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International Longshore and Warehouse Union v. ICTSI Oregon, Inc.

United States Court of Appeals, Ninth Circuit

July 24, 2017

International Longshore and Warehouse Union; Pacific Maritime Association, Plaintiffs-Counter-Claim-Defendants-Appellees,
v.
ICTSI Oregon, Inc., an Oregon corporation, Defendant-Counter-Claimant-Plaintiff-Appellant.

          Argued and Submitted October 7, 2016 Portland, Oregon

         Appeal from the United States District Court for the District of Oregon Michael H. Simon, District Judge, PresidingD.C. No. 3:12-cv-01058-SI

          Thomas M. Triplett (argued), Michael T. Garone, and Kelly T. Hagan, Schwabe Williamson & Wyatt P.C., Portland, Oregon, for Defendant-Counter-Claimant-Plaintiff-Appellant.

          Ronald F. Wick (argued), Cozen O'Connor, Washington, D.C.; Eleanor J. Morton (argued) Emily M. Maglio, and Robert S. Remar, Leonard Carder LLP, San Francisco, California; for Plaintiffs-Counter-Claim Defendants-Appellees.

          Before: Diarmuid F. O'Scannlain, Richard R. Clifton, and Jacqueline H. Nguyen, Circuit Judges.

         SUMMARY [*]

         Antitrust

         The panel affirmed the district court's dismissal of an antitrust claim alleging anticompetitive activities engaged in jointly by a labor union and a multi-employer collective bargaining association.

         The panel held that the district court did not err in entering partial final judgment under Federal Rule of Civil Procedure 54(b) on an antitrust counterclaim in an action brought under § 301 of the Labor Management Relations Act. The panel affirmed the district court's conclusion that the antitrust issues were discrete and complex, and that the entry of partial final judgment would not result in duplicative proceedings.

         The panel held that the counterclaimant had standing to challenge an alleged antitrust conspiracy redounding to the benefit of the collective bargaining association even though it was a member of the association.

         The panel held that the Noerr-Pennington doctrine immunized the counterclaim defendants from antitrust liability for their conduct in filing lawsuits because they did not engage in sham litigation.

         The panel held that the remainder of the counterclaim defendants' alleged joint activity was immunized from antitrust liability under § 1 of the Sherman Act because of the nonstatutory labor exemption. The panel concluded that under the Mackey test, the alleged agreement restraining trade primarily affected the parties to the agreement and no one else; the agreement concerned wages, hours, or conditions of employment that were mandatory subjects of collective bargaining; and the agreement was produced from bona fide, arm's length collective bargaining. The panel held that an agreement that violates labor law does not always fail the second prong of the Mackey test.

         Judge Clifton concurred entirely in the result and reasoning of the disposition as to the merits of the appeal. He wrote separately to express concern over the district court's decision to enter partial final judgment under Rule 54(b), and agreed with the opinion's admonition that a preferable approach would have been for the district court to certify its order for interlocutory appeal.

          OPINION

          O'SCANNLAIN, Circuit Judge

         We must decide whether allegedly anticompetitive activities engaged in jointly by a labor union and a multi-employer collective bargaining association violate antitrust law.

         I

         A

         ICTSI Oregon, Inc. ("ICTSI"), a subsidiary of International Container Terminal Services, Inc., began operating a marine shipping facility ("Terminal 6") in 2011, leased from the Port of Portland. It employed longshoremen and mechanics, among others, represented by the International Longshore and Warehouse Union ("ILWU"), a labor union that represents many of the shore-based laborers of the maritime industry.

         ICTSI is a member of the Pacific Maritime Association ("PMA"), a multi-employer collective bargaining association representing many types of maritime employers who hire dockworkers and longshoremen. PMA represents ICTSI in collective bargaining negotiations with ILWU.

         ILWU and PMA are parties to a collective bargaining agreement known as the Pacific Coast Longshore and Clerks Agreement (the "CBA") covering the entire West Coast of the United States which governed the employment terms for all longshoremen employed by ICTSI during all times relevant to this appeal. The CBA is administered by the Joint

          Coast Labor Relations Committee ("Joint Committee"). The parties disagree over whether the Joint Committee, which meets regularly as the master labor-management committee under the CBA, has the authority to issue contractual interpretations that are binding on all signatories. ILWU and PMA agreed that, with some exceptions, all reefer work-the work of plugging, unplugging, and monitoring refrigerated shipping containers-would be performed by ILWU for all PMA members.

         ILWU sought to perform the reefer work at Terminal 6, but such work had historically been within the jurisdiction of the International Brotherhood of Electrical Workers ("IBEW"). The Joint Committee met on May 23, 2012, to resolve the disputed work assignment and determined that the work belonged to ILWU and then ordered ICTSI to assign the work accordingly. ICTSI argued, and still argues, that the reefer work at Terminal 6 was not its to assign under the terms of its lease with the Port of Portland. On June 4, 2012, an arbitrator, claiming authority under the CBA's grievance provisions, determined that ICTSI was in violation of the CBA and ordered it to give the reefer work at Terminal 6 to ILWU. The Joint Committee issued another decision a few days later, incorporating the arbitrator's decision and reiterating its previous command that ICTSI grant the disputed work to ILWU. ICTSI also alleges that PMA, with the encouragement of ILWU, threatened numerous daily fines of $50, 000 and even expulsion of ICTSI from the collective bargaining association to goad it into compliance with the Joint Committee decisions.

         Meanwhile, ICTSI commenced a § 10(k) proceeding under the National Labor Relations Act ("NLRA"), before the National Labor Relations Board ("NLRB"), to resolve the jurisdictional dispute between the rival unions. 29 U.S.C. § 160(k). The NLRB issued a decision on August 13, 2012, finding that ILWU workers were not entitled to the reefer work at Terminal 6, but rather that IBEW workers were. Int'l Bhd. of Elec. Workers, 358 N.L.R.B. 903, 907 (2012).[1]

         B

         1

         While the NLRB proceeding was pending, ILWU and PMA jointly filed this suit against ICTSI in federal district court under § 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, asking it to order ICTSI to comply with the recently issued Joint Committee decisions.

         ICTSI counterclaimed and alleged, among other things, that ILWU and PMA violated Sections 1 and 2 of the Sherman Act through their agreement to assign the disputed work to ILWU and their actions taken to enforce such agreement. 15 U.S.C. §§ 1-2. Specifically, ICTSI alleged that ILWU and PMA used the collective bargaining process to create a monopoly over longshoreman work on the West Coast: ILWU benefits because only its workers are able to perform longshoreman work for PMA-member employers, and PMA benefits because it collects fees for each hour worked by ILWU longshoremen.

         ICTSI further alleged in its counterclaim that in service of their agreement to monopolize West Coast port services, ILWU and PMA worked together to commit various illegal anticompetitive acts which reduced competition in the relevant market[2]-raising prices and injuring consumers. ICTSI claimed at least $4, 000, 000 in damages to itself as well.

         2

         The district court stayed most of the parties' claims pending resolution of various disputes filed before the NLRB. However, the district court allowed ILWU and PMA to file a joint motion to dismiss ICTSI's antitrust counterclaim and then granted it under Federal Rule of Civil Procedure 12(b)(6), concluding that a shared monopoly claim was not viable under Section 2 of the Sherman Act and that the alleged anticompetitive conduct was immunized from antitrust scrutiny because of a combination of the Noerr-Pennington doctrine, the statutory labor exemption, and the nonstatutory labor exemption.

         ICTSI moved for entry of a partial final judgment pursuant to Federal Rule of Civil Procedure 54(b), which the district court granted, dismissing ICTSI's antitrust counterclaim with prejudice. All other issues remain stayed in the district court pending the resolution of related NLRB proceedings.[3] This timely appeal followed.

         II

         A

         ILWU and PMA contend that the district court erred in entering a Rule 54(b) partial final judgment on the antitrust counterclaim. They assert that the facts and legal arguments of the antitrust counterclaim substantially overlap with other claims and counterclaims before the district court, and that the district court's grant of a partial final judgment will generate piecemeal appeals and waste judicial resources. See Romoland Sch. Dist. v. Inland Empire Energy Ctr., LLC, 548 F.3d 738, 747 (9th Cir. 2008). Accordingly, they argue that we should vacate the judgment. See Morrison-Knudsen Co. v. Archer, 655 F.2d 962, 966 (9th Cir. 1981) (concluding that if "[t]he claims disposed of by the Rule 54(b) judgment [are] inseverable, both legally and factually, from claims that remained unadjudicated in the district court, and there [are] no unusual and compelling circumstances that otherwise dictated entry of an early, separate judgment on that part of the case, " the partial final judgment should be vacated).

         We are satisfied that the district court did not err in concluding that ICTSI's antitrust counterclaim involved discrete legal issues separate from those involved in the § 301 litigation or the adjudications still proceeding before the NLRB. It is true that the factual issues involved in such claim are closely tied to the factual issues in the labor-law claims still pending before the district court, but the antitrust counterclaim involves distinct points of law. Also, the legal issues before us are complicated and not routine. See Wood v. GCC Bend, LLC, 422 F.3d 873, 882 (9th Cir. 2005) (observing that in cases where common factual issues abound, the entry of a Rule 54(b) partial final judgment should be reserved for complex and distinct legal issues). Finally, we agree with the district court's determination that entry of a partial final judgment would result in no duplicative proceedings, even if we reversed the dismissal of the antitrust counterclaim. Id. at 879.

         Whether the district court's decision to grant ICTSI's Rule 54(b) motion was correct is a close call. In circumstances such as these, we strongly prefer that the district court "certify its order for interlocutory appeal, " which allows "the Court of Appeals to protect its docket by determining for itself whether to accept the issue for review." Morrison-Knudsen Co., 655 F.2d at 966. However, because the issues before us are discrete and complex and we must give substantial deference to certain elements of the ...


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