Litigation Update: Washington Supreme Court Clarifies Interplay Between CRLJ 14A(b) and CRLJ 12(h)(3)
Posted Aug 12, 2019
By Washington State Litigation Lawyer Todd J. Cook
The Washington Supreme Court’s recent decision in Banowsky v. Backstrom, No. 96200-6, 2019 WL 3333172, — P.3d – (Wn. July 25, 2019), clarifies the interplay between two seemingly conflicting Civil Rules for Courts of Limited Jurisdiction (“CRLJ”)—CRLJ 14A(b) and CRLJ 12(h)(3)—in a matter improperly (but in good faith) filed in Washington State District Court. Reversing the Court of Appeals, the Supreme Court held CRLJ 14A(b) both authorized and obligated the District Court to transfer the matter to the Superior Court of Washington, despite the District Court lacking subject matter jurisdiction from the moment the case was filed.
The Superior Court of Washington is a court of general jurisdiction, meaning that it has authority to hear “most claims, on most subjects, valued at most any amount.” Banowsky, slip op. at 1. Washington’s District Courts, on the other hand, are courts of limited jurisdiction. Washington’s Constitution invests the Legislature with authority to “prescribe by law the powers, duties and jurisdiction of [the District Courts].” Wa. Const. art. IV § 10. In civil cases, the District Courts’ jurisdiction is limited to cases in which “the value of the claim or the amount at issue does not exceed one hundred thousand dollars, exclusive of interest, costs, and attorneys’ fees.” RCW 3.66.020.
On the final day of the applicable statute of limitations, Banowsky acting pro se filed suit in the District Court for King County alleging a medical malpractice claim. The District Court is authorized to hear medical malpractice actions, but Banowsky alleged damages in excess of $100,000. After retaining counsel, Banowsky moved to transfer to the Superior Court under CRLJ 14A(b), claiming she had been unaware of the District Court’s $100,000 jurisdictional limit. The defendant, Backstrom, opposed the motion, arguing that CRLJ 12(h)(3) required dismissal because the District Court lacked subject matter jurisdiction. Dismissal would be fatal to Banowsky’s claim because it would be time-barred if she sought to refile.
The transfer motion required the District Court to harmonize CRLJ 14A(b) and 12(h)(3).
CRLJ 14A(b) provides:
When any party in good faith asserts a claim in an amount in excess of the jurisdiction of the district court or seeks a remedy beyond the jurisdiction of the district court, the district court shall order the entire case removed to superior court.
CRLJ 12(h)(3) provides:
Whenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter, the court shall dismiss the action.
The District Court sided with Backstrom and dismissed. The Superior Court and the Court of Appeals affirmed: each held the District Court lacks authority to transfer a case under CRLJ 14A(b) when the complaint affirmatively pleads damages in excess of the District Court’s jurisdictional limit. To give effect to CRLJ 14A(b), the Court of Appeals reconciled the transfer rule with CRLJ 12(h)(3) as follows:
Where a plaintiff properly invokes the subject matter jurisdiction of the district court by demanding relief that is within the amount-in-controversy limit of the court, CRLJ 14A(b) can afterward be applied to direct a transfer of the case to superior court For example, a plaintiff may later seek to remove the case to superior court on the good faith belief that although her damages initially were below the limit, they now appear to exceed the subject matter jurisdiction of the district court.
Banowsky, slip. Op. at 6 (quoting Banowsky v. Backstrom, 4 Wn. App. 2d 338, 349, 421 P.3d 1030 (2018)).
II. Supreme Court Holding & Analysis
The Supreme Court rejected the Court of Appeals’ analysis and reversed. The Court provided a thorough step-by-step analysis, which I summarize below without attempting to address every nuance of the Court’s analysis.
A. Court Assumed No Subject-Matter Jurisdiction
The parties did not dispute the District Court lacked subject matter jurisdiction over Banowsky’s case because she alleged damages in excess of $100,000. Therefore, the Supreme Court assumed without deciding the District Court lacked jurisdiction.
B. CRLJ 14A(b) Is An Exception to the Common-Law Rule Requiring Dismissal
As a general rule under Washington’s common-law “a court lacking jurisdiction of any matter may do nothing other than enter an order of dismissal.” Banowsky, slip op. at 9 (citations omitted). But the Supreme Court has recognized an exception to this common-law rule when a statute authorizes a court lacking subject matter jurisdiction to transfer the case to the proper court. See In re Personal Restraint of Johnson, 131 Wn.2d 558, 933 P.2d 1019 (1997) (analyzing RCW 2.06.030); In re Personal Restraint of Perkins, 143 Wn.2d 261, 19 P.3d 1027 (2001) (same). Guided by Johnson and Perkins, the Supreme Court held that “CRLJ 14A(b) is a constitutionally valid procedural rule that abrogates the common-law rule of dismissal in this situation.” Banowsky, slip op. at 8; see also id. at 11 (“Following Johnson and Perkins, the district court should have first considered whether another enactment gave it power to transfer and, if so, whether that enactment required the court to exercise that power.”)
C. CRLJ 14A(b) Applies and CRLJ 12(h)(3) Does Not In the Present Circumstances
Observing that both rules appeared to apply but required different outcomes, the Supreme Court resolved the apparent conflict between CRLJ 14A(b) (seemingly mandating transfer) and CRLJ 12(h)(3) (seemingly mandating dismissal). Two factors drove the Court’s decision. First, the Court held that CRLJ 14A(b) “better reflects this court’s intent” because it was amended more recently than CRLJ 12(h)(3) and “its substantive amendment bears directly on the issue presently before the court.” Second, the Supreme Court noted that applying CRLJ 14A(b) would “move the dispute to the proper forum for a determination on the merits” whereas “applying CRLJ 12(h)(3) would completely preclude a determination on the merits.” Id. at 15. The result under CRLJ 14A(b) would be more consistent with the directive in CRLJ 1 to “interpret the rules ‘to secure the just, speedy, and inexpensive determination of every action.’” Banowsky, slip op. at 14. Accordingly, the Supreme Court concluded that “CRLJ 14A(b), not CRLJ 12(h)(3), applies in this case.” Banowsky, slip op. at 14.
D. The CRLJs Apply Even When The District Court Lacks Jurisdiction
Backstrom argued that CRLJ 14A(b) cannot extent the District Court’s subject matter jurisdiction and the Court cannot apply its rules in the absence of jurisdiction. While agreeing that CRLJ 14A(b) does not extent the District Court’s jurisdiction, the Supreme Court “rejected the view that court rules apply only after the court has definitely acquired subject matter jurisdiction.” Banowky, slip op. at 17 (citations omitted). In fact, “if court rules did not apply unless a court has subject matter jurisdiction over a claim, a district court could not even apply CRLJ 12(h)(3) in cases such as this one.” Id. at 16. Thus, the District Court is authorized to order a transfer under CRLJ 14A(b) when it lacks subject matter jurisdiction.
E. Applying CRLJ 14A(b) Comports with Washington’s Constitution
Backstrom argued that “applying CRLJ 14A(b) would violate article IV, section 10 of the Washington Constitution,” which “gives the legislature, not this court, the sole authority to prescribe the powers, duties, and jurisdiction of district court.” Banowsky, slip op. at 19 (citations omitted). The Court found applying CRLJ 14A(b) comports with Washington’s Constitution because the Court has constitutional authority under article IV to promulgate procedural rules, such as CRLJ 14A(b). Id. Moreover, in RCW 2.04.190, .200, the legislature endorsed the Supreme Court’s “promulgation of rules regulating the practice and procedures of state courts, including district courts.” Id. at 21.
Thus, the legislature has spoken, and CRLJ 14A(b) exists against the backdrop of the legislature’s endorsement. It is a procedural rule that does not extend the district court’s subject matter jurisdiction, and its application does not offend article IV, section 10.
Banowsky, slip op. at 22.
The Court also rejected Backstrom’s argument that “applying CRLJ 14A(b) would undermine article IV’s division of authority between the superior courts and the district courts”:
CRLJ 14A(b) supports, not undermines, that constitutional scheme. When the district court applies CRLJ 14A(b), it in no way “hear[s] and determine[s]” the case. The district court makes no rulings; it merely transfers the case to the superior court. Transferring, rather than dismissing, recognizes the superior jurisdiction of the superior court and places the dispute before the correct tribunal.
Banowsky, slip op. at 23-24 (citations omitted).
The Banowsky decision provides clarifies the interplay between two seemingly conflicting CRLJs. Rather than punishing an unwitting plaintiff who in good faith “makes the mistake of filing her complaint on the floor of the courthouse where the district court clerk is located instead of the floor where the superior court clerk is located,” the Supreme Court’s decision promotes the Court’s interest in resolving disputes on the merits, rather than on a legal technicality.
The Supreme Court’s Banowsky v. Backstrom slip opinion, including Justice Gonzalez’s concurring opinion and Justice Yu’s dissent, can be found at the following URL: https://www.courts.wa.gov/opinions/pdf/962006.pdf.
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 Concurring in the result, Justice Gonzalez would have held “the $100,000 amount-in-controversy ceiling does not limit the district court’s subject matter jurisdiction because it merely concerns the amount of damages available.”