Court Opinion

ID: 4710767
Source: CourtListenerOpinion
Date Created: 2021-08-12 00:01:30.143518+00
Date Added: 2024-06-11T08:07:05.109632
License: Public Domain

Gordon McCloud, J.
¶38 (concurring) — I fully agree with the majority’s well-reasoned analysis and conclusions about jurisdiction and choice of law. I write separately only to comment on how broadly that opinion construes the word “sellfer]” in RCW 21.20.430(1) — so broadly that it includes the nonseller accounting firm Ernst & Young.
¶39 The majority is correct that in 1987, this court imported into Washington’s securities law the majority rule in the federal circuits for interpreting the word “sellfer]” under federal securities law; we held that “sell[er]” must be construed broadly to include those whose actions were a “substantial contributive factor” in the sale. Haberman v. Wash. Pub. Power Supply Sys., 109 Wn.2d 107, 130-31, 744 P.2d 1032, 750 P.2d 254 (1987). But one year after Haberman, the United States Supreme Court decided Pinter v. Dahl, 486 U.S. 622, 653-54, 108 S. Ct. 2063, 100 L. Ed. 2d 658 (1988). Pinter construed the word “sell[er]” in the related federal securities law, and it expressly rejected the broad interpretation that most circuit courts had adopted under federal law and that we had adopted under state law.
¶40 Predictably, in 1989, we considered a post -Pinter challenge to the Haberman court’s interpretation of our state’s securities law. In Hoffer v. State, 113 Wn.2d 148, 152, 776 P.2d 963 (1989), we rejected the argument that the *974Supreme Court’s analysis was more persuasive than our own and adhered to the “substantial contributive factor” interpretation of “sell[er]” as adopted in Haberman. The dissent in Hoffer, by contrast, asserted that “RCW 21.20-.430(1), by its plain language, requires privity of the seller and the person buying the security.” Id. at 153 (Pearson, J., dissenting). It also noted that “[t]he underpinnings of Haberman came from lower federal court decisions which are no longer authoritative in light of the Pinter ruling.” Id.
¶41 The Hoffer dissent made good sense at the time it was written. The very federal cases on which the Haberman decision relied were expressly disapproved by Pinter. In fact, that dissent makes even more sense now, 27 years, later, as even more circuits that the Haberman majority relied on have repudiated their earlier adoption of the nontextual “substantial contributive factor” test. For example, the Haberman majority explicitly relied on a Ninth Circuit case in adopting our test. Haberman, 109 Wn.2d at 127 (citing Anderson v. Aurotek, 774 F.2d 927, 930 (9th Cir. 1985) (per curiam)). In 2007, that case was repudiated by the Ninth Circuit in light of Pinter. Sec. & Exch. Comm’n v. Phan, 500 F.3d 895, 906 n.13 (9th Cir. 2007).
¶42 Nevertheless, the majority is absolutely correct that Haberman is controlling, not the Hoffer dissent. I therefore concur in the majority’s decision. In light of Haberman and Hoffer, FutureSelect has sufficiently alleged that Ernst & Young was a “sell[er]” to avoid dismissal on the pleadings.