", and that statutes should be interpreted in that manner which "best advances the perceived legislative purpose." Wichert v. Cardwell, 117 Wash.2d 148, 151, 812 P.2d 858 (1991). A literal reading of a statute is to be avoided if it would result in unlikely, absurd or strained consequences. State v. Neher, 112 Wash.2d 347 351, 771 P.2d 330 (1989). In addition, RCW 49.60 itself provides:

The provisions of this chapter shall be construed liberally for the accomplishment of the purposes thereof.... Nor shall anything herein contained be construed to deny the right to any person to institute any action or pursue any civil or criminal remedy based upon an alleged violation of his civil rights.

RCW 49.60.020. See also Phillips v. Seattle, 111 Wash.2d 903, 908, 766 P.2d 1099 (1989) (the statutory protections against discrimination are to be liberally construed and their exceptions narrowly confined).

To determine the sense in which a term concerning residence is used in a statute, it is necessary to look to the object or purpose of the statute in which the term is employed. Wichert, 117 Wash.2d at 151, 812 P.2d 858. Neither the title of RCW 49.60.010--"Purpose of Chapter"--nor the text contains any language suggesting any intent to impose jurisdictional limitations. While the section refers generally to the inhabitants of Washington state as the intended beneficiaries of RCW 49.60, that reference does not include any limiting language, e.g., "only," that would provide a basis for concluding that the reference should be read in a restrictive manner. The reference to "the people" in the preceding sentence similarly suggests that "inhabitants" is simply a general reference and not intended to impose residence requirements on those who would seek redress under the statute. 4

Limiting the application of RCW 49.60 only to cases alleging age discrimination against Washington inhabitants, as Simpson Paper proposes, would effectively allow Washington employers to discriminate freely against non-Washington inhabitants. 5 To interpret the statute in a manner that discriminates between Washington residents and residents of other states would be to undermine the fundamental purpose of the Act, i.e., eliminating discrimination, and would itself raise serious constitutional questions. Interpreting the statute in a manner that permits discrimination by Washington corporations in some cases would also...

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