# yHKEEv

' IN CLEma OFFICE X •umsEcoum;

enoEOF\Mik8HMsraN 

### M

CHIEFJUSTKE Thisopinion was filed for record atXa»von Susan L.Carlson Supreme CourtClerk


### IN THE SUPREME COURT OF THE STATE OF WASHINGTON

CERTIFICATION FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WASHINGTON IN

MONEY MAILER, LLC,

Plaintiff,

WADE G. BREWER, Defendant.

WADE G. BREWER,

Counterclaim Plaintiff, V. MONEY MAILER, LLC, and MONEY MAILER FRANCHISE CORP, a Delaware corporation. Counterclaim Defendants. No. 96304-5
En Banc Filed SEP 1 9Money Mailer, LLC v. Brewer(Wade G.), No. 96304-5 WIGGINS, J.—The United States District Court for the Western District of Washington asks us to answer two certified questions about the meaning of "fair and reasonable price" in ROW 19.100.180(2)(d), part of the Franchise Investment Protection Act(PIPA): 

### [(1)] For purposes of FIPA's prohibition on selling "to a franchisee any product or service for more than a fair and reasonable price" (ROW 19.100.180(2)(d)), may the franchisee rely on the price at which the franchisor is able to obtain the product or service in the absence of evidence indicating that the price was not a true market price? [(2)] Does a franchisor violate ROW 19.100.180(2)(d)as a matter of law when it charges the franchisee twice what it pays for a product or service? 

### OrderCertifying Questionsto the State Supreme Ct.MoneyMa/Ve/"Certification Order)

at 4-5.

### In answering these questions, we first define "fair and reasonable price" as a question of fact regarding what prudent franchisors and franchisees in similar circumstances would consider an appropriate price. In light of this definition, we 

### answer both questions in the negative. We hold that (1)the fair and reasonable price is not inherently established by the price at which the franchisor obtains the good and 

### (2)a franchisor does not violate the FlPA as a matter of law by selling a product or service to a franchisee for twice the price atwhich the franchisor obtained it.Money Mailer, LLC v. Brewer(Wade G.), No.96304-5

FACTSAND PROCEDURAL HISTORY 

### In 2011, Money Mailer^ and Wade Brewer entered a 10-year franchisor/franchisee relationship. Money Mailer, LLC v. Brewer,2018 WL 3156901, 

### at *2 (W.D.Wash.June 28, 2018)(Order Granting in Part Brewer's Mot.for Summ. J.). Money Mailer is an "envelope-based direct marketing company" whose franchisees sell local businesses advertisement space in Money Mailer's shared 

### envelopes,which are mailed to potential customers in the area.Appellants' Opening Br. on Certified Questions (Appellant's Br.) at 4-6. Money Mailer requires its franchisees to enter into contracts with Money Mailer for services related to "'printing 

### and inserting advertisements into shared mail envelopes.'" Money Mailer, 2018 WL 3156901, at *2. 

### In 2015, Money Mailer sued Brewer in federal district court, alleging breach of contract and nearly $2 million in damages. Brewer counterclaimed against Money 

### Mailer, arguing, among other things, that Money Mailer had violated the FlPA by 

### selling him "products and services . . . at more than a fair and reasonable price," contrary to ROW 19.100.180(2)(d). 

### Brewer moved for partial summaryjudgmenton the alleged FlPA violation.The district court found it undisputed that Money Mailer sold printed advertisements to 

### Brewer at twice the price at which Money Mailer obtained and/or produced them. ■' Brewer counterclaimed against both Money Mailer LLC and Money Mailer Franchise Corporation. Due to the "significant organizational overlap" between the companies, the district court treated them as one entity for purposes of the FiPA. Money Mailer, LLC v. Brewer, 2018 WL 3156901, at *2 (W.D. Wash. June 28, 2018) (Order Granting in Part Brewer's Mot. for Summ. J.). The two organizations did "not dispute that they operate as one for the purposes of FiPA." Id. We adopt the Money Mailer reference to both organizations herein.Money Mailer, LLC v. Brewer(Wade GJ,No.96304-5



### Money Mailer, 2018 WL 3156901, at *2. The court found that this markup violated RCW19.100.180(2)(d)asa matteroflaw and,on thisground,granted in partBrewer's summary judgment motion. Id. at *3-4. 

### In concluding that Money Mailer's behavior violated the FlPA,the district court relied on two conclusions regarding Washington law: First, the Court impliedly found that a franchisee may generally rely on 

### the price atwhich a franchisor purchased a particular good or service to show whatthe "fair and reasonable price"for that service is. Second,the Courtfound thatselling afranchisee a particulargood or servicefortwice what it costthefranchisor is nota "fairand reasonable price"and violates FlPA as a matter ofWashington law. 

### Money Mailer Certification Order at 4. After denying Money Mailer's motion for reconsideration and/or interlocutory review,the district court certified two questions to this court, asking us to clarify whether those two rules of law are correct. Id. at 4-6. The district court first asks: 

### For purposesofFIPA's prohibition on selling "to afranchisee any product or service for more than a fair and reasonable price" 

### (RCW 19.100.180(2)(d)), may the franchisee rely on the price at which the franchisor is able to obtain the product or service in the absence of evidence indicating thatthe price was not a true market price? 

### Id. at4. Recognizing thatWashington law differs from many states in the protection it allows to franchisees, the court "impliedly found that a franchisee may generally rely 

### on the price atwhich afranchisor purchased a particulargood or service to show what the 'fair and reasonable price'forthatservice is." Id. Putdifferently,this question asks. 

### Is the price at which the franchisor obtains the good or service inherently the fair and reasonable price? See Allen v. Dameron, 187 Wn.2d 692,701, 389 P.3d 487(2017)Money Mailer, LLC v. Brewer(Wade G.), No.96304-5



### ("We have the authority to reformulate certifiecl questions." (citing Danny v. Laidlaw Transit Servs., Inc., 165 Wn.2d 200,205, 193 P.Sd 128 (2008)(plurality opinion))). The district court next asks: Doesafranchisorviolate RCW 19.100.180(2)(d)as a matter oflaw when 

### It charges the franchisee twice what It paysfor a product or service? 

### MoneyMa/7erCertification Orderat4-5.This question Is drawn from the districtcourt's second finding that "selling a franchisee a particular good or service for twice what It cost the franchisor Is not a 'fair and reasonable price' and violates FlPA as a matter ofWashington law." Id. at 4. 

### Both questions are questions of law.The federal court has asked us to resolve only those questions of law. See id. at 4-6. We therefore resolve only whether the district court correctly Interpreted Washington law; we do not resolve whether 

### summary judgment was proper under the facts of this case. Resolving the questions In this manner,we answer no to both. STANDARD OF REVIEW We review certified questions from federal courts de novo. Broughton Lumber 

### Co. V. BNSF Ry. Co., 174 Wn.2d 619,624, 278 P.Sd 173 (2012)(citing Bradburn v. N. Cent. Reg'lLibraryDiet., 168Wn.2d 789,799,231 P.3d 166 (2010)). Legal Issues In certified questions are not considered In the abstract but are based on the record provided by the federal court. Id. (citing Bradburn, 168 Wn.2d at 799 (citing RCW 2.60.030(2))). We review questions ofstatutory Interpretation de novo. Dep'tof Ecology v. Campbell& Gwinn, LLC, 146 Wn.2d 1, 9,43P.3d 4(2002).Money Mailer, LLC v. Brewer(Wade G.), No.96304-5

ANALYSIS This case presents, at its core, a question of statutory interpretation: What is the meaning of "fair and reasonable price" in the FlPA? We first define "fair and reasonable price," and then we apply that definition to answer the certified questions. I. "Fair and reasonable price" is a question of fact regarding what prudent franchisors and franchisees in similar circumstances would regard as an appropriate price Both certified questions involve the meaning of RCW 19.100.180(2)(d). 

### Located in the portion of the FlPA governing the "[r]elation between franchisor and franchisee," section .180 reads:

(2)Forthe purposes ofthis chapterand without limiting its general application, it shall be an unfair or deceptive act or practice or an unfair method of competition and therefore unlawful and a violation of this chapter for any person to:
(d)Sell, rent, or offerto sell to a franchisee any product or service for more than a fair and reasonable price. RCW 19.100.180(2)(d). This section does not define "fair and reasonable price." Nor does the definitions section ofthe FlPA. RCW 19.100.010. Indeed,no portion ofTitle 19 RCW defines "fair and reasonable price," though the term recurs throughout. See, e.g., 

### RCW 19.120.080(2)(c). In Nelson v. National Fund Raising Consultants, Inc., we discussed "fair and reasonable price"—but offered no definition of the phrase. 120 Wn.2d 382, 842 P.2d 473 (1992). Lacking an explicit statutory or case law definition,
we turn to the principles of statutory interpretation for guidance.MoneyMailer, LLC v. Brewer(Wade G.), No.96304-5

The goal ofstatutory interpretation is ascertaining and carrying outthe intentof the legislature. Campbell & Gwinn, 146 Wn.2d at 9-10. We first look to the plain meaning ofthe statutory language.Id. at 10.Plain meaning comesfrom the statutory text itself as well as related statutes. Id. at 11-12. We employ legislative history to clarify any ambiguity ofthe plain meaning ofthe language.Id. at 12. Here,both the plain language and the legislative history supportthe conclusion that"fair and reasonable price"isa question offactregarding whatprudentfranchisors and franchisees in similar circumstances would regard as an appropriate price. The circumstances relate to market forces. A. Plain language The plain language of the statute indicates,first and foremost, that whether a price is "fair and reasonable" is a question of fact. The legislature chose, in crafting the FIFA,to use the word "reasonable." The word "reasonable" has a long history in
ourjurisprudence,consistently invoking questions offact. See,e.g., Wuthrich v. King County, 185 Wn.2d 19, 27, 366 P.3d 926 (2016) ("Whether the roadway was reasonably safe and whether it was reasonable for the County to take (or not take) any corrective actions are questions of fact . . . ."); Bodin v. City of Stanwood, 130 Wn.2d 726, 735-36, 927 P.2d 240 (1996)(citing Gordon v. DeerPark Sch. Dist. No. 414, 71 Wn.2d 119, 122, 426 P.2d 824 (1967)("Whether one who is charged with negligence has exercised reasonable care is a question offactfor the jury.")); Wood V. City ofSeattle, 57 Wn.2d 469,471-72, 358 P.2d 140 (1960)("Whether a person's conduct has met the reasonably prudent man test is a question of fact for determination by the jury . . . ."(citing Westv. Mount Vernon Sand & Gravel, Inc.,56MoneyMailer, LLC v. Brewer(Wade G.), No.96304-5



### Wn.2d 752, 355 P.2d 795 (1960))). Therefore, by using the word "reasonable" here, 

### the legislature intended that whether a price is "fair and reasonable" is a question of
fact. Theterm "fairand reasonable"also indicatesthatsubsection .180(2)(d)invokes 

### a question offact.Federalcourts,aswell asthe courtsofotherstates,have repeatedly made clearthatdeterminations ofwhat is "fair and reasonable"are questions offact.^ Indeed, treating questions of what is "fair and reasonable" as questions offact goes back centuries.^ While our courts have not explicitly held that "fair and reasonable" 

### invokes a question of fact, the legislature's use of the term supports the conclusion that whether a price is "fair and reasonable" is a question offact. The use of "reasonable" has a further implication: it indicates that a fact finder 

### must adopt the perspective of a prudent person under the circumstances when determining whether a price is "fair and reasonable." At common law, we have long employed the word "reasonable" in the phrase "reasonable care," which means the care that "a reasonably prudent person would have exercised under the same or

^ E.g., Minn. Lawyers Mut. ins. Co. v. Comm'r, 285 F.3d 1086, 1092 (8th Cir. 2002) ("The determination of a fair and reasonable estimate of a taxpayer's unpaid losses is essentially a valuation issue and a question offact.'" (quoting Hanover ins. Co. v. Comm'r, 598 P.2d 1211, 1220(1st Cir. 1979)));Porterv. Toledo WimsettFin. & Thrift Co., 13Ohio L.Abs.509,510(Ohio Ct. App. 1933) ("[T]he test to be applied to a sale of this character is whether the sale was fair and reasonable and the price what could be reasonably expected. This was a question offact to be determined by a jury."(citation omitted)). ^ E.g., Huffv. Wolfe,48 111. App. 589, 591-92 (1893)("Whether the amount agreed upon by the parties in this case asthe proper'fees and compensation'oftheguardian wasfairand reasonable, was practically the sole contention presented to the jury. It was a question of fact."); Kent v. Pheips, 2 Day 483, 483 (Conn. 1807) ("[Wjhether such charge was fair and reasonable is a question offactto be left to the jury.").Money Mailer, LLC v. Brewer(Wade G.), No.96304-5

similar circumstances." Chadwickv.Ek, 1 Wn.2d 117, 129,95 P.2d 398 (1939)(citing ScottV. Pac.Power& Light Co., 178Wash.647,35 P.2d 749(1934);N. CoastPower Co. V. Cowlitz, Chehalis & Cascade Ry. , 108 Wash. 591, 185 P. 615 (1919)). 

### Therefore,a price is fair and reasonable when it accords with a price acceptable to a prudent person in similar circumstances. But here,whatare these similar circumstances? Plainly,the sale ofproducts or services to a franchisee within a franchise relationship is such a circumstance. See RCW 19.100.180(2)(d). We must therefore ask what a prudent franchisor and franchisee would look to in the course of such a sale and whatthey would consider to determine whether a sale is fair and reasonable. The term expresses what prudent parties would look to In considering the fairness and reasonableness of a sale: the current market. Definitions ofterms similar to "fair and reasonable price" show the importance of taking the current market into account. The revised fourth edition of Black's Law Dictionary, which was current at 

### the time the FlPA was passed,defines "fair and reasonable value" as "the best price obtainable at a voluntary sale." Black's Law Dictionary 714 (rev. 4th ed. 1968). 

### Black'ssimilarly defines "fair marketvalue"as the "[p]rice atwhich a willing seller and willing buyer will trade." id. at 716. In its 11th edition, Biack's equates "value" to "price." Black's Law Dictionary 

### 1864 (11th ed. 2019) (defining "value" as "[t]he monetary worth or price of something"). It defines "fair value" as "[a]n estimate of a good, service, or asset's potential price, based on a rational and unbiased assessment ofthe amountatwhich it could currently be bought and sold between willing parties." id. at 1865. The 11thMoney Mailer, LLC v. Brewer(Wade G.), No.96304-5



### edition also states that "fair marketvalue"is equivalentto "fair and reasonable value," and defines both as "[t]he price that a seller is willing to accept and a buyer is willing 

### to pay on theopen marketand in an arm's-length transaction;the pointatwhich supply and demand intersect." Id.These definitions demonstrate the importance oftaking the market into account. B. Legislative History 

### The legislative history ofthe FlPA resolves whatever ambiguity remains in the 

### language ofsubsection .180(2)(d). See Campbell& Gwinn, 146 Wn.2d at 12(we turn to legislative history to resolve ambiguity in the plain language of statutes). The legislative history ofsubsection .180(2)(d)confirmsthe importance ofthe marketplace in resolving whether a price is fair and reasonable.The legislature explained that 

### [r]equiring fair and reasonable prices on all charges will give the franchisors flexibility necessary for price [fluctuations] but deny to them the current power of unilateral price changes.Such power is particularly vicious when combined with any variation of the exclusive supply contract. 

### Comments on the Proposed Investment Franchise Act, S.B. 755,42d Leg., 1st Ex. 

### Sess.(Wash. 1971)on file with Wash.State Archives. In other words,the legislature intended for the prices to vary based on "fluctuations," presumably those of the market,and did not intend to give franchisors free reign to set any price they choose. 

### Comments by a draftsperson of the FlPA also support this conclusion. 

### Discussing the change in an early draft of the FlPA from "except af a fair and reasonable price to "more than a" fair and reasonable price (emphasis added), a draftsperson explained thatthe new language

10MoneyMailer, LLC v. Brewer(Wade G.), No.96304-5



### more clearly reflected our Intent of allowing the industry to determine through the supply and demand mechanisms a reasonable price and then prohibiting the sale of products or services for more than that price 

### by the franchisor to the franchisee rather than to prescribe a price at which the franchisor can sell products or services to the franchisee. James Fletcher, Franchise Investment Protection Act 37 (1971) (unpub. research 

### paper, Univ. of Wash. Sch. of Law)(on file with the Wash. State Law Library)Thus the marketprice ("supply and demand mechanisms")is to be taken into consideration. But no particular price is mandated. C. Determining a "fairand reasonabie price" The plain language and the legislative history of the FlPA make clear that a broad understanding of the market and market forces must inform a fact finder determining whether prices arefair and reasonable underthe FlPA.A factfinder must take into consideration marketforces writ broadly.This includes whatthe district court relied on—the price at which the franchisor acquired the products or services—but reaches beyond. The prices of competitor franchisors should be taken into account, 

### including whether the prices of all franchisors are the same. So, too, should the 

### statements of profit margin made by the franchisor."^ Other relevantfactors include the franchisor's charges to other franchisees for the same or similar products or services; what other similarly situated franchisors 

### charge similarly situated franchisees for the same or similar products or services; business and industry practices; the price the franchisor pays for the products or services; and the price at which the franchisee could obtain the same or equivalent

Of course, this is information that will likely be in the possession of the franchisor, not the franchisee, but it might be available to the franchisee in the normal course ofdiscovery.

11Money Mailer, LLC v. Brewer(Wade G.), No.96304-5



### productsorserviceselsewhere,including in an arnn's-length deal on the open market. There are other, less tangible market forces at work as well. For Instance, the fact finder should consider the value that the franchisor adds to the product or service, If
any. Other marketforces can apply; this list Is not exhaustive. Nor Is It exclusive or 

### mandatory: not every,factor need be referenced or used. These factors allow the finder of fact to take complex scenarios Into account. 

### For example. If the franchisor obtains a productfor price x, and the franchisee could only obtain It on the open marketfor 5x,then selling It atthe price of 2x might not be unfair or unreasonable—but If all other similarly situated franchisors are selling It for 1.5x,then the price of 2x may be unfair or unreasonable. 

### Money Mailer hasa differentview ofthe meaning of"fairand reasonable price," 

### arguing that a "fair and reasonable price" Is determined solely by the market price of the product or service at a comparable level of distribution. Appellant's Br. at 22-23. Under this proposed definition, a price Is fair and reasonable If It Is at or below the price atwhich the franchisee could otherwise obtain the goods. Id. at 31. Money Mailer makes no textual argument supporting Its definition of "fair and reasonable price."® It Instead provides us with ample reason to reject Its rule. Money

® in its briefing before this court. Money Mailer argued that this definition came from the meaning of"bonafide wholesale price,"found in subsection .010(8)ofthe FlPA—aterm that. Money Mailer argued,is equivalent to "fair and reasonable price."Appellant's Br. at 17-19;Appellant's Answer to Amicus at 16.These arguments were misguided as the statute provides no reason to connect the terms. In any event, at oral argument. Money Mailer expressly disclaimed any link between "fair and reasonable price" and "bonafide wholesale price."Wash.Supreme Courtoral argument, Money Mailer, LLC v. Brewer, No. 96304-5 (Mar. 19, 2019), at 1 min., 16 sec. (noting its

12Money Mailer, LLC v. Brewer(Wade G.), No.96304-5



### Mailer argues at length that per se rules are inappropriate in this context, noting that per se rules '"almost always tend to restrict competition and decrease output.'" Id. at 38(quoting Leegin Creative LeatherProds.Inc. v. PSKS,Inc.,551 U.S.877,886,127 S. Ct. 2705, 168 L. Ed. 2d 623 (2007)). Yet Money Mailer offers a per se rule of its own: under Money Mailer's definition, any price at or below the price available to the franchisee on the open market is fair and reasonable per se. The concerns Money 

### Mailer cites against applying per se rules in this situation—for instance,that a "per se rule is appropriate only after the courts have weighed all of the circumstances and amassed considerable experience with [the issue]"—militate against Money Mailer's rule, as well. Id. at 39.Adopting Money Mailer's definition would "not be based on any 

### history or experience, but instead on an arbitrary assumption": the assumption that nothing matters butthe price atwhich the franchisee could itselfobtain the product or service. Id. Weagree with Money Mailer and decline to "replace[ ] [a]factual and reasoned inquiry with [a]simplistic formula[ ]." Id. While the price at which a franchisee could otherwise obtain the goods is certainly a factor in whether a price is fair and reasonable, it alone does not resolve whether a price is "fair and reasonable." The FlPA requires consideration of otherfacts, as the discussion above makes clear. Brewer also argues for a rule that lacks support from the case law. Brewer states thatwe "need only determine whata 'fair and reasonable price'is not."Resp't's

argument is "separate from" any connection between "fair and reasonable price" and "bona fide wholesale price"), video recording by TVW, Washington State's Public Affairs Network, http://www.tvw.org. We therefore do not consider what "bona fide wholesale price" means.

13Money Mailer, LLC v. Brewer(Wade G.), No.96304-5



### Br. at 13. In that vein, Brewer argues that "any markup ofgoods or services"violates the "fair and reasonable price" provision of subsection .180(2)(d). Id. at 14. 

### Brewer's rule would mean that the price paid by the franchisor—and every advantage the franchisor had in getting such a price—must be passed on to the 

### franchisee. Wash.Supreme Court oral argument, Money Mailer, LLC v. Brewer, No. 

### 96304-5 (Mar. 19, 2019), at 35 min., 45 sec., video recording by TVW,Washington State's PublicAffairs Network, http://www.tvw.ora. We need not delve into the details 

### of economics to observe the problems with such a rule. First, from a plain language and legislative history standpoint, there is no reason to think the legislature Intended "fair and reasonable price" to mean "the price at which the franchisor obtained the 

### goods." Had the legislature meant for Brewer's interpretation to be the rule, it would have said so. Second, prices are raised between differing levels of distribution frequently: for Instance, a wholesaler charges a retailer a higher price than the wholesaler paid the supplier for the goods.True,a franchisor-franchisee relationship is not identical to a wholesaler-retailer relationship; it is for such reasons that our 

### legislature enacted the FIPA. But the existence of the FlPA does not inherently prevent franchisors from increasing prices of the products and services they sell to their franchisees. Brewer disagrees, relying solely on Nelson to support his definition of"fair and reasonable price." Resp't's Br. at 14. Contrary to Brewer, Nelson does not stand for the proposition that any markup is impermissible. In Nelson, the franchisee ordered the supplies locally. 120Wn.2d at 385.The supplierthen sentthe bill to thefranchisor, who marked up the price by about 20 percent and sent that marked-up bill to the

14Money Mailer, LLC v. Brewer(Wade G.), No.96304-5

franchisee. Id. The trial court found that this act violated RCW 19.100.180(2)(d)and 

### granted injunctive relief to the franchisee. Nelson v. Nat'l Fund Raising Consultants, Inc., 64 Wn.App. 184, 191, 823 P.2d 1165 (1992), rev'd in part and aff'd in relevant 

### part, 120Wn.2d 382.The CourtofAppeals,reviewing forabuse ofdiscretion,affirmed the trial court's injunction. Id. at 188, 194. It issued no broad holding regarding the impermissibility of markups. Id. at 193. 

### Similarly, we did not announce a broad rule that any markup of prices is impermissible in our own review of Nelson. See 120 Wn.2d at 392. Rather, we affirmed the Court of Appeals only with respect to FIFA, reasoning that none of the 

### arguments made by the franchisor about the meaning of the FIFA were persuasive. Id. Nelson did not announce or indicate the existence of a general rule prohibiting all 

### price markups. See id. at 388. Brewer cannot read into Nelson things we did not say. Brewer also claims that "[tjhis case is Nelson redux," arguing we must reach the same result because the facts of the cases are the same. Resp't's Br. at 14. But this case is not "Nelson redux." As noted above, the Nelson franchisee ordered the 

### supplies locally,and thefranchisor,having received the bill,then marked upthe prices and sent that marked-up bill to the franchisee. 120 Wn.2d at 385. Unlike Nelson, 

### Money Mailer paid forthe goods directly, or produced them itself, and then sold them at an increased price to Brewer. Money Mailer, 2018 WL 3156901, at *1-2. Money Mailer did not mark up the prices of goods that the franchisee had itself ordered, as occurred in Nelson. See id.] see also Appellant's Answer to Amicus at 15 (correctly 

### making the same argument). In Nelson, it appears that no value was added to the product or service; the markup was a pure increase in price of a good that the

15Money Mailer, LLC v. Brewer(Wade G.), No.96304-5



### franchisee apparently could have obtained on its own, outside of the franchise relationship. See 120 Wn.2d at 385.® Here, there might very well have been such value added that, alongside other factors, justified the markup. We therefore cannot

see this case as "Nelson redux." 

### In any event,due to the procedural posture ofthis case,it is for the factfinder, notthis court,to determine whetherthe markup here wasfair and reasonable.We are 

### nottasked with resolving whethersummaryjudgmentwas proper,onlywith answering the certified questions presented by the district court—to which we now turn. II. We answer no to each certified question We now answer the certified questions. We bear in mind our definition of "fair 

### and reasonable price," which, restated, is a question offact regarding what prudent franchisors and franchisees in similar circumstances would regard as an appropriate 

### price, paying particular attention to marketforces.The answer to both is no. A. A franchisee maynotrely solely on the price at which the franchisor obtains a 

### productorservice to establish the "fairand reasonable price" The district court has asked, "For purposes of FIPA's prohibition on selling 'to 

### a franchisee any product or service for more than a fair or reasonable price' (RCW 19.100.180(2)(d)), may the franchisee rely on the price atwhich the franchisor is able to obtain the product or service in the absence of evidence indicating that the price was nota true market price?" MoneyMa/VerCertification Order at4.We surmise that the court asked this question because it had "impliedly found that a franchisee

® We caution,however,that Nelson Is notexplicitaboutthis. SeeNelson,120Wn.2d at 385.There may have been other reasons the trial courtfound the markup unfair or unreasonable. See id.

16Money Mailer, LLC v. Brewer(Wade G.), No.96304-5



### may generally rely on the price at which a franchisor purchased a particular good or service to show whatthe 'fair and reasonable price'for that service is." Id. The district 

### court had concluded that "[ajbsent some evidence of a special discount or other indication that the price Money [Mailer] paid was not a market price, the fair and reasonable costs ofthe services were established by what Money Mailer was actually 

### paying for the printing services." Id. at 2. In other words,the district court concluded thatthe fair and reasonable price ofa good or service under .180(2)(d)is established 

### bythe price thefranchisor paysforthatgood.Thisquestion therefore essentially asks, Is the "fair and reasonable price" inherently the price at which the franchisor obtains the good? Or, put differently. Is the franchisee entitled to get the good at the same price the franchisor paid for it? See Allen, 187Wn.2d at 701. The answer to this question, under the definition of "fair and reasonable price," is no. True, a franchisee is free to present whatever evidence it wants and shape its 

### argumentin whatever manner it prefers. It maytherefore rely on the price atwhich the franchisor obtained the good. But a price is not fair and reasonable under .180(2)(d) 

### merely because it is the price the franchisor pays. As the definition of "fair and reasonable price" makes clear, determining whether a price is "fair and reasonable" takes more into account. The price at which the franchisor obtains a good or service is notinherently the fair and reasonable price.

'' We could interpret question 1 differently and view it as asking whether, in the absence of other competent,admissible evidence,the difference between the prices paid and charged is sufficient to create a question of material fact that would allow the franchisee to overcome summary judgment. If so, the answer is yes. However, we understand question 1 as asking whether the price at which the franchisor obtains the good alone establishes the fair and reasonable price, in

17Money Mailer, LLC v. Brewer(Wade G.), No.96304-5

Brewer,even as he arguesthatthe answerto this question is yes,nearly admits 

### that the price at which the franchisor obtains the goods does notinherently establish thefairand reasonable price. In oral argument,he noted that"ifthere is otherevidence 

### [beyond the price atwhich the franchisor obtained the goods],that can be considered too"—implying that no such other evidence existed here. Wash. Supreme Court oral 

### argument,supra,at 26 min.,45 sec.to 26 min., 54sec. Butthere was other evidence here,which the district court concluded was immaterial. See Money Mailer, 2018 WL 3156901, at *3. Indeed, according to the district court. Money Mailer, as part of its motion for reconsideration, had proffered evidence purporting to show that "Brewer would likely be unable to obtain printing services on the open market for less than 

### what Money Mailer was charging him." Money Mailer Certification Order at 2. The district court concluded that such evidence had no bearing on whether Money Mailer had violated the FIPA. Id. But as discussed above, such evidence is central to the 

### question ofwhether a price is "fair and reasonable." Furthermore, Brewer is wrong is to assert,without other evidence,thatthe price paid by the franchisor must be thefair 

### and reasonable price. See Wash. Supreme Court oral argument, supra, at 26 min., 45 sec. to 26 min., 54 sec.The FIPA does not supportthat interpretation. B. A franchisor does not violate subsection .180(2)(d)as a matter oflaw merely 

### bycharging afranchisee twice whatthefranchisorpaysforaproductorservice The district court has also asked, "Does a franchisor violate RCW 

### 19.100.180(2)(d)as a matter of law when it charges the franchisee twice what it pays

and of itself. The answer to that is no, for much the same reason: whether a price is fair and reasonable is a question offact.

18Money Mailer, LLC v. Brewer(Wade G.), No.96304-5



### for a product or service?" Money Mailer Certification Order at 4-5. Considering our definition of "fair and reasonable price," the answer to this question must also be no. No such per se rule exists because what is "fair and reasonable" is a question offact. Thus there may be situations in which a franchisor may charge a franchisee twice what it paid to acquire a good or service but nevertheless still be charging a fair and reasonable price.A per se rule does not reflect our law. Brewer disagrees. But Brewer's only argument is that Nelson stands for the existence ofthis per se rule.As discussed above,Nelson created no such rule. Atseveral points. Brewer also insists thatthe district court's question 2asks us to decide whether Money Mailer's price was "fair and reasonable,"as a matter of law, under the facts of this case—not whether a price is per se unfair or unreasonable when a franchisor charges the franchisee twice what it pays for a product or service. 

### E.g., Resp't's Br. at 21. Indeed, at oral argument, when explicitly asked whether Brewer considered this question factual or legal. Brewer answered that it wasfactual. 

### Wash. Supreme Court oral argument, supra, at 27 min., 13 sec. to 27 min., 55 sec. This is incorrect. The district court clearly concluded that as a matter of law, any 100 

### percent markup violated subsection .180(2)(d). Money Ma/VerCertification Order at4. When the districtcourtasked question 2,itasked whetherthatconclusion wascorrect: that is, whether the district court correctly articulated the law of our state. Nothing in the district court's certification order indicates the court was asking us whether Money Mailer's markup itself violated the FlPA as a matter of law. 

### Similarly, Brewer accuses Money Mailer of having concealed its price markups 

### by notdisclosing whatit paidforthegoods,which plays intowhy Money Mailer'sprices

19Money Mailer, LLC v. Brewer(Wade G.), No.96304-5



### were allegedly unfair and unreasonable. Resp't's Br. at 8, 25;Wash.Supreme Court oral argument,supra, at 19 min., 17 sec. ("What's at stake is really how transparent do franchisors have to be? The issue is really can [Money Mailer] maintain these 

### hidden profit centers . . . ."). It is true that we held in Nelson that disclosure of prices does not prevent a price from being unfair or unreasonable under subsection .180(2)(d). Nelson,120Wn.2d at 389. Butdisclosure of"profit centers"is neither here nor there for the purposes of answering question 2. We are asked whether ICQ 

### percent markups are impermissible as a matter of law with respect to subsection .180(2)(d). MoneyMa/VerCertification Orderat4-5.The answerto question 2remains no, irrespective ofdisclosure. In answering question 2 in the negative,we do not hold that whether a price is "fair and reasonable"can never be resolved as a question oflaw."'[W]hen reasonable minds could reach but one conclusion, questions of fact may be determined as a 

### matter of law.'" Harvey v. County of Snohomish, 157 Wn.2d 33, 43, 134 P.3d 216 (2006)(quoting Hartleyv. State,103Wn.2d 768,775,698 P.2d 77(1985)).But,again,
we are nottasked with resolving whether reasonable minds could differ as to whether 

### Money Mailer's markups were unfair or unreasonable. We are asked to decide only whether 100 percent markups are always unfair or unreasonable.The answerto that question is no. III. The parties'remaining arguments are meritless 

### Money Mailer argues that subsection .180(2)(d)does not apply because here 

### the prices ofgoodswere allegedly agreed to atthe start ofthe franchise relationship, not during it. Appellant's Answer to Amicus at 9. We decline to reach this issue as it

20Money Mailer, LLC v. Brewer(Wade G.), No.96304-5



### lies beyond the scope ofthe certified questions.Weare asked only aboutthe meaning of "fair and reasonable price," not whether .180(2)(d)applies to the factual scenario
before us. 

### Additionally, Brewer has requested sanctions against Money Mailer, and Money Mailer has requested we strike portions of Brewer's opening brief. Resp't's Br. 

### at 27;Appellant's Reply Br. at 17. We deny both motions. Both were made in briefs, and granting either (or both)would not preclude our reaching the merits of the case. RAP 17.4(d) (requiring motions made in briefs be those which, if granted, would 

### prevent our reaching the merits). Equally to the point, both motions lack merit. CONCLUSION We hold that a "fair and reasonable price" in ROW 19.100.180(2)(d) is a 

### question of fact involving what prudent franchisors and franchisees in similar circumstances would regard as an appropriate price. The circumstances must take into accountthe forces ofthe market,as described above.We thus answer no to both 

### of the certified questions. This opinion answers only questions of law, not fact. Whether Money Mailer violated the FlPA remains a question offactto be determined by the district court.

21Money Mailer, LLC v. Brewer(Wade G.), No.96304-5

WE CONCUR.

pl: 

# "yTZa-ck-i^,

/ r



# /

:22