Antitrust Law Daily Wrap Up, ANTITRUST—D. Ore.: Terminal operator failed to state antitrust counterclaims against labor union for alleged monopoly of freight business, (Mar 25, 2014)

By Linda O’Brien, J.D., LL.M.

In a labor dispute over who was entitled to perform certain work regarding refrigerated shipping containers at a terminal leased from a port authority, a terminal operator failed to state federal antitrust counterclaims against a labor union and a multiemployer collective bargaining association for allegedly engaging in a conspiracy to exclude competition from the business of loading and unloading freight in violation of the Sections 1 and 2 of the Sherman Act, the federal district court in Portland has decided (International Longshore and Warehouse Union v. ICTSI Oregon, Inc., March 24, 2014, Simon, M.).

The International Longshore and Warehouse Union (ILWU) is a labor union that represents longshore workers employed by waterfront companies who are members of the Pacific Maritime Association (PMA), a multiemployer collective bargaining association. The Port of Portland is the port district responsible for overseeing aviation and marine activities in the Portland metropolitan area. In 2008, the ILWU and PMA negotiated a collective bargaining agreement that provided that maintenance and repair work at Port-owned terminals would be performed by ILWU-represented employees.

In 2011, ICTSI Oregon, Inc. signed a lease with the Port of Portland to operate a container facility at one of its terminals. Under the lease, certain work regarding refrigerated shipping containers (“reefer work”) would be performed by employees represented by the International Brotherhood of Electrical Workers Local 48 (IBEW). The Port was not a member of the PMA and was not bound by the terms of the collective bargaining agreement. The ILWU and PMA filed suit against ICTSI, contending that ICTSI, as the terminal operator and member of PMA, must assign the work to ILWU members. The Port of Portland and IBEW intervened and contended that the reefer work must be assigned to IBEW members. ICTSI asserted counterclaims against ILWU and PMA under federal antitrust laws. ILWU and PMA moved to dismiss.

Noerr-Pennington doctrine. The court found that the doctrine immunized the federal lawsuits filed by ILWU and PMA from antitrust scrutiny. The Noerr-Pennington doctrine provides broad antitrust protection for private parties against antitrust liability based on the petitioning of government entities. An exception to the immunity arises when parties institute sham proceedings without probable cause or merit. ICTSI based its antitrust counterclaim on ILWU and PMA’s filing of a second suit challenging a National Labor Relations Board (NLRB) ruling that ILWU engaged in unfair labor practices. ICTSI failed to sufficiently allege facts to reasonably infer that the filing of the two suits was a sham. The court noted that PMA prevailed on summary judgment in the second case, which prohibited application of the sham exception.

Statutory labor exemption. Certain activities by organized labor are given a statutory exemption from federal antitrust laws as long as the union acts in its own legitimate self-interest and does not combine with nonlabor groups. ICTSI alleged that ILWU engaged in unfair labor practices in an attempt to force it to assign the reefer work to ILWU workers. ICTSI did not allege that ILWU and PMA conspired to engage in such conduct. According to the court, the alleged work stoppages, slowdowns, and filing of grievances by ILWU were traditional union activities that were done in furtherance of preserving union jobs. Since the activities were done in furtherance of ILWU’s legitimate self-interest, and not done in concert with a nonlabor group, they were exempt from federal antitrust law.

Nonstatutory labor exemption. The court found that the nonstatutory labor exemption applied to the 2008 collective bargaining agreement negotiated by ILWU and PMA. Certain union-employer agreements, such as collective bargaining agreements, that are provided a limited nonstatutory exemption from antitrust liability. ICTSI alleged that ILWU and PMA, individually and together, engaged in various activities to enforce their interpretation of the 2008 agreement. The court noted that the restraint in the agreement that the reefer work must be assigned to ILWU members was binding only on parties to the agreement. ICTSI’s allegation that it could not benefit from an exemption of the restraint since it joined PMA after the agreement was negotiated also did not give rise to antitrust liability.

Additionally, the requirement for the assignment of reefer work related to job preservation and was a proper subject of collective bargaining. ICTSI did not allege that the agreement was not the result of bona fide, arms-length collective bargaining, the court noted.

Monopolization. Finally, ICTSI failed to state a claim for monopolization, attempted monopolization, or conspiracy to monopolize. ICTSI alleged that ILWU and PMA jointly possessed the means to exclude competition within the relevant market. However, ICTSI did not allege they conspired to create a monopoly for any single or group of PMA members. PMA was not a competitor itself in the relevant market and ICTSI made no allegations that any one member or small group of PMA members had or could obtain monopoly power, the court concluded.

The case is No. 3:12-cv-01058-SI.

Attorneys: Robert S. Remar (Leonard Carder, LLP) and Robert H. Lavitt (Schwerin, Campbell, Barnard, Iglitzin & Lavitt LLP) for International Longshore and Warehouse Union and International Longshore and Warehouse Union Locals 8 and 40. Jeffrey P. Chicoine (Miller Nash LLP) and Clifford D. Sethness (Morgan, Lewis & Bockius LLP) for Pacific Maritime Association. Michael T. Garone (Schwabe, Williamson & Wyatt, PC) for ICTSI Oregon, Inc. Randolph C. Foster, Stoel Rives LLP) and Kathy Ann Peck (Williams, Zografos & Peck PC) for Port of Portland. Norman D. Malbin for IBEW Local 48.

Companies: International Longshore and Warehouse Union; Pacific Maritime Association; ICTSI Oregon, Inc.; International Brotherhood of Electrical Workers

Cases: Antitrust OregonNews