International Longshore and Warehouse Union (ILWU) et al v. ICTSI Oregon, Inc.

Filing 177

Opinion and Order - PMA's motion to dismiss ICTSI's antitrust and breach of fiduciary duty counterclaims 131 , joined in part by ILWU 133 , is granted in part and denied in part. ICTSI's antitrust counterclaim against both PM A and ILWU is dismissed. ICTSI's counterclaim against PMA for breach of fiduciary duty is not dismissed, but that counterclaim is stayed. PMA and ILWU's motions to dismiss the Port's counterclaim for tortious interference (ECF 138 and 146 ) are granted, and the Port's tortious interference counterclaim is dismissed. Signed on 3/24/14 by Judge Michael H. Simon. (mja).

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

INTERNATIONAL LONGSHORE
AND WAREHOUSE UNION and
PACIFIC MARITIME ASSOCIATION,

Case No. 3:12-cv-01058-SI

OPINION AND ORDER
Plaintiffs,
v.
ICTSI OREGON, INC.,
Defendant,
and
PORT OF PORTLAND and IBEW
LOCAL 48,
Intervenor-Defendants.

ICTSI OREGON, INC.,
Counterclaim-Plaintiff,
v.
INTERNATIONAL LONGSHORE
AND WAREHOUSE UNION;
PACIFIC MARITIME ASSOCIATION;
INTERNATIONAL LONGSHORE
AND WAREHOUSE UNION Local 8; and
INTERNATIONAL LONGSHORE
AND WAREHOUSE UNION Local 40,
Counterclaim-Defendants.
PAGE 1 – OPINION AND ORDER

PORT OF PORTLAND,
Counterclaim-Plaintiff and
Crossclaim-Plaintiff,
v.
PACIFIC MARITIME ASSOCIATION;
INTERNATIONAL LONGSHORE
AND WAREHOUSE UNION; and
INTERNATIONAL LONGSHORE AND
WAREHOUSE UNION LOCAL 8,
Counterclaim-Defendants,
and
ICTSI OREGON, INC.,
Crossclaim-Defendant.
Jeffrey P. Chicoine, Miller Nash LLP, 3400 U.S. Bancorp Tower, 111 S.W. Fifth Avenue,
Portland, Oregon 97204; Clifford D. Sethness and Jason M. Steele, Morgan, Lewis & Bockius
LLP, 300 South Grand Avenue, 2nd Floor, Los Angeles, California 90071. Of Attorneys for
Pacific Maritime Association.
Robert S. Remar, Eleanor I. Morton, Emily Maglio, Amy Endo, and Philip C. Monrad, Leonard
Carder, LLP, 1188 Franklin Street, Suite 201, San Francisco, California 94109; Robert H. Lavitt,
Schwerin, Campbell, Barnard, Iglitzin & Lavitt LLP, 18 West Mercer Street, Suite 400, Seattle,
Washington 98119. Of Attorneys for International Longshore and Warehouse Union and
International Longshore and Warehouse Union Locals 8 and 40.
Michael T. Garone, Thomas M. Triplett, Román D. Hernández, and Amanda T. Gamblin,
Schwabe, Williamson & Wyatt, PC, 1900 Pacwest Center, 1211 S.W. Fifth Avenue, Portland,
Oregon 97204. Of Attorneys for ICTSI Oregon, Inc.
Randolph C. Foster, Jeremy D. Sacks, Nathan C. Brunette, and Kathy Ann Peck, Stoel Rives
LLP, 900 S.W. Fifth Avenue, Suite 2600, Portland, Oregon 97204; Kathy Ann Peck, Williams,
Zografos & Peck PC, 334 3rd Street, Lake Oswego, Oregon 97034. Of Attorneys for the Port of
Portland.
Norman D. Malbin, 15937 N.E. Airport Way, Portland, OR 97230. Of Attorneys for
IBEW Local 48.
PAGE 2 – OPINION AND ORDER

Michael H. Simon, District Judge.
This matter is one of six separate but related lawsuits arising from a labor dispute at
Terminal 6 at the Port of Portland.1 The dispute arose over who is entitled to perform the work of
plugging in, unplugging, and monitoring refrigerated shipping containers (the “reefer work”) at
Terminal 6. Plaintiffs International Longshore and Warehouse Union (“ILWU”) and the Pacific
Maritime Association (“PMA”) contend that Defendant ICTSI Oregon, Inc. (“ICTSI”), the
operator of Terminal 6 and a member of PMA, must assign the reefer work to ILWU members.
ICTSI, and Intervenor-Defendants the Port of Portland (the “Port”) and the International
Brotherhood of Electrical Workers (“IBEW”) Local 48, contend that the reefer work must be
assigned to IBEW members.
As part of this lawsuit, Defendant ICTSI asserts several counterclaims, including a
counterclaim against both PMA and ILWU under the federal antitrust laws and a counterclaim
against PMA for breach of fiduciary duty (ECF 109). PMA has moved to dismiss ICTSI’s
antitrust counterclaim (ECF 131), and ILWU has joined that motion (ECF 133). PMA has also
moved to dismiss ICTSI’s counterclaim against PMA for breach of fiduciary duty (ECF 131). In
addition, Defendant-Intervenor, the Port, asserts several counterclaims, including a counterclaim
against both PMA and ILWU for tortious interference (ECF 136). Both PMA and ILWU have
moved to dismiss the Port’s tortious interference counterclaim (ECF 138 and 146, respectively).
For the reasons that follow, PMA and ILWU’s motions are granted in part and denied in part.
1

The other five cases are Pac. Mar. Ass’n v. Int’l Longshore & Warehouse Union Local
8, Case No. 3:12-cv-01100-SI (D. Or.); Int’l Longshore & Warehouse Union v. Port of Portland,
Case No. 3:12-cv-01494-SI (D. Or.); Hooks v. Int’l Longshore & Warehouse Union, Case No.
3:12-cv-1088-SI (D. Or.); Hooks v. Int’l Longshore &Warehouse Union, Case No.
3:12-cv-01691-SI (D. Or.); and Pac. Mar. Ass’n v. N.L.R.B., Case No. 3:12-cv-02179-MO
(D. Or.).

PAGE 3 – OPINION AND ORDER

STANDARDS
A motion to dismiss for failure to state a claim may be granted only when there is no
cognizable legal theory to support the claim or when the complaint lacks sufficient factual
allegations to state a facially plausible claim for relief. Shroyer v. New Cingular Wireless Servs.,
Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a complaint’s factual
allegations, the court must accept as true all well-pleaded material facts alleged in the complaint
and construe them in the light most favorable to the non-moving party. Wilson v. HewlettPackard Co., 668 F.3d 1136, 1140 (9th Cir. 2012); Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d
992, 998 (9th Cir. 2010). To be entitled to a presumption of truth, allegations in a complaint
“may not simply recite the elements of a cause of action, but must contain sufficient allegations
of underlying facts to give fair notice and to enable the opposing party to defend itself
effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). All reasonable inferences from
the factual allegations must be drawn in favor of the plaintiff. Newcal Indus. v. Ikon Office
Solution, 513 F.3d 1038, 1043 n.2 (9th Cir. 2008). The court need not, however, credit the
plaintiff’s legal conclusions that are couched as factual allegations. Ashcroft v. Iqbal, 556 U.S.
662, 678-79 (2009).
A complaint must contain sufficient factual allegations to “plausibly suggest an
entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the
expense of discovery and continued litigation.” Baca, 652 F.3d at 1216. “A claim has facial
plausibility when the pleaded factual content allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 663 (citing Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 556 (2007)).

PAGE 4 – OPINION AND ORDER

BACKGROUND
The labor dispute giving rise to this case and its related cases both before this Court and
the National Labor Relations Board (“NLRB”) is factually intensive and “highly complex and
very technical.” Int’l Longshore & Warehouse Union, AFL-CIO, 2013 WL 4587186 (NLRB
Aug. 28, 2013). For purposes of the pending motions, the Court briefly summarizes the facts
admitted to or alleged by ICTSI or the Port that are relevant to the specific counterclaims PMA
and ILWU have moved to dismiss.
ILWU is a labor union that “represents longshore workers, longshore mechanics,
gearmen, and marine clerks, employed by waterfront companies who are members of PMA, at
all West Coast ports including Portland, Oregon.” Compl. (ECF 1) ¶ 3; ICTSI Am. Answer and
Counterclaims (ECF 109) (“ICTSI CC”) ¶ 61. PMA is “a multiemployer collective bargaining
association whose members include stevedoring companies, terminal operators, and maintenance
and repair contractors that employ dockworkers, such as longshoremen” throughout the West
Coast. Compl. ¶ 4; ICTSI CC ¶ 61. PMA has approximately 70 members companies, each of
whom delegate bargaining authority to PMA. ILWU and PMA are parties to the Pacific Coast
Longshore Contract Document (“PCLCD”), a collective bargaining agreement covering
commercial ports along the West Coast, which governs the terms and conditions of employment
of all longshore workers. The PCLCD is administered by the joint Coast Labor Relations
Committee (“CLRC”), which is composed of representatives of ILWU and PMA.
PMA pays more than 50 percent of the cost to operate a joint dispatch facility with
ILWU. The dispatch facility determines which longshoreman to dispatch, pays the salary and
benefits of those who are dispatched, and is paid by member and non-member employers based
on hours worked by longshoremen.

PAGE 5 – OPINION AND ORDER

For decades, PMA and ILWU negotiated successive bargaining agreements. In 2008, the
PCLCD included for the first time a provision that maintenance and repair work, including the
reefer work at issue in this case, be performed by ILWU-represented employees. Before this
time, the reefer work had been performed at some ports, including Terminal 6, by employees
who were not ILWU members. When the 2008 PCLCD was negotiated, PMA members that had
direct contracts with other unions for the reefer work were exempted from the new requirement
that such work be assigned to ILWU members.
The Port operated Terminal 6 until February 2011, when ICTSI commenced operating
Terminal 6 pursuant to a long-term lease agreement between the Port and ICTSI (“Terminal 6
Lease”). IBEW-represented employees of the Port had performed the reefer work on Terminal 6
for decades. Because the Port was not a PMA member, it was not bound by the PCLCD and did
not receive the benefit of the bargained exemption in the 2008 PCLCD for current PMA
members exempting them from assigning reefer work to ILWU members. Even after ICTSI took
over operations at Terminal 6, the Port continued, under the terms of the Terminal 6 Lease, to
manage the reefer work and assign that work to IBEW-represented Port employees. ICTSI joined
PMA in June 2011, several months after it had entered into the Terminal 6 Lease.
In 2011 and 2012, ILWU filed numerous grievances against ICTSI and other PMA
members complaining about the non-ILWU workers performing the reefer work. IBEW
threatened to picket if the reefer work were assigned to ILWU-represented employees. ICTSI
then filed a complaint before the NLRB against IBEW, in which ILWU intervened. The night
before the NLRB hearing on May 24, 2012, the CLRC held a meeting to which ICTSI and the
Port were not invited and agreed that the reefer work at Terminal 6 should be performed by
ILWU-represented workers. Shortly thereafter, in June 2012, an arbitrator reached the same

PAGE 6 – OPINION AND ORDER

conclusion and ordered ICTSI to have ILWU-represented workers perform the reefer work. In
August 2012 the NLRB awarded the reefer work to ILWU-represented workers.2
PMA, with the encouragement and direction of ILWU, threatened to fine ICTSI $50,000
per day and to expel ICTSI from the PMA if ICTSI did not have ILWU members perform the
reefer work. PMA member companies also threatened to bypass the Port unless the reefer work
was performed by ILWU members. Beginning in June 2012, ILWU “engaged in slowdowns,
work stoppages, safety gimmicks and the like and have prosecuted numerous grievances against
both ICTSI and ocean carriers calling on Portland in an effort to force ICTSI to assign the
disputed work to the ILWU; and to ignore the NLRB’s jurisdictional ruling.” ICTSI CC ¶ 69G.
PMA and ILWU also dispatched “inefficient” workers and workers who are not “Registered
Longshoremen” to ICTSI. ICTSI CC ¶¶ 69O, P. PMA and ILWU filed this action in federal
court to enforce the arbitration award and force ICTSI to assign the reefer work to ILWU
members, and PMA filed another federal lawsuit seeking to invalidate the NLRB decision
awarding the work to IBEW-represented workers.3 ICTSI and the Port responded to these actions
by filing several complaints before the NLRB, alleging that these actions by ILWU were unfair
labor practices in violation of labor law.4
ICTSI also alleges that ILWU “caused” the Port of San Diego to replace a non-PMA
member with a PMA member, caused EGT, LLC (“EGT”) in the Port of Longview to terminate
the services of a company that did not use ILWU-represented labor and execute a collective
2

This decision was subsequently vacated. See Pac. Mar. Ass’n v. N.L.R.B., Case No.
3:12-cv-02179-MO, Judgment, Docket 54 (D. Or. June 17, 2013).
3

PMA ultimately prevailed in that lawsuit and the NLRB award was vacated. Supra n.2.

4

After the briefing and oral argument on the pending motions, the NLRB issued a
decision concluding that ILWU had engaged in unfair labor practices. Int’l Longshore &
Warehouse Union, AFL-CIO, 2013 WL 4587186 (NLRB Aug. 28, 2013).
PAGE 7 – OPINION AND ORDER

bargaining agreement in which EGT agreed to use ILWU-represented workers, and threatened
third parties in other ports, insisting that a PMA member be retained to perform longshore
services. ICTSI CC ¶¶ 69K-M.
DISCUSSION
A. ICTSI’s Antitrust Counterclaim
In a single counterclaim against both PMA and ILWU that ICTSI labels “Antitrust,”
ICTSI alleges that PMA and ILWU “have violated the provisions of 15 U.S.C. §§ 1 and 2 of the
Sherman Act.” ICTSI CC ¶ 58. PMA moves to dismiss ICTSI’s antitrust counterclaim on the
grounds that the alleged actions on which the antitrust counterclaim is based are exempted from
the federal antitrust laws pursuant to the nonstatutory labor exemption. ILWU joins this motion
and further moves to dismiss ICTSI’s antitrust counterclaim to the extent it is based on
allegations of ILWU’s unilateral, traditional union activity on the grounds that this conduct is
subject to the statutory labor exemption from federal antitrust laws. As discussed below, both of
these arguments are well taken, and ICTSI’s antitrust counterclaim is dismissed.
1. The Noerr-Pennington doctrine immunizes PMA and ILWU’s federal lawsuits
from antitrust scrutiny
Before considering the statutory and nonstatutory labor exemptions from the federal
antitrust laws argued by PMA and ILWU, the Court notes that ICTSI bases its antitrust
counterclaim, in part, on the fact that PMA and ILWU have not dismissed their claims in this
lawsuit and have filed a second lawsuit challenging the NLRB’s jurisdiction. The NoerrPennington doctrine “provides broad antitrust protection for those who ‘petition the government
for a redress of grievances.’” USS-POSCO Indus. v. Contra Costa Cnty. Bldg. & Constr. Trades
Council, AFL-CIO, 31 F.3d 800, 810 (9th Cir. 1994) (quoting City of Columbia v. Omni Outdoor
Adver., Inc., 499 U.S. 365, 378 (1991). This protection extends to petitioning administrative
PAGE 8 – OPINION AND ORDER

agencies and courts. Id. This protection may be lost when parties institute “sham” proceedings
“with or without probable cause, and regardless of the merits of the cases.” Cal. Motor Transp.
Co. v. Trucking Unlimited, 404 U.S. 508, 511-12 (1972). ICTSI alleges, in conclusory fashion,
that the two federal lawsuits brought by PMA and ILWU are a “sham.”
ICTSI fails, however, sufficiently to allege facts from which the Court can reasonably
infer that the two federal lawsuits are a sham. The act of filing these two lawsuits does not
support a contention that ILWU and PMA are inappropriately using the courts to achieve an
anticompetitive goal without consideration of the merits of their cases. In considering each case,
they are not “objectively baseless in the sense that no reasonable litigant could realistically
expect success on the merits.” Prof’l Real Estate Investors, Inc. v. Columbia Pictures Indus.
Inc., 508 U.S. 49, 60 (1993). In fact, PMA prevailed at summary judgment in one of the cases.
See Pac. Mar. Ass’n v. N.L.R.B., Case No. 3:12-cv-02179-MO, Judgment, Docket 54 (D. Or.
June 17, 2013). This prohibits the application of the “sham exception.”
To the extent ICTSI is attempting to allege a sham exception based on a “whole series of
legal proceedings,” it is doubtful that two cases are sufficient, but even if they were, the sham
exception still would not apply. USS-POSCO, 31 F.3d at 811. In considering the application of
the sham exception to an alleged series of legal proceedings, the question is not whether any one
case has merit, but whether the cases are brought pursuant to a policy of commencing
proceedings without regard to their merits. Id. Because PMA has already prevailed at summary
judgment in one of the two lawsuits, it cannot reasonably be alleged that these lawsuits were
brought without regard to their merits. Id. (finding that a “batting average” of approximately .500
“cannot be reconciled with the charge that the unions were filing lawsuits and other actions

PAGE 9 – OPINION AND ORDER

willy-nilly without regard to success”). Thus, the allegations that ILWU and PMA have engaged
in federal litigation cannot support ICTSI’s antitrust counterclaim.
2. The statutory labor exemption applies to the alleged conduct solely performed
by ILWU
Based on the “‘interlacing’” Sherman, Clayton, and Norris-LaGuardia Acts, certain
conduct by organized labor is given a “statutory” exemption from federal antitrust laws. USSPOSCO, 31 F.3d at 805 (quoting United States v. Hutcheson, 312 U.S. 219, 232 (1941); see also
Connell Constr. Co. v. Plumbers & Steamfitters Local Union No. 100, 421 U.S. 616, 621 (1975).
As long as a union acts in its own legitimate self-interest and does not combine with nonlabor
groups, these statutes exempt from antitrust scrutiny traditional union activities, including
secondary picketing, boycotts, hand-billing, and encouraging work stoppages. See Connell, 421
U.S. at 622; USS-POSCO, 31 F.3d at 805, 808-809.
In applying the statutory labor exemption, courts do not distinguish the “licit and the
illicit” or look to “the wisdom or unwisdom, the rightness or wrongness, the selfishness or
unselfishness of the end of which the particular union activities are the means.” Hutcheson, 312
U.S. at 232. “[W]here a union engages in activities normally associated with labor disputes, these
will be presumed to be in pursuit of the union’s legitimate interest absent a very strong showing
to the contrary.” USS-POSCO, 31 F.3d at 808. Union activity done to “eliminate non-union
shops altogether by making an example” of a particular employer is a legitimate labor goal
subject to the strong presumption, as is activity done to preserve jobs for union members. See,
e.g., id. at 809 (noting that traditional union activities done to eliminate non-union shops are in
the union’s legitimate self-interest); Intercontinental Container Transp. Corp. v. New York
Shipping Ass’n, 426 F.2d 884, 887 (2d Cir. 1970) (“Union activity having as its object the
preservation of jobs for union members is not violative of the anti-trust laws.”). The statutory
PAGE 10 – OPINION AND ORDER

labor exemption is not an affirmative defense but is an element (or, to be precise, its
inapplicability is an element) of any claim that a union has violated the antitrust laws.
USS-POSCO, 31 F.3d at 805 n.3. Accordingly, the party bringing the antitrust claim bears the
burden of proving that the exemption does not apply. Id.
Here, ICTSI’s antitrust counterclaim is based, in part, on allegations that ILWU engaged
in the traditional activities of work stoppages, slowdowns, and filing grievances in an attempt to
force ICTSI to assign the reefer work to ILWU workers. ICTSI CC ¶ 69G. ICTSI has not alleged
that PMA and ILWU conspired together and agreed that ILWU would engage in such conduct,
nor could such an allegation plausibly be made. PMA members suffer as a result of the alleged
work stoppage and slow downs, and PMA filed its own lawsuit against ILWU to restrain this
alleged conduct.
The alleged work stoppages, slowdowns, and filing of grievances by ILWU are
traditional union activity, done for the purpose of trying to preserve jobs for ILWU workers.
Although ILWU workers did not historically perform reefer services at Terminal 6, the
negotiated compromise in the 2008 PCLCD requiring that reefer work be assigned to ILWU
members was an attempt to preserve jobs for ILWU members because other jobs historically
performed by ILWU members were being lost to technology. Because these actions were done in
furtherance of ILWU’s legitimate self-interest and were not done in concert with a nonlabor
group, the Court cannot look to the wisdom or wrongness of the alleged activities. They are
exempt from federal antitrust law.
ICTSI also alleges that ILWU threatened and otherwise “caused” third parties to use
PMA members to provide longshore services in other ports and use ILWU labor. ICTSI CC
¶¶ 69K, L, M. First, such allegations are insufficient to state a claim for antitrust liability or

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injury. ICTSI does not allege how or why ILWU “caused” the other ports to use PMA members.
ICTSI also does not allege that ILWU engaged in this conduct at the behest of PMA to reduce
competition or drive out competitors of PMA or its members. Additionally, as discussed further
below, PMA has more than 70 members who are competitors with one another, and thus does not
fall within the classical definition of a “monopoly” under federal antitrust law. Second, even if
these allegations by ICTSI gave rise to potential antitrust liability, the union’s activities as
alleged are exempt under the statutory labor exemption. The alleged conduct was engaged in by
the union in its own legitimate self-interest. As admitted by ICTSI in its Answer and
Counterclaims, ILWU represents longshore workers who are employed by members of PMA.
Thus, having ports use vendors that are PMA members necessarily results in the use of ILWU
labor. This is a legitimate union goal. Thus, the alleged conduct is exempt from federal antitrust
law.
3. The nonstatutory labor exemption applies to the alleged joint action by ILWU
and PMA
ICTSI also bases its antitrust counterclaim on alleged conduct pursuant to alleged
agreements between PMA and ILWU. The statutory labor exemption does not exempt concerted
action or agreements between unions and nonlabor parties. Connell, 421 U.S. at 622. Thus, the
alleged conduct is not subject to the statutory exemption. It is, however, subject to the
nonstatutory labor exemption.
a. The contours of the nonstatutory labor exemption
The Supreme Court has recognized that a proper accommodation between the
congressional policy favoring collective bargaining and the congressional policy favoring free
competition “requires that some union-employer agreements be accorded a limited nonstatutory
exemption from antitrust sanctions.” Id. This exemption “interprets the labor statutes . . . as
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limiting an antitrust court’s authority to determine, in the area of industrial conflict, what is or is
not a ‘reasonable’ practice” and “substitutes legislative and administrative labor-related
determinations for judicial antitrust-related determinations as to the appropriate legal limits of
industrial conflict.” Brown v. Pro Football, Inc., 518 U.S. 231, 236-37 (1996). “‘[S]ome
restraints on competition imposed through the bargaining process must be shielded from antitrust
sanctions’ to give effect to federal labor policy and to allow meaningful collective bargaining to
occur.” California ex rel. Harris v. Safeway, Inc., 651 F.3d 1118, 1125 (9th Cir. 2011) (en banc)
(“Safeway”) (alteration in original) (quoting Brown, 518 U.S. at 237). “[I]t would be difficult, if
not impossible, to require groups of employers and employees to bargain together, but at the
same time to forbid them to make among themselves or with each other any of the competitionrestricting agreements potentially necessary to make the process work.” Brown, 518 U.S. at 237
(emphasis in original). The precise boundaries of the nonstatutory labor exemption have never
been delineated by the Supreme Court, and what guidance it has given “‘has come mostly in
cases in which agreements between an employer and a labor union were alleged to have injured
or eliminated a competitor in the employer’s business or product market.’” Safeway, 651 F.3d
at 1125 (quoting Clarett v. Nat’l Football League, 369 F.3d 124, 131 (2d Cir. 2004)).
Historically, the application of the nonstatutory labor exemption was only considered in
cases involving union-employer agreements. See Connell, 421 U.S. at 622 (noting that the
nonstatutory exemption is necessary for “some union-employer agreements”) (emphasis added).
In considering whether the nonstatutory exemption applies to an agreement between a union and
an employer, the Court of Appeals for the Ninth Circuit has adopted the three-part test articulated
in Mackey v. Nat’l Football League, 543 F.2d 606 (8th Cir. 1976). See Phoenix Elec. Co. v. Nat’l
Elec. Contractors Ass’n, 81 F.3d 858, 861 (9th Cir. 1996). Under this test,

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the parties to an agreement restraining trade are exempt from
antitrust liability only if (1) the restraint primarily affects the
parties to the agreement and no one else, (2) the agreement
concerns wages, hours, or conditions of employment that are
mandatory subjects of collective bargaining, and (3) the agreement
is produced from bona fide, arm’s-length collective bargaining.
Id. This test was derived primarily from the Supreme Court’s decisions in Local Union No. 189,
Amalgamated Meat Cutters & Butcher Workmen of N. Am. v. Jewel Tea Co., 381 U.S. 676
(1965), Connell, and United Mine Workers v. Pennington, 381 U.S. 657 (1965). Mackey, 543
F.2d at 614.
ICTSI argues that the Mackey test does not survive the Supreme Court’s decision in
Brown and that Brown added the requirement that in order to obtain the benefit of the
nonstatutory exemption, the conduct at issue must not violate labor law. The Court does not read
Brown so broadly.
In Brown, the Supreme Court extended the nonstatutory labor exemption, under very
limited circumstances, to concerted conduct by employers after impasse had been reached
(which the Supreme Court described as occurring during the collective bargaining “process”).
Brown, 518 U.S. at 250. Because Brown involved an agreement only among employers that was
not produced from bona fide, arm’s-length collective bargaining, the third prong of the Mackey
test was not met, yet the nonstatutory exemption was still applied. This arguably calls into
question the continued validity of the Mackey test.
Brown, however, did not expressly abrogate the Mackey test and did not even address
whether the Mackey test survives for cases involving union-employer agreements. The Supreme
Court in Brown specifically noted that its opinion addressed only the narrow issue of whether the
scope of the nonstatutory labor exemption included “an agreement among several employers
bargaining together to implement after impasse the terms of their last best good-faith wage
PAGE 14 – OPINION AND ORDER

offer.” Brown, 518 U.S. at 238. The Supreme Court in Brown was not analyzing the scope or
application of the nonstatutory exemption to union-employer agreements. Additionally, the
Supreme Court in Brown cited with favor the cases from which Mackey garnered the principles
for its test—Jewel Tea, Pennington, and Connell. Thus, Brown expanded the nonstatutory
exemption and did not limit the application of the exemption in the union-employer context.
The Court of Appeals for the Ninth Circuit also has not proclaimed that the Mackey test
has been fully abrogated. In a case involving an employer-only agreement, a panel noted that
Brown appeared to abrogate Mackey because it applied the nonstatutory exemption to an
employer-only agreement (thus violating Mackey’s third prong). Cal. ex rel. Brown v. Safeway,
Inc., 615 F.3d 1171, 1200 n.15 (9th Cir. 2010), reheard en banc by Safeway, 651 F.3d 1118.
That case was reheard en banc, however, and the en banc opinion eliminated the discussion of
the status of the Mackey test after Brown. Safeway, 651 F.3d 1118. Further, that case involved
employer-only agreements, which are expressly governed by Brown.
The Court has an additional concern with reading Brown and Safeway as abrogating the
Mackey test and setting a new standard for analyzing the application of the nonstatutory
exemption in cases involving employer-union agreements. Brown and Safeway involve
employer-only agreements and the unilateral imposition of terms by employers. These types of
actions are of particular concern in both labor and antitrust law, and thus the courts were careful
to circumscribe narrow circumstances in which employer-only action can obtain the benefit of
the nonstatutory labor exemption from antitrust liability. Brown and Safeway considered several
factors in deciding whether employer-only agreements should benefit from the nonstatutory

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labor exemption.5 These include factors similar to the first two prongs of the Mackey test, but
also include factors arising from the concern regarding employer-only actions. Specifically, the
courts analyzed whether the conduct at issue was directly and extensively regulated by labor law
and was clearly acceptable under labor law. Brown, 518 U.S. at 238; Safeway, 651 F.3d at 1129.
There is no indication in Brown and Safeway that these requirements extend to cases involving
union-employer agreements.
Notably, the nonstatutory labor exemption historically could apply to union-employer
agreements, even if the conduct violated labor law. See Richards v. Neilsen Freight Lines, 810
F.2d 898, 906 (9th Cir. 1987); accord Connell, 421 U.S. at 622-25 (analyzing whether the
nonstatutory labor exemption applied separately from whether the conduct violated labor law,
thereby suggesting that the presence of a labor law violation may not itself decide the exemption
issue). Further, the policy behind the creation and enforcement of the nonstatutory exemption is
to “prevent ‘judicial use of antitrust law to resolve labor disputes’ and [to limit] antitrust courts’
authority to determine what qualifies as a reasonable practice in industrial conflict.” Safeway,
651 F.3d at 1127 (quoting Brown, 518 U.S. at 236-37). Without a clear indication from the
Supreme Court or the Ninth Circuit, this Court does not interpret Brown and Safeway as creating
potential antitrust liability for union-employer agreements solely because the conduct also might
create liability under labor law. Such an interpretation is antithetical to the purpose behind the
nonstatutory labor exemption.
5

The cases considered whether: (1) the labor market, as opposed to the “business” or
“product” market was involved; (2) the conduct took place during or immediately after a
collective-bargaining negotiation; (3) the conduct grew out of, and was directly related to, the
lawful operation of the collective bargaining process; (4) the conduct was an accepted practice of
labor negotiations that has been extensively regulated and carefully circumscribed; (5) the
conduct involved a matter that the parties were required to negotiate collectively; and (6) the
conduct concerned only the parties to the collective-bargaining relationship. Brown, 518 U.S.
at 250; Safeway, 651 F.3d at 1129, 1130, 1130 n. 7.
PAGE 16 – OPINION AND ORDER

b. Applying the nonstatutory labor exemption
The nonstatutory labor exemption is applicable to multiemployer groups. Brown, 518
U.S. at 240 (“Multiemployer bargaining itself is a well-established, important, pervasive method
of collective bargaining, offering advantages to both management and labor.”). As discussed
above, in evaluating whether the nonstatutory exemption applies in this case, the Court applies
the Mackey test.
ICTSI alleges various conduct by ILWU and PMA in support of ICTSI’s antitrust
counterclaim, but all of the alleged conduct arises out of ILWU and PMA’s interpretation of the
PCLCD. The alleged conduct by ILWU and PMA, individually and together, was engaged-in by
PMA and ILWU to enforce their interpretation of the PCLCD.6 The Court has already
determined that some of the alleged conduct is exempt from antitrust scrutiny under the statutory
labor exemption and the Noerr-Pennington doctrine, so the Court considers only the remaining
alleged conduct: (1) that PMA, in concert with ILWU, threatened to fine or expel ICTSI; (2) that
PMA agreed to a CLRC meeting without notifying ICTSI; (3) that ILWU and PMA agreed to
discriminate against ICTSI and against non-PMA employers by exempting PMA members that
had direct contracts with other unions for the performance of the reefer work in the 2008
PCLCD; (4) that PMA members threatened to bypass Terminal 6; (6) that ILWU violated labor
law; and (7) that ILWU and PMA have dispatched inefficient and underqualified workers to
ICTSI. ICTSI CC ¶¶ 69A, B, C, D, E, F, N, O, P.
6

In its brief in response to the motion to dismiss, ICTSI argues that its antitrust
counterclaim is also based on a May 23, 2012 CLRC “agreement” between ILWU and PMA.
ICTSI Resp. Br. at 17-18. No such “agreement” was alleged in ICTSI’s counterclaims, and if it
were, it would not be a proper characterization of the May 23, 2012 meeting. As ICTSI properly
alleges, on May 23, 2012, the CLRC held a meeting and interpreted the PCLCD as requiring the
reefer work be assigned to ILWU-represented workers. This is an interpretation of the PCLCD,
not a separate agreement entered into between PMA and ILWU. Further, as alleged by ICTSI, it
is the role of the CLRC to interpret the PCLCD.
PAGE 17 – OPINION AND ORDER

i. The first prong of Mackey—whether the conduct primarily affects
the parties to the agreement
The remaining alleged conduct on which ICTSI bases its antitrust counterclaim,
enumerated above, primarily affects only members who are parties to the PCLCD,7 with the
exception of number three, ICTSI’s allegation that PMA and ILWU discriminate against nonPMA members by granting an exemption in the 2008 PCLCD to certain existing PMA members
so they could assign the reefer work to non-ILWU workers. The requirement that ILWU workers
be assigned the work, however, is only binding on PMA members, who are parties to the
collective bargaining agreement. Non-PMA members can compete for stevedoring work and its
ancillary services and can assign anyone they choose to perform reefer work. Non-PMA
members have no need for the exemption because they are not bound by the PCLCD’s
requirement to assign reefer work to ILWU members. Thus, the alleged restraint primarily
affects only the parties to the PCLCD.8 See Phoenix Elec., 81 F.3d at 862 (finding that an alleged
agreement that does not “impose its terms on any nonsignatory party” primarily affects only the
parties to the agreement).

7

ICTSI also alleges that PMA and ILWU work in concert to create a monopoly for PMA
members in the market of loading and unloading of freight, and related ancillary services, in
West Coast ports. Such conduct would affect nonparties to the PCLCD (e.g., non-PMA members
who wish to perform such work and cannot). As discussed in Section A.4 below, however, the
Court finds that ICTSI fails to state a claim for monopolization, attempted monopolization, or
conspiracy to monopolize, so this conduct is not relevant to the Court’s analysis on the
application of the nonstatutory labor exemption.
8

Although the dispute at Terminal 6 affects persons who are not parties to the agreement,
including the public, businesses who ship through Terminal 6, and the Port, this is not the type of
effect encompassed in the first prong of the Mackey test. All alleged anticompetitive conduct has
some effect on consumers and competitors, but courts look to the primary effect of the alleged
agreement and whether the alleged agreement “imposes its terms on any nonsignatory party.”
Phoenix Elec., 81 F.3d at 862. Here, the alleged agreement is the PCLCD, and it does not impose
the requirement that ILWU-represented workers be assigned reefer work on any nonsignatory
party.
PAGE 18 – OPINION AND ORDER

ICTSI also alleges that members who join PMA after the 2008 PCLCD was negotiated,
such as ICTSI, are discriminated against because they cannot benefit from the exemption. First,
these members are parties to the PCLCD, so this allegation does not run afoul of the first prong
of Mackey. Second, this allegation does not give rise to antitrust liability. Representatives who
negotiate collective bargaining agreements can favor some constituents over others. See Clarett,
369 F.3d at 139 (finding that representatives may advantage certain categories over others,
subject to the duty of fair representation, including favoring current employees over new
employees and excluding outsiders (citing Vaca v. Sipes, 386 U.S. 171, 177 (1967); Ford Motor
Co. v. Huffman, 345 U.S. 330, 338-39 (1953), Fibreboard Paper Prods. Corp v. N.L.R.B., 379
U.S. 203, 210-15, (1964))). Although those cases involve negotiation by labor representatives as
opposed to representatives of multiemployer groups, the Court does not see this as a material
difference in terms of the obligations of the negotiating representative. See, e.g., N.L.R.B. v.
Siebler Heating & Air Conditioning, Inc., 563 F.2d 366, 371 (8th Cir. 1977) (finding that
members of an employer group have, similar to labor, a right to expect that their interests will be
fairly represented and that their interests will not be “totally sacrificed”). At the time the 2008
PCLCD was negotiated, PMA representatives chose to favor existing PMA members over future
PMA members with regard to the exemption—such conduct does not support an antitrust
counterclaim by ICTSI.
The first prong of the Mackey test is met.
ii. The second prong of Mackey—whether the agreement concerns a
mandatory subject of collective bargaining
The second prong of the Mackey test is whether the agreement concerns wages, hours, or
conditions of employment that are mandatory subjects of collective bargaining. Work
assignments are mandatory subjects of collective bargaining, even if the employer is assigning
PAGE 19 – OPINION AND ORDER

work outside of the collective bargaining unit. See Antelope Valley Press, 311 NLRB 459, 460
(1993). Terms and conditions that relate to job preservation and minimizing the curtailment of
jobs are also subjects of mandatory bargaining. See Fibreboard Paper, 379 U.S. at 213; see also
Intercontinental, 426 F.2d at 887 (“The Supreme Court has repeatedly held that the preservation
of jobs is within the area of proper union concern.”). Changing the scope of a bargaining unit,
however, is not. Antelope Valley, 311 NLRB at 460.
ICTSI concedes that work preservation is a mandatory subject of collective bargaining,
but argues that because the 2008 PCLCD added reefer jobs that ILWU labor did not previously
perform in Portland, this aspect of the PCLCD was changing the scope of the bargaining unit and
was not, therefore, a mandatory subject of collective bargaining. ICTSI’s argument is not
persuasive.
To whom the reefer jobs must be assigned within the bargaining unit relates to work
assignments. It is, therefore, a subject of mandatory bargaining. Even if the provision did not
relate to the assignment of work, however, it relates to work preservation and minimizing the
curtailment of ILWU jobs. The provision in the 2008 PCLCD relating to the reefer work was
added to preserve ILWU jobs, as technology was eroding union jobs. Additionally, the reefer
work had been performed by ILWU-represented employees in some ports governed by the
PCLCD. Thus, this is a subject relating to work preservation and is a proper subject of
mandatory bargaining. See Nat’l Woodwork Mfrs. Ass’n v. N.L.R.B., 386 U.S. 612, 640-41
(1967); Antelope Valley, 311 NLRB at 460.
The fact that ILWU-represented employees did not previously perform the reefer work at
Terminal 6 and elsewhere is not dispositive of the question of whether this was work
preservation as opposed to a change in the scope of the bargaining unit. ICTSI alleges that ILWU

PAGE 20 – OPINION AND ORDER

and PMA represent labor and employers, respectively, for all of the West Coast ports, and that
only in “some” West Coast ports was the reefer work performed by non-ILWU-represented
employees. ICTSI CC ¶ 68. ICTSI argues that because ILWU labor did not perform the work at
Terminal 6 and “some” other ports, the 2008 PCLCD was a “land grab” in those ports. The
critical issue on this point is whether the universe for the work preservation analysis is
Terminal 6 and the other ports in which the reefer work was performed differently, or all of the
West Coast ports. That question was answered by the Ninth Circuit in Maui Trucking, Inc. v.
Operating Engineers Local Union No. 3 Int’l Union of Operating Engineers AFL-CIO, 37 F.3d
436 (9th Cir. 1994). In that case, the Ninth Circuit held that the relevant work universe is
coextensive with the bargaining unit. Id. at 439.
Here, the bargaining unit includes all of the West Coast ports and thus, that is the
universe for the job preservation analysis. A single collective bargaining agreement governs all
of the West Coast ports, many PMA members dock at multiple ports, and union members can
move to find work. “It would be senseless to break the [West Coast ports] into parts for this
analysis, possibly creating different rules for each [port].” Id. In most of the West Coast ports,
ILWU workers performed the reefer work. Thus, requiring in 2008 that the reefer work be
assigned to ILWU members was a job preservation issue and not a change in the scope of the
bargaining unit.
The second prong of the Mackey test is met.
iii. The third prong of Mackey—whether the agreement is the result
of bona fide, arm’s-length collective bargaining
ICTSI does not allege that the PCLCD was derived from anything other than bona fide,
arm’s-length collective bargaining. Indeed, ICTSI alleges that “[f]or many years, the ILWU and

PAGE 21 – OPINION AND ORDER

PMA have negotiated successful collective bargaining agreements. . . .” ICTSI CC ¶ 68
(emphasis added). Thus, the third prong of the Mackey test is met.
Accordingly, the challenged agreement between PMA and ILWU is exempt from
antitrust scrutiny based on the nonstatutory labor exemption.
4. Monopolization, Attempted Monopolization, and Conspiracy to Monopolize
ICTSI also alleges that ILWU and PMA have violated Section 2 of the Sherman Act
through a conspiracy to monopolize. One of the elements required to state a claim for violation
of Section 2 based on a theory of conspiracy to monopolize is the existence of a combination or
conspiracy to monopolize a relevant market. See Paladin Assocs., Inc. v. Mont. Power Co., 328
F.3d 1145, 1158 (9th Cir. 2003); see generally Rebel Oil Co. v. Atl. Richfield Co., 51 F.3d 1421,
1443 (9th Cir. 1995) (“To pose a threat of monopolization, one firm alone must have power to
control market output and exclude competition.”) (emphasis in original).
ICTSI alleges that the relevant market is “the loading and unloading of freight, and
related ancillary services, to and from dockside port of rest, for marine oceangoing cargo on
West Coast ports and/or the submarket of the metropolitan Portland area.” ICTSI CC ¶ 62. ICTSI
further alleges that PMA and ILWU jointly possess the means to exclude competition within the
relevant market. ICTSI, however, does not allege that ILWU and PMA are conspiring to create a
monopoly for any single PMA member or firm or even for a small group of PMA members.
Instead, ICTSI argues that ILWU and PMA are conspiring to create a monopoly on the West
Coast ports for the 70-member PMA. ICTSI’s allegations of such a conspiracy to create a
“shared monopoly” fail to state a claim under Section 2.
“[A]n allegation of conspiracy to create a shared monopoly does not plead a claim of
conspiracy under section 2.” Standfacts Credit Servs., Inc. v. Experian Info. Solutions, Inc., 405

PAGE 22 – OPINION AND ORDER

F. Supp. 2d 1141, 1152 (C.D. Cal. 2005). As further explained by the U.S. District Court for the
District of Columbia:
A monopoly arises when a single firm “controls all or the bulk of a
product’s output, and no other firm can enter the market, or expand
output, at comparable costs.” The very phrase “shared monopoly”
is paradoxical; when a small number of large sellers dominates a
market, this typically is described as an oligopoly. In enacting the
prohibitions on monopolies, Congress was concerned about “the
complete domination of a market by a single economic entity,” and
therefore did not include “shared monopolies” or oligopolies
within the purview of Section 2. As a result, “[o]ligopoly can, in
some cases, violate Sections 1 and/or 3 of the Sherman Act, but
competitors, by conspiring to maintain or create an oligopoly, do
not run afoul of the Section 2 prohibitions against monopoly.” To
the extent that plaintiffs have alleged a market structure in which
[Defendants] each possess and seek to protect market power within
the same markets, their monopoly claims based on an alleged
agreement to monopolize must fail.
Oxbow Carbon & Minerals LLC v. Union Pac. R. Co., 926 F. Supp. 2d 36, 46 (D.D.C. 2013)
(emphasis in original) (citations omitted).9
PMA is a multiemployer bargaining unit that negotiates collective bargaining agreements
and provides management and administrative services. It is not a competitor itself in the relevant
market—its 70 members are competitors with one another. The fact that, pursuant to federal law,
PMA shares the cost to run the joint dispatch center does not serve to make PMA a competitor
performing, for example, stevedoring services.
There are numerous competitors in the relevant market, including the more than 70 PMA
members and many non-PMA members. Thus, the alleged conduct by PMA and ILWU fails to

9

ICTSI also cites to United States v. Am. Airlines, 743 F.2d 1114 (5th Cir. 1984), which
is distinguishable. In that case, the Fifth Circuit held that an offer to fix prices among two
competitors who collectively controlled the market for a relevant period of time due to regulatory
constraints was an attempt to monopolize in violation Section 2. Such a price-fixing agreement
would have resulted in the equivalent of a single-firm price-setting, which is the essence of
monopolization. That is not what oligopolies do.
PAGE 23 – OPINION AND ORDER

state a claim for a violation of Section 2. See Terminalift LLC v. Int’l Longshore & Warehouse
Union Local 29, 2013 WL 2154793, at *3-4 (S.D. Cal. May 17, 2013) (“Because PMA members
compete against each other, the alleged conspiracy would create a ‘shared monopoly’ or
oligopoly. Such conduct is not a violation of section 2.”); Phoenix Elec. Co. v. Nat’l Elec.
Contractors Ass’n, Inc., 867 F. Supp. 925, 941-42 (D. Or. 1994) (rejecting a Section 2 claim
because “[a]s a multi-employer bargaining agent, it negotiates collective bargaining agreements
with the electrical union, and provides management and administrative services related to those
agreements. . . . There is likewise no suggestion that any one or small group of the contractors
who belong to [the multiemployer bargaining group] have or could obtain monopoly power. As
mentioned previously, nothing in the record suggests that the members of [the multi-employer
bargaining group] do not compete vigorously among themselves.”); accord Harking Amusement
Enters., Inc. v. Gen. Cinema Corp., 850 F.2d 477, 490 (9th Cir. 1988) (declining to decide
whether a shared monopoly could be viable under any circumstance, but holding that in a “small
market with numerous sellers, no claim is stated under section 2”).
5. Standing
ILWU and PMA also argue that ICTSI cannot maintain an antitrust lawsuit because it
lacks antitrust standing. Because the Court finds that the alleged behavior is exempt from
antitrust scrutiny under a combination of the Noerr-Pennington doctrine, the statutory labor
exemption, and the nonstatutory labor exemption, the Court declines to reach the question of
antitrust standing.
B. ICTSI’s Breach of Fiduciary Duty Counterclaim
ICTSI alleges that, pursuant to its membership in PMA, PMA is “authorized to represent
and act on behalf of” ICTSI and that PMA is authorized “to exercise independent judgment on
ICTSI’s behalf and/or to protect ICTSI’s economic and other interests with regards to labor
PAGE 24 – OPINION AND ORDER

relations issues.” ICTSI CC ¶ 75. ICTSI further alleges that it and PMA were in a fiduciary
relationship under which PMA owed ICTSI duties of care, loyalty, good faith and fair dealing,
and full, fair, and frank disclosure and that ICTSI breached those duties. Id. ¶¶ 76, 77.
PMA moves to dismiss ICTSI’s breach of fiduciary duty counterclaim, arguing that:
(1) the only potential fiduciary relationship and concomitant fiduciary duties alleged arise out of
California corporation law and, under that body of law, PMA does not owe fiduciary duties to
ICTSI; (2) the Court should abstain from considering the issue because it interferes with the
autonomy of a voluntary association’s internal management; and (3) the breach of fiduciary duty
counterclaim is preempted by the Labor Management Relations Act (“LMRA”),10 specifically
Section 301,11 and the Garmon preemption doctrine, which arises out of the National Labor
Relations Act (“NLRA”).12 PMA’s arguments are unavailing. Accordingly, PMA’s motion to
dismiss ICTSI’s breach of fiduciary duty claim is denied.
1. ICTSI has adequately pled a fiduciary relationship giving rise to fiduciary duties
a. PMA is the agent of ICTSI with respect to the negotiation,
administration, and management of the PCLCD
ICTSI alleges that PMA acts on behalf of ICTSI and exercises independent judgment on
ICTSI’s behalf in labor negotiations and labor relations issues. Although ICTSI does not use the
word “agent” to describe PMA’s relationship to ICTSI, these allegations serve to allege a
principal-agent relationship. See Eads v. Borman, 277 P.3d 503, 508 (Or. 2012) (“Classically, an
agency relationship ‘results from the manifestation of consent by one person to another that the
other shall act on behalf and subject to his control, and consent by the other so to act.’” (quoting
10

29 U.S.C. § 141, et seq.

11

29 U.S.C. § 185.

12

29 U.S.C. § 151, et seq.

PAGE 25 – OPINION AND ORDER

Vaughn v. First Transit, Inc., 206 P.3d 181, 186 (Or. 2009))).13 PMA does not dispute that it acts
as the agent for ICTSI and PMA’s other members with respect to the negotiation, administration,
and management of the PCLCD. Instead, PMA argues that it owes fiduciary duties to the
multiemployer group as a whole and not to any individual employer member.14
Agents owe independent fiduciary duties to their principals. See Boyer v. Salomon Smith
Barney, 188 P.3d 233, 237 (Or. 2008) (“The law of agency imposes duties on the agent; those
duties ‘exist[ ] independent of the contract and without reference to the specific terms of the
contract.’” (citing Georgetown Realty v. Home Ins. Co., 831 P.2d 7, 14 (Or. 1992))). Here, PMA
represents multiple principals. Oregon law recognizes that an agent can serve more than one
principal. Wallulis v. Dymowski, 918 P.2d 755, 764 (Or. 1996); Blair v. United Fin. Co., 365
P.2d 1077, 1078 (Or. 1961). Oregon courts have not, however, defined the contours of the
fiduciary duties owed by an agent to a principal in the multiple representation context, so the
Court looks to the Restatement of Agency15 for guidance. Comment b to Section 3.16, Agent for
13

PMA argues that California law should apply because the allegations involve PMA’s
“internal affairs” and any duty would arise out of California state law governing non-profit
mutual benefit organizations. PMA Br. at 18, 21. Dkt. 132. The Court finds that the fiduciary
relationship stems from the agency relationship between a principal and its agent, however, and
not PMA’s corporate status. Additionally, the specific allegations from which the Court
determines that ICTSI states a counterclaim for breach of fiduciary duty do not involve PMA’s
“internal affairs.” The Court applies Oregon law, however, the choice of law is immaterial to the
outcome because, as PMA and ICTSI both concede, Oregon and California law on claims for
breach of fiduciary do not conflict.
14

PMA also argues that because it is a California non-profit mutual benefit corporation, it
does not owe any fiduciary duties to ICTSI. Whether PMA’s status as a non-profit mutual benefit
corporation gives rise to fiduciary obligations is irrelevant, however, because the Court finds that
it is PMA’s status as an agent of ICTSI that gives rise to fiduciary obligations. Non-profit mutual
benefit corporations do not necessarily act as agents to their members, and PMA cites to no
authority that, when non-profit mutual benefit corporations do act as an agent, their status as a
non-profit mutual corporation negates agency principles.
15

In considering the contours of agency law, Oregon courts look to the Restatement of
Agency. See Vaughn, 206 P.3d at 185-89.
PAGE 26 – OPINION AND ORDER

Coprincipals, states that “[a]n agent who acts on behalf of more than one principal in the same
matter or transaction owes duties to all principals.” Restatement (Third) of Agency § 3.16 cmt. b
(2006). The Restatement goes on to describe the duties owed to multiple principals:
(2) An agent who acts for more than one principal in a transaction
between or among them has a duty
(a) to deal in good faith with each principal,
(b) to disclose to each principal
(i) the fact that the agent acts for the other principal
or principals, and
(ii) all other facts that the agent knows, has reason
to know, or should know would reasonably affect
the principal’s judgment unless the principal has
manifested that such facts are already known by the
principal or that the principal does not wish to know
them, and
(c) otherwise to deal fairly with each principal.
Id. § 8.06(2). In sum, “the agent owes duties of good faith, disclosure, and fair dealing to all of
the principals.” Id. cmt. d(2).
Additionally, as noted above, the Court concludes that the multiemployer bargaining
representative is analogous to the labor representative and has the right to favor one constituent
over another. The Court similarly concludes that the multiemployer group representative, like the
labor representative, has a duty of fair representation to its constituents. See Siebler, 563 F.2d at
371 (finding that members of an employer group have the right to expect that their interests will
be fairly represented and that their interests will not be “totally sacrificed”). Although an
individual employer’s interests may be subsumed to the interest of the group as a whole, that
does not mean that PMA does not owe any duty to its individual employer members.

PAGE 27 – OPINION AND ORDER

PMA is contracting on behalf of its members with a third party and negotiating a binding,
legal agreement between its members and ILWU. Further, depending on the circumstances and
the stage of the collective bargaining process, employers may not be able to withdraw from a
multiemployer bargaining group if the bargaining representative is not fairly representing the
employer. See Charles D. Bonanno Linen Serv., Inc. v. N.L.R.B., 454 U.S. 404, 412 (1982)
(noting that labor law “has sought to further the utility of multiemployer bargaining as an
instrument of labor peace by limiting the circumstances under which any party may unilaterally
withdraw during negotiations” and finding that impasse does not constitute extraordinary
circumstances warranting withdrawal from a multiemployer group); Siebler, 563 F.2d at 371
(“We recognize that dissatisfaction with the results of group bargaining does not justify an
untimely withdrawal.”). Given these circumstances, if the multiemployer group representative
owes no duty to any individual employer member and acts in bad faith, an employer may not
have any recourse. Multiemployer bargaining groups are “important” and offer “advantages to
both management and labor.” Brown, 518 U.S. at 240. A finding that a multiemployer group
representative owes no duty to any individual employer may weaken this bargaining institution.
Although PMA has a great deal of freedom to consider the interests of the multiemployer
group as a whole, the Court finds that PMA is the agent of ICTSI and owes ICTSI a duty of fair
representation and to deal in good faith with respect to the negotiation, administration, and
management of the PCLCD.16 Other courts have similarly spoken of the relationship between
multiemployer groups and the individual employers in agency terms. See, e.g., Fed. Maritime
Comm’n v. Pac. Maritime Ass’n , 435 U.S. 40, 45 (1978) (referencing PMA as “a collectivebargaining agent for a multiemployer bargaining unit made up of various employers of Pacific
16

There is no allegation that PMA did not fully disclose to ICTSI the fact that it
represents other principals or other facts that ICTSI should know before joining the PMA.
PAGE 28 – OPINION AND ORDER

coast dockworkers”); Resort Nursing Home v. N.L.R.B., 389 F.3d 1262, 1270 (D.C. Cir. 2004)
(“If an employer is dissatisfied with the representation of its multi-employer association, it
retains its remedies against the association under contract and agency law.”); N.L.R.B. v. Marcus
Trucking Co., 286 F.2d 583, 588 (2d Cir. 1961) (discussing the multiemployer group relationship
as governed by agency law when analyzing an individual employer’s withdrawal from the unit,
citing the Restatement of Agency, and noting that the NLRB has passed on “the question
whether the Board has power to alter the rules of agency applicable in multi-employer
bargaining”).
b. ICTSI has pled sufficient facts to state a claim against PMA for breach of
fiduciary duty
ICTSI alleges that PMA breached its duties of good faith and fair representation by:
(a) failing to provide notice to ICTSI of the CLRC meeting and failing to fairly consider or
present ICTSI’s position; (b) refusing to present ICTSI’s position to joint committees and
arbitrators; (c) threatening to fine or expel ICTSI if ICTSI did not assign the reefer work to
ILWU members; (d) joining ILWU in legal efforts to compel ICTSI to assign the reefer work to
ILWU members; (e) failing to vigorously seek the confirmation of the arbitration awards finding
ILWU guilty of work stoppages and slowdowns; (f) causing inefficient or unqualified workers to
be dispatched to ICTSI through the jointly administered hiring hall and failing to act on ICTSI’s
complaints regarding the quality of dispatched personnel and suggestions of a hiring hall
monitor; and (g) failing to bring issues before the CLRC in order to stop the ongoing slowdowns,
work stoppages, and safety gimmicks by ILWU. ICTSI CC ¶¶ 77A-G. The Court analyzes
whether ICTSI alleges sufficient facts from which the Court could find that any of the alleged
conduct was done in bad faith or constituted unfair representation.

PAGE 29 – OPINION AND ORDER

The Court concludes that ICTSI fails to allege sufficient facts from which the Court could
reasonably infer that the legal efforts to compel ICTSI to assign the reefer work were not done in
good faith (¶ 77D). As discussed above in the Court’s Noerr-Pennington analysis, ICTSI does
not sufficiently allege facts from which it could be inferred that the legal proceedings were a
sham or were otherwise filed in bad faith.
The Court also finds that ICTSI fails to plead sufficient facts from which the Court could
reasonably infer that PMA has acted in bad faith with respect to the alleged work stoppages and
slowdowns by ILWU (¶¶ 77E, G). PMA may not have brought the issue to the CLRC, but PMA
filed a lawsuit in federal court seeking to confirm the arbitration award. Pac. Mar. Ass’n v. Int’l
Longshore & Warehouse Union Local 8, Case No. 3:12-cv-01100-SI (D. Or.). Additionally, in
that lawsuit PMA sought a temporary restraining order to stop the alleged work stoppages and
slowdowns. ICTSI alleges no facts showing why filing a federal lawsuit does not constitute
“vigorously seek[ing]” confirmation of the arbitration award or why it is bad faith to seek a
restraining order in federal court as opposed to bringing the issue before the CLRC.
With respect to ICTSI’s allegation that it is a breach of fiduciary duty for PMA to
threaten to fine or expel ICTSI (¶ 77C), ICTSI does not allege sufficient facts to show a breach
of fiduciary duty. PMA has the right to interpret the PCLCD. ICTSI does not allege facts
showing that PMA’s interpretation of the PCLCD as requiring the reefer work be assigned to
ILWU members was done in bad faith. PMA also has the right, under its Bylaws, to fine or expel
members. The mere fact that PMA threatened to exercise such rights is not sufficient to show
bad faith or unfair representation.
The Court, however, finds that ICTSI has alleged sufficient facts from which it can
reasonably be inferred that PMA acted in bad faith or unfairly represented ICTSI with respect to

PAGE 30 – OPINION AND ORDER

the May 2012 CLRC meeting and other arbitration and committee meetings (¶¶ 77A, B). ICTSI
alleges that PMA did not notify ICTSI of the CLRC meeting, did not consider ICTSI’s position
for that meeting and other meetings, and did not present ICTSI’s position. PMA also did not
offer ICTSI the opportunity to present its own position. ICTSI appears to be entitled to have its
position considered in CLRC and other committee meetings and arbitrations. It may well be that
PMA may elect not to agree with or present ICTSI’s position and may present PMA’s own,
conflicting, position. But PMA is ICTSI’s agent with respect to the administration and
management of the PCLCD and if PMA is not going to present ICTSI’s position, basic notions
of fairness and due process require that PMA notify ICTSI of that fact and that ICTSI be given
the opportunity to present its own position.
The Court also finds that ICTSI has alleged sufficient facts from which it can reasonably
be inferred that PMA acted in bad faith with respect to the dispatch of workers from the hiring
hall to ICTSI (¶ 77F). PMA administers the hiring hall jointly with ILWU. ICTSI specifically
alleges that inefficient or unqualified workers were dispatched, that ICTSI complained to PMA
about the quality of the workers, that PMA ignored those complaints, and that PMA refused
ICTSI’s request that a hiring hall monitor be appointed to prevent hiring hall abuses. Assuming
those allegations to be true, as the Court must at this stage in the proceedings, these allegations
are sufficient to state a counterclaim for breach of fiduciary duty.
2. The California abstention doctrine relating to certain interpretation of rules and
laws of private organizations does not apply
PMA argues that the Court should apply the abstention doctrine as enunciated by the
California Supreme Court in California Dental Ass’n v. Am. Dental Ass’n, 590 P.2d 401
(Cal. 1979), and decline to consider ICTSI’s counterclaim for breach of fiduciary duty. In
California Dental, the state dental society expelled a member dentist after determining that the
PAGE 31 – OPINION AND ORDER

dentist had violated the ethics rules of both the state and the national society. Id. at 403. The
national society reversed the expulsion on appeal and refused to consider holding a rehearing. Id.
at 404. The state organization argued that the national organization’s refusal to consider the state
organization’s more stringent ethics code plainly contravenes the national organization’s bylaws.
Id. at 406. The California Supreme Court agreed, and held that:
We conclude that when a private voluntary organization plainly
contravenes the terms of its bylaws, the issues of whether and to
what extent judicial relief will be available depend on balancing
(1) the interest in protecting the aggrieved party’s rights against
(2) the infringement on the organization’s autonomy and the
burdens on the courts that will result from judicial attempts to
settle such internal disputes.
Id. at 403. The heart of the California Dental case was a dispute between a national society and
one of its local chapters as to whether the national organization’s conduct violated its own
bylaws. Rather than abstaining, the court in California Dental found that it did and ordered the
national society to reconsider the issue in light of the state organization’s higher ethical
principles. Id. at 408. In doing so, the court noted:
In many disputes in which such rights and duties [affecting internal
government and the management of a society’s affairs] and are at
issue, however, the courts may decline to exercise jurisdiction.
Their determination not to intervene reflects their judgment that
the resulting burdens on the judiciary outweigh the interests of the
parties at stake. One concern in such cases is that judicial attempts
to construe ritual or obscure rules and laws of private organizations
may lead the courts into what Professor Chafee called the “dismal
swamp.” Another is with preserving the autonomy of such
organizations. We [previously] stated . . . that “in adjudicating a
challenge to the society’s rule as arbitrary a court properly
exercises only a limited role of review. As the Arizona Supreme
Court observed . . . ‘In making such an inquiry, the court must
guard against unduly interfering with the Society’s autonomy by
substituting judicial judgment for that of the Society in an area
where the competence of the court does not equal that of the
Society . . . .’”
Id. at 405.
PAGE 32 – OPINION AND ORDER

The facts as alleged by ICTSI do not support application of the abstention doctrine
articulated in California Dental. First, PMA is an agent of ICTSI and negotiates binding, legal
agreements on behalf of ICTSI. California Dental and the other cases cited by PMA do not
involve situations where the voluntary association is acting as an agent of the member and
binding the member to legal contracts with third parties. Second, the resolution of ICTSI’s
breach of fiduciary duty counterclaim does not involve interpreting “ritual or obscure rules and
laws of private organizations.” Id. Third, ICTSI is not challenging an internal rule of PMA, and
the Court would not be unduly interfering with PMA’s autonomy by reaching the issue of
whether PMA breached its duties of good faith and fair representation. This is not a claim
relating to PMA’s internal government. Finally, the heart of ICTSI’s fiduciary duty counterclaim
is whether PMA acted fairly and in good faith in representing ICTSI at the May 2012 CLRC
meeting and other meetings and in dispatching workers to ICTSI and responding to ICTSI’s
complaints about dispatched workers. These are not areas where the Court’s competence does
not equal PMA’s competence. The Court does not find that any potential infringement of PMA’s
interest in autonomy outweighs ICTSI’s interest in having its rights and claims adjudicated. The
Court declines to abstain from considering ICTSI’s counterclaim for breach of fiduciary duty.
3. Section 301 and Garmon preemption do not apply
PMA also argues that the fiduciary duty counterclaim should be dismissed because it is
preempted by Section 301 of the LMRA and Garmon preemption.
a. Section 301 preemption
Section 301 of the LMRA preempts state law claims that are “substantially dependent on
analysis of a collective-bargaining agreement.” Burnside v. Kiewit Pac. Corp., 491 F.3d 1053,
1059 (9th Cir. 2007) (quoting Caterpillar Inc. v. Williams, 483 U.S. 386, 394 (1987)). To
determine whether a right conferred by state law is substantially dependent on the terms of a
PAGE 33 – OPINION AND ORDER

collective-bargaining agreement, a court should “decide whether the claim can be resolved by
looking to versus interpreting the [collective-bargaining agreement].” Id. at 1060 (citation and
quotation marks omitted). “If the latter, the claim is preempted; if the former, it is not.” Id.
As explained above, ICTSI’s adequately stated counterclaim for breach of fiduciary duty
rests on narrow allegations that PMA violated its fiduciary duties with respect to representing
ICTSI at the CLRC meeting, at other meetings and arbitrations, and in dispatching inefficient or
unqualified workers to ICTSI and failing properly to address ICTSI’s complaints about the
dispatched workers. PMA’s fiduciary duties to deal in good faith and fairly represent ICTSI, as
discussed above, arise under agency law and exist independent of PMA’s contractual obligations
under the PCLCD. Thus, the Court may consult the terms of the PCLCD to inform its analysis of
whether PMA dealt in good faith and fairly represented ICTSI, but the resolution of ICTSI’s
fiduciary duty counterclaim does not appear to depend on the Court’s interpretation of the
PCLCD.
With regard to ICTSI’s allegations that PMA failed to provide timely notice and fairly
represent ICTSI’s interests, that issue will likely primarily involve consideration of PMA’s
obligations under its Bylaws and general agency law, and only tangentially involve what the
PCLCD instructs regarding dispute resolution procedures. To the extent the Court looks to the
PCLCD, it would be just one consideration in determining whether PMA acted in good faith and
fairly represented ICTSI. Similarly, what the PCLCD instructs with respect to dispatching
workers from the hiring hall appears, at most, to be a minor consideration in evaluating whether
PMA acted in good faith in dispatching workers, addressing ICTSI’s complaints regarding those
workers, and refusing to appoint a hiring hall monitor. For example, the PCLCD may give PMA
broad discretion in dispatching workers, but if PMA exercised that discretion in bad faith, even if

PAGE 34 – OPINION AND ORDER

it is not a violation of the PCLCD, it could still be a violation of PMA’s fiduciary duty to
represent ICTSI in good faith.
The terms of the PCLCD are not dispositive of whether PMA dealt in good faith with
ICTSI in the alleged matters. Because the Court can resolve ICTSI’s fiduciary duty counterclaim
by looking to, but not interpreting, the terms of the PCLCD, the Court finds that ICTSI’s
fiduciary duty counterclaim is not substantially dependent on an analysis of the PCLCD. Thus,
PMA’s argument that ICTSI’s fiduciary duty counterclaim is preempted by Section 301 is
without merit.
b. Garmon preemption
Garmon preemption was first articulated in San Diego Bldg. Trades Council, Millmen’s
Union, Local 2020 v. Garmon, 359 U.S. 236, 238 (1959). Garmon preemption “prevents States
not only from setting forth standards of conduct inconsistent with the substantive requirements of
the NLRA but also from providing their own regulatory or judicial remedies for conduct
prohibited or arguably prohibited by the Act.” Wis. Dept. of Indus. v. Gould Inc., 475 U.S. 282,
286 (1986). A primary justification for the Garmon doctrine is “the need to avoid conflicting
rules of substantive law in the labor relations area and the desirability of leaving the development
of such rules to the administrative agency created by Congress for that purpose.” Vaca, 386 U.S.
at 180-81. The Garmon preemption doctrine is not applicable in cases involving alleged breaches
of the union’s duty of fair representation. Id. at 181.
As discussed above, the Court finds that ICTSI has adequately stated a counterclaim for
breach of fiduciary duty based on allegations that PMA violated its duties by: (1) failing to notify
ICTSI of the CLRC meeting and failing to fairly consider or present ICTSI’s position, or provide
ICTSI timely notice to present its own position; (2) failing to fairly consider or present ICTSI’s
position, or provide ICTSI timely notice to present its own position, to joint committees and
PAGE 35 – OPINION AND ORDER

arbitrators considering ILWU grievances regarding assignment of the reefer work; and (3)
causing the dispatch of inefficient or unregistered workers to ICTSI, failing to act on ICTSI’s
complaints regarding those workers, and failing to appoint a hiring hall monitor to prevent hiring
hall abuses. This alleged conduct, however, is not governed by the NLRA and is not prohibited
by that statute. The NLRA says little about multiemployer bargaining units, except to establish
that it is an unfair labor practice for a union to interfere with the employer’s selection of its
bargaining representative. 29 U.S.C. §158(b)(1)(B).
PMA argues that the conduct alleged in ICTSI’s fiduciary duty counterclaim is prohibited
the NLRA and that Garmon preemption therefore applies to the fiduciary duty counterclaim.
PMA argues that the alleged conduct is prohibited by section 8(a)(5) (which establishes that it is
an unfair labor practice for an employer to refuse to bargain collectively with a representative of
his employees), section 8(b)(3) (which establishes that it is an unfair labor practice for a labor
organization to refuse to bargain collectively with an employer), or section 8(e) (which
establishes that it is an unfair labor practice for a labor organization and employer to agree that
the employer will stop doing business with any other employer). The Court finds that the three
surviving allegations supporting ICTSI’s fiduciary duty counterclaim are not prohibited by these
section of the NLRA. The allegations do not involve a refusal by PMA or ILWU to bargain with
one another, nor an alleged agreement between PMA and ILWU to cease doing business with
another employer. Thus, Garmon preemption is not applicable.
Courts have also deferred to the NLRB in determining what constitutes impasse and
when an employer can permissibly withdraw from a multiemployer bargaining unit, but such
deferral is rooted in the NLRB’s expertise in impasse, appropriate conduct upon impasse, and
balancing pursuit of the national policy of promoting labor peace and collective bargaining.

PAGE 36 – OPINION AND ORDER

Bonanno, 454 U.S. at 414. There is, however, no such allegation in ICTSI’s fiduciary duty
counterclaim. Here, the breach of fiduciary duty allegations involve conduct between PMA and
ICTSI and duties owed by PMA to ICTSI.
As an additional consideration, the requirement of fair representation by unions is set
forth in the NLRA, and yet the Supreme Court has held that claims of unfair representation by a
union are not preempted by Garmon.17 Vaca, 386 U.S. at 181-86; see also Breininger v. Sheet
Metal Workers Int’l Ass’n Local Union No. 6, 493 U.S. 67, 74-76 (1989) (refusing to create an
exception to the Vaca rule that Garmon preemption does not apply to claims of unfair
representation). There is even less reason to extend Garmon preemption to claims of unfair
representation by a multiemployer group representative because the NLRA does not address
multiemployer representation in a similar manner as it does union representation, and the Court
will not so extend the doctrine. The alleged conduct is not governed by the NLRA and, therefore,
ICTSI’s claim against PMA for breach of fiduciary duty is not preempted by Garmon
preemption.
4. Stay of ICTSI’s Counterclaim Against PMA for Breach of Fiduciary Duty
Although ICTSI’s claim against PMA for breach of fiduciary duty is not dependent on an
interpretation of the PCLCD, it is related to the conduct by ILWU, alleged to be performed
jointly with PMA, that ICTSI and the Port allege are unfair labor practices. Whether the conduct
is an unfair labor practice may be evidence of and relevant to the question of PMA’s good or bad
faith. The issue of whether ILWU and PMA’s conduct constitutes an unfair labor practice is
before the NLRB, and there also are outstanding issues as to whether the NLRB has jurisdiction
17

Such claims may, however, be preempted by Section 301. See, e.g., Scott v. Machinists
Automotive Trades Dist. Lodge No. 190 of N. Cal., 827 F.2d 589, 591 (9th Cir. 1987). As
discussed above, Section 301 preemption does not apply to ICTSI’s breach of fiduciary duty
counterclaim.
PAGE 37 – OPINION AND ORDER

to consider the allegations to the extent they involve the Port. That issue is before the Ninth
Circuit. Accordingly, the Court stays ICTSI’s breach of fiduciary duty counterclaim against
PMA until after the jurisdictional issues of the NLRB are resolved and, if applicable, after the
NLRB decides whether the alleged conduct constitutes an unfair labor practice. Such a stay will
avoid the waste of duplicating efforts in more than one forum and avoid the possibility of
conflicting decisions in separate courts of appeal. Further, the Court may be able to rely on the
NLRB’s expertise in interpreting the NLRA when deciding whether certain conduct is or is not
an unfair labor practice, which may be relevant to ICTSI’s breach of fiduciary duty claim against
PMA.
C. The Port’s Tortious Interference Counterclaim Against Both PMA and ILWU
The Port asserts a counterclaim for tortious interference against both PMA and ILWU. To
state a claim for tortious interference with contract18 under Oregon law, a party
must allege each of the following elements: (1) the existence of a
professional or business relationship (which could include, e.g., a
contract or a prospective economic advantage), (2) intentional
interference with that relationship, (3) by a third party,
(4) accomplished through improper means or for an improper
purpose, (5) a causal effect between the interference and damage to
the economic relationship, and (6) damages.
McGanty v. Staudenraus, 901 P.2d 841, 844 (Or. 1995) (citations omitted).
PMA moves to dismiss the Port’s counterclaim for tortious interference with contract on
the grounds that it is preempted by Section 301 of the LMRA and, alternatively, that the Port did
not sufficiently plead the “improper means or improper purpose” element of tortious interference

18

Under Oregon law, tortious interference with contract is the tort of “intentional
interference with economic relations.” See Rotec Indus., Inc. v. Mitsubishi Corp., 348 F.3d 1116,
1122 (9th Cir. 2003).
PAGE 38 – OPINION AND ORDER

with contract. ILWU joins in this motion and additionally moves to dismiss the tortious
interference counterclaim against it as preempted by Section 303 of the LMRA.
1. The Port’s tortious interference counterclaim against ILWU is preempted by
Section 303 of the LMRA
Section 303(a) of the LMRA prohibits certain secondary boycott activities. 29 U.S.C.
§ 158(b)(4)(B); 29 U.S.C. § 187 (“[i]t shall be unlawful . . . in an industry or activity affecting
commerce, for any labor organization to engage in any activity or conduct defined as an unfair
labor practice in section 158(b)(4) of this title”). As relevant to this case, under
section 158(b)(4),19 it is an unfair labor practice for a labor organization or its agents:
(i) to engage in, or to induce or encourage any individual . . . to
engage in, a strike or a refusal in the course of his employment to
use, manufacture, process, transport, or otherwise handle or work
on any goods, articles, materials, or commodities or to perform any
services; or (ii) to threaten, coerce, or restrain any person engaged
in commerce or in an industry affecting commerce, where in either
case an object thereof is
***
(B) forcing or requiring any person to cease using, selling,
handling, transporting, or otherwise dealing in the products of any
other producer, processor, or manufacturer, or to cease doing
business with any other person . . . .
* * * [or]
(D) forcing or requiring any employer to assign particular work to
employees in a particular labor organization or in a particular
trade, craft, or class rather than to employees in another labor
organization or in another trade, craft, or class . . . .
29 U.S.C. § 158(b)(4).
In support of its tortious interference counterclaim, the Port alleges that PMA and ILWU:
(a) pressured, coerced, and threatened the Port to assign the reefer work to ILWU-represented
19

29 U.S.C. § 158 is commonly referred to as “Section 8” of the NLRA.

PAGE 39 – OPINION AND ORDER

employees; (b) pressured, coerced, and threatened ICTSI to assign the reefer work to ILWUrepresented employees; (c) coerced or induced carriers to bypass or threaten to bypass
Terminal 6 to pressure the Port to give up the reefer work; (d) coerced or induced carriers into
pressuring the Port to give up the reefer work; (e) threatened ICTSI with large fines or expulsion
from the PMA; (f) instituted and maintained litigation against ICTSI seeking to force ICTSI to
assign the reefer work to ILWU-represented employees; and (g) “encouraged” and “acquiesced
in” ILWU’s improper and illegal coercion of the Port to assign the reefer work to ILWUrepresented employees and failed to properly represent ICTSI in connection with ILWU-filed
grievances and work issues or permit ICTSI to protect its own interests. Port’s Am. Ans. and
Counterclaims (ECF 136) (“Port CC”) ¶¶ 69a-g. Although the Port does not distinguish which
conduct was allegedly engaged-in by ILWU and which by PMA, it is clear that allegations (e)
and (g) are not allegations by the Port of conduct committed by ILWU. With respect to
allegation (f), although ILWU is a plaintiff in this pending lawsuit, the Port does not allege
sufficient facts to show that the filing of this lawsuit was wrongful or otherwise improper.
The remaining alleged conduct on which the Port bases its tortious interference
counterclaim, allegations (a)-(d), allege that the ILWU pressured, coerced, and threatened the
Port and other businesses in an attempt to force the Port to give up the reefer work and ICTSI to
assign the reefer work to ILWU-represented workers. These are secondary boycott activities. The
Port appears to argue that this conduct is not preempted by Section 303 because it does not all
fall within the prohibition of Section 303. The Port points to some specific conduct that is not
considered an unfair labor practice, such as the CLRC decision in May 2012. The Port’s
argument fails for two reasons.

PAGE 40 – OPINION AND ORDER

First, the Court finds that the alleged conduct is governed by Section 303. Coercion and
threats to force the Port or ICTSI to assign the reefer work to ILWU members is covered by the
statute. Second, even if some sliver of specific conduct did not fall within the parameters of
Section 303’s covered labor practices, this would not prevent Section 303 preemption.
The type of conduct identified as an unfair labor practice and “made the subject of a
private damage action was considered by Congress, and [Section] 303(a) comprehensively and
with great particularity ‘describes and condemns specific union conduct directed to specific
objectives.’” Local 20, Teamsters, Chauffeurs & Helpers Union v. Morton, 377 U.S. 252, 258
(1964) (quoting Local 1976, United Bhd. of Carpenters and Joiners of Am. v. N.L.R.B., 357 U.S.
93, 98 (1958)). Congress selected “which forms of economic pressure should be prohibited by
[Section] 303,” striking a balance between the “uncontrolled power of management and labor”
by preserving labor’s right “to bring pressure to bear on offending employers” while “shielding
unoffending employers and others from pressures in controversies not their own.” Id. at 258-59
(quotation marks and citation omitted). Allowing labor to bring certain types of economic
pressure while prohibiting other types of economic pressure is a “weapon of self-help” that “is a
part of the balance struck by Congress between the conflicting interests of the union, the
employees, the employer and the community.” Id. at 259.
State law cannot “be applied to proscribe the same type of conduct which Congress
focused upon but did not proscribe when it enacted [Section] 303” because this would “frustrate
the congressional determination to leave this weapon of self-help available” and “upset the
balance of power between labor and management expressed in our national labor policy.” Id.
at 259-60. Although some alleged secondary activity may be “neither protected nor prohibited,”
it is still preempted by Section 303 because “[f]or a state to impinge on the area of labor combat

PAGE 41 – OPINION AND ORDER

designed to be free is quite as much an obstruction of federal policy” as a state allowing
prohibited conduct. Id. at 258, 260. “In short, this is an area of judicial decision within which the
policy of the law is so dominated by the sweep of federal statutes that legal relations which they
affect must be deemed governed by federal law having its source in those statutes, rather than by
local law.” Id. at 261 (quotation marks and citation omitted); see also San Antonio Cmty. Hosp.
v. S. Cal. Dist. Council of Carpenters, 125 F.3d 1230, 1235 (9th Cir. 1997) (“The interference
with prospective economic advantage and contractual rights claims are preempted by section 303
of the LMRA.”).
The Supreme Court has, however, carved out an exception to Section 303 preemption for
allegations “‘of conduct marked by violence and imminent threats to the public order.’” Local
20, 377 U.S. at 257 (citation omitted). State jurisdiction prevails in such situations because of the
“compelling state interest” of maintaining “domestic peace.” Garmon, 359 U.S. at 247. This
exception does not apply to the facts alleged by the Port. The Port does not allege ILWU
engaged in violence or imminent threats to the public order or other conduct that is the subject of
a compelling state interest outside of coercion and threats in a labor dispute. Accordingly, the
Port’s tortious interference counterclaim against ILWU is preempted by Section 303 and is
dismissed.
2. The Port fails to state a claim for tortious interference against PMA
The Port’s allegations of conduct allegedly giving rise to a tortious interference
counterclaim against PMA combines alleged conduct by PMA individually, PMA acting in
concert with ILWU, and PMA “encouraging” or “acquiescing in” ILWU’s wrongful conduct.
Port CC ¶ 69. The Port’s failure to specify which of the acts of allegedly wrongful conduct were
performed by PMA itself is grounds for dismissing the tortious interference counterclaim against
PMA. Even assuming, however, that all of the alleged wrongful conduct was engaged-in by
PAGE 42 – OPINION AND ORDER

PMA, the Port still fails to state a claim for tortious interference because it fails to sufficiently
allege improper purpose or improper means.
a. Improper purpose
Under a claim for tortious interference with contract, a defendant acts with improper
purpose if the defendant’s purpose was “to inflict injury on the plaintiff ‘as such.’” Nw. Natural
Gas Co. v. Chase Gardens, Inc., 982 P.2d 1117, 1124 (Or. 1999) (quoting Top Serv. Body Shop
v. Allstate Ins. Co., 582 P.2d 1365, 1371 (Or. 1978). “Generally, a defendant’s subjective
judgment as to its own business purposes will control.” Id. It is not improper for a defendant to
interfere with a contract in a manner “wholly consistent with [its] pursuit of its own business
purposes as it [sees] them.” Top Serv., 582 P.2d at 1372.
The Port does not allege that PMA’s purpose was to inflict injury on the Port. The Port’s
allegation of improper purpose is that PMA, with “full knowledge of the Port’s right to control
and assign the” reefer work, sought to require ICTSI to breach its obligations to the Port under
the Terminal 6 lease and “to misappropriate the [reefer work] so that ICTSI would perform the
services using ILWU labor.” Port CC at ¶ 67. Thus, as alleged, PMA’s purpose is to ensure that
ILWU-represented employees perform the reefer work, not to harm the Port. Additionally,
PMA’s purpose of ensuring that ILWU members perform the reefer work is wholly consistent
with PMA’s business purpose of enforcing its interpretations of its contracts. Thus, the Port has
not sufficiently alleged that PMA acted with improper purpose.
b. Improper means
Under Oregon law, to constitute improper means conduct “must violate some objective,
identifiable standard, such as a statute or other regulation, or a recognized rule of common law,
or, perhaps, an established standard of a trade or profession.” Nw. Nat’l, 982 P.3d at 1124.
Improper means include “violence, threats or other intimidation, deceit or misrepresentation,
PAGE 43 – OPINION AND ORDER

bribery, unfounded litigation, defamation, or disparaging falsehood.” Top Serv., 582 P.2d at 1371
n.11. In applying this standard to the Port’s allegations, the Port fails to allege sufficient facts
that PMA used “improper means.”
The Port’s allegations (a) through (d) are that PMA pressured, coerced, or threatened
various businesses in order to force ICTSI to assign the reefer work to ILWU members. The Port
uses the conclusory term “threatened,” but does not allege any facts relating to the alleged
“threat.” If PMA threatened violence or property destruction, that would fall within Oregon’s
definition of improper means, but the Port makes no such allegation. It appears that the Port is
alleging threats and coercion by economic pressure. This is similar to allegation (e), which
alleges that PMA threatened ICTSI with fines or expulsion. Oregon, however, has not accepted
economic pressure as a type of “improper means.”
The Port cites to Scutti Enters., LLC v. Park Place Entm’t Corp., 322 F.3d 211 (2d
Cir. 2003), to support the Port’s argument that economic pressure may constitute improper
means. Scutti, however, applied New York law, which defines improper means as “representing
‘physical violence, fraud or misrepresentation, civil suits and criminal prosecutions, and some
degrees of economic pressure.’” Id. at 216 (quoting NBT Bancorp Inc. v. Fleet/Norstar Fin.
Grp., 664 N.E.2d 492, 497 (N.Y. 1996)). Oregon, unlike New York, however, has not defined
improper means to include some degrees of economic pressure. In Oregon’s seminal case
defining improper means, Top Service, the Oregon Supreme Court, after explaining that
improper means requires a violation of a statute, regulation, recognized rule of common law, and
perhaps an established standard of a trade or profession, noted that “violence, threats or other
intimidation, deceit or misrepresentation, bribery, unfounded litigation, defamation, or
disparaging falsehood” are examples of improper means. Top Serv., 582 P.2d at 1371 n.11. This

PAGE 44 – OPINION AND ORDER

list of wrongful conduct was gleaned from the Restatement (Second) of Torts, Tent. Draft No. 23
§§ 766 and 767. Notably absent from Top Services’s list of improper means, however, is
economic pressure, even though economic pressure was specifically included as another type of
improper means in the draft Restatement that was relied upon by the Oregon Supreme Court.
Indeed, the only improper means listed in the draft Restatement that the Oregon Supreme Court
did not include was economic pressure.
Further, analyzing whether economic pressure is an improper means requires a balancing
test, considering the circumstances in which the pressure is exerted, the objective of the pressure,
the degree of coercion, the extent of harm that it threatens, the effect upon neutral parties and
competition, and the general reasonableness of the pressure. Restatement (Second) of Torts
§ 767 cmt. c.20 This analysis is antithetical to the “objective” standard under Oregon law. Indeed,
Top Service specifically noted that there are “difficulties inherent in ‘balancing’ as an approach
to individual cases” in the context of tortious interference. Top Serv., 582 P.2d at 1371 n.12.
Accordingly, the Court will not expand Oregon’s definition of improper means to include
economic pressure. Allegations (a) through (e), which allege that PMA threatened, pressured, or
coerced the Port and other businesses with economic pressure, are thus insufficient to state a
claim of tortious interference.
The Port’s allegation that PMA engaged in litigation to force ICTSI to assign the reefer
work to ILWU members (allegation (f)) is also insufficient to state a claim for tortious
interference. Wrongfully instituting litigation may support a claim for tortious interference, but
the Port does not allege sufficient facts from which the Court can reasonably infer that the two
lawsuits initiated by PMA were sham lawsuits, were filed without regard to merit, or were
20

The balancing test approach of the Restatement (Second) of Torts remains unchanged
from Draft No. 23 relied upon by the Oregon Supreme Court in Top Service.
PAGE 45 – OPINION AND ORDER

otherwise unfounded. As discussed above, PMA succeeded at summary judgment in one lawsuit,
which negates an argument that it was a wrongfully instituted, sham, or unfounded.
The Port’s final allegation (allegation (g)) is that PMA “encouraged” or “acquiesced” to
ILWU’s wrongful conduct and that PMA failed properly to represent ICTSI. These are not
violations of an “objective, identifiable standard[]” that can support a claim for tortious
interference. Northwest Nat’l, 982 P.3d at 1124.
“Acquiesce” means to “accept tacitly or passively; to give implied consent.” Black’s Law
Dictionary 26 (9th ed. 2009). The Port does not allege that PMA had a duty to speak out against
ILWU’s alleged conduct and that by remaining silent PMA violated a statute, regulation, or rule
of common law. Thus, the Port fails to allege facts from which it can reasonably be inferred that
PMA’s “acquiescence” constituted improper means.
To the extent the Port is attempting to plead that PMA was jointly liable for ILWU’s
tortious conduct by “encouraging” ILWU, thus rendering PMA’s conduct wrongful, the Port
must plead sufficient facts from which an underlying tort by ILWU and joint liability by PMA
can be inferred. Under Oregon law, joint liability requires pleading sufficient facts from which it
can reasonably be inferred that PMA (1) performed a tortious act in concert with or pursuant to a
common design with ILWU; (2) knew that ILWU’s conduct constituted a breach of duty and
gave ILWU substantial assistance or encouragement; or (3) gave substantial assistance to ILWU
in accomplishing a tortious result and PMA’s own conduct, separately, constitutes a breach of
duty to the Port. Granewich v. Harding, 985 P.2d 788, 792 (Or. 1999). The conclusory allegation
that PMA “encouraged” ILWU’s “improper and illegal conduct” is insufficient. Port CC ¶ 69g.
Finally, the allegation that PMA did not properly represent ICTSI in response to ILWU
grievances and work actions does not sufficiently state a claim for tortious interference with the

PAGE 46 – OPINION AND ORDER

Port’s economic relationship with ICTSI. The Court interprets the Port’s allegation and argument
to be that PMA breached its fiduciary duty to ICTSI, thereby rendering PMA’s conduct wrongful
and supporting a claim for tortious interference by the Port. Whether PMA may have violated its
fiduciary duty to ICTSI, however, is a claim for ICTSI to bring against PMA, which ICTSI has
done. The Court is unaware of, and the Port does not identify, any Oregon appellate case that
holds that a breach of fiduciary duty constitutes improper means for purposes of stating a claim
for tortious interference by a third party.
There are other jurisdictions that accept a breach of fiduciary duty as “improper means,”
but they are jurisdictions that also recognize that economic pressure may constitute improper
means. See, e.g., Hannex Corp. v. GMI, Inc., 140 F.3d 194, 206 (2d Cir. 1998) (noting that
breach of fiduciary duty constitutes wrongful means; applying New York law, which recognizes
that applying economic pressure may constitute wrongful means); Harris Group, Inc. v.
Robinson, 209 P.3d 1188, 1200 (Col. App. 2009) (same, applying Colorado law). Given the fact
that Oregon has not accepted economic pressure as improper means and focuses on an objective
standard, the Court will not expand the concept of improper means under Oregon tort law.
Additionally, in those jurisdictions that have accepted a breach of fiduciary duty as
“improper means,” the fiduciary duty breached is a duty owed to the plaintiff. Id. That is not the
situation alleged by the Port. The Port alleges that PMA breached its fiduciary duty owed to
ICTSI, not that PMA breached any such duty owed to the Port or caused ICTSI to breach any
fiduciary duty owed to the Port. For all of these reasons, the Port fails adequately to state a claim
against PMA for tortious interference.
3. Section 301 preemption
Because the Court finds that the Port fails to state a claim against PMA or ILWU for
tortious interference, the Court does not reach the issue of Section 301 preemption.
PAGE 47 – OPINION AND ORDER

CONCLUSION
PMA’s motion to dismiss ICTSI’s antitrust and breach of fiduciary duty counterclaims
(ECF 131), joined in part by ILWU (ECF 133), is granted in part and denied in part. ICTSI’s
antitrust counterclaim against both PMA and ILWU is dismissed. ICTSI’s counterclaim against
PMA for breach of fiduciary duty is not dismissed, but that counterclaim is stayed. PMA and
ILWU’s motions to dismiss the Port’s counterclaim for tortious interference (ECF 138 and 146)
are granted, and the Port’s tortious interference counterclaim is dismissed.
IT IS SO ORDERED.
DATED this 24th day of March 2014.

/s/ Michael H. Simon
Michael H. Simon
United States District Judge

PAGE 48 – OPINION AND ORDER