Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

International Longshore and Warehouse Union v. Port of Portland

United States District Court, D. Oregon

April 3, 2014

PORT OF PORTLAND, COMMISSIONERS OF THE PORT OF PORTLAND, in their individual and official capacities, and BILL WYATT, in his official capacity, Defendants.

Robert S. Remar, Eleanor I. Morton, and Emily M. Maglio, LEONARD CARDER LLP, Robert H. Lavitt, SCHWERIN CAMPBELL BARNARD IGLITZIN & LAVITT LLP, Of Attorneys for Plaintiff.

Randolph C. Foster, Jeremy D. Sacks, Nathan C. Brunette, STOEL RIVES LLP, 900 S.W. Fifth Avenue, Suite 2600, Portland, OR 97204. Of Attorneys for Defendants Port of Portland, Commissioners of the Port of Portland, and Bill Wyatt.

Gregory J. Miner, BATEMAN SEIDEL MINER BLOMGREN CHELLIS & GRAM, PC, Of Attorney for Defendant Commissioner Bruce A. Holte.


MICHAEL H. SIMON, District Judge.

Plaintiff International Longshore and Warehouse Union ("ILWU") brought this lawsuit against Defendants Port of Portland (the "Port"), the Commissioners of the Port of Portland, in their individual and official capacities (the "Commissioners"), and Bill Wyatt, in his official capacity as Executive Director of the Port (collectively, "Defendants" or "the Port").[1] On April 8, 2013, the Court dismissed with prejudice ILWU's first claim for relief, which alleged a violation of 42 U.S.C. § 1983. ECF 42. The Court deferred ruling on Defendants' Motion to Dismiss and Alternative Motion for Summary Judgment relating to ILWU's second claim for relief, which alleges a violation of Article XI, § 9 of the Oregon Constitution. Id. Before the Court are the parties' cross-motions for summary judgment relating to ILWU's claim under Article XI, § 9 of the Oregon Constitution (ECF 21, 49), ILWU's Motion for Leave to File a Second Amended Complaint (ECF 47), and ILWU's Motion to Strike Robert Burket's Clarification Declaration (ECF 48).

For the reasons discussed below, the Court grants Defendants' Motion for Summary Judgment (ECF 21), denies ILWU's Motion for Summary Judgment (ECF 49), denies ILWU's motion to Strike Robert Burket's Clarification Declaration (ECF 48), and denies as moot ILWU's Motion for Leave to File a Second Amended Complaint to add a claim for prevailing plaintiff attorney's fees (ECF 47).


A party is entitled to summary judgment if the "movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The moving party has the burden of establishing the absence of a genuine dispute of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The court must view the evidence in the light most favorable to the non-movant and draw all reasonable inferences in the non-movant's favor. Clicks Billiards Inc. v. Sixshooters Inc., 251 F.3d 1252, 1257 (9th Cir. 2001). Although "[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge... ruling on a motion for summary judgment, " the "mere existence of a scintilla of evidence in support of the plaintiff's position [is] insufficient...." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 255 (1986). "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citation and quotation marks omitted).

Where parties file cross-motions for summary judgment, the court "evaluate[s] each motion separately, giving the non-moving party in each instance the benefit of all reasonable inferences." A.C.L.U. of Nev. v. City of Las Vegas, 466 F.3d 784, 790-91 (9th Cir. 2006); see also Pintos v. Pac. Creditors Ass'n, 605 F.3d 665, 674 (9th Cir. 2010) ("Cross-motions for summary judgment are evaluated separately under [the] same standard."). In evaluating the motions, "the court must consider each party's evidence, regardless under which motion the evidence is offered." Las Vegas Sands, LLC v. Nehme, 632 F.3d 526, 532 (9th Cir. 2011). "Where the non-moving party bears the burden of proof at trial, the moving party need only prove that there is an absence of evidence to support the non-moving party's case." In re Oracle Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir. 2010). Thereafter, the non-moving party bears the burden of designating "specific facts demonstrating the existence of genuine issues for trial." Id. "This burden is not a light one." Id. The Supreme Court has directed that in such a situation, the non-moving party must do more than raise a "metaphysical doubt" as to the material facts at issue. Matsushita, 475 U.S. at 586.


The Port and ICTSI Oregon, Inc. ("ICTSI") are parties to a 25-year lease (the "Lease Agreement") under which ICTSI performs certain operations and administers certain facilities at Terminal 6 of the Port of Portland. ILWU represents employees working for ICTSI at Terminal 6. After a labor dispute arose in the spring of 2012, the Port implemented two programs to keep containerized goods flowing through, and certain shipping companies (the "Carriers") calling on, Terminal 6. These two programs are the Carrier Program and the Rent Program (collectively, the "2012 Programs"). The Port also continued certain aspects of the 2012 Programs into 2013 (collectively, the "2013 Programs").

A. The 2012 Programs

The Port's Carrier Program was the result of a "measurable and substantial decrease in both vessel and gate productivity" beginning in June 2012. Pl.'s Ex. F, ECF 51-9 at 57.[2] The 2012 Carrier Program offered tailored financial incentives to individual Carriers for a period commencing on June 21, 2012 and ending on July 24, 2012. Pl.'s Ex. F, ECF 51-9 at 40-47; Second Foster Decl. Ex. 5, Dep. Tr. of Bill Wyatt ("Wyatt Dep.") at 49:15-50:4, ECF 61-1 at 70. The Port's fiscal year runs from July 1 through June 30. Under the 2012 Carrier Program, the Port made three payments in August 2012, totaling $175, 000, each of which was accrued and recorded in the Port's fiscal year that began on July 1, 2012, and ended on June 30, 2013. Schultz Decl. Ex. 1, ECF 59 at 7-8, 10.

The Port also implemented the 2012 Rent Program, which the Port Commission adopted on August 8, 2012. First Thompson Decl. Ex. 6, ECF 25-3 at 19-24. Mr. Wyatt described the motivation for the Rent Program as follows:

The Rent Program was developed in 2012 and it was essentially an effort by the Port to share in what were the considerable losses being incurred by ICTSI as a result of the intentional slowdown and the resulting productivity creating a tremendous loss for ICTSI. And so we were, frankly, very concerned that their business was threat [ sic ]-they might close their doors, and so we developed this cost sharing program to at least do what we could to help mitigate this prospect.

Wyatt Dep. at 9:13-10:6, ECF 61-1 at 61. The Port authorized the Rent Program at "an amount not to exceed $4, 664, 356, " with the funding coming from the Port's General Fund. Pl.'s Ex. F, ECF 51-8 at 56-57. Mr. Wyatt explained that the cost of the 2012 Rent Program was based on "the amount of the annual rent payment from ICTSI to the Port of Portland" and that the Port would use the rent ICTSI paid to the Port to "manage this reimbursement program." Id. at 64.

The 2012 Rent Program agreement between the Port and ICTSI took effect on August 8, 2012, and was scheduled to terminate on the earlier of: (i) the date on which the Port had paid the maximum amount of $4, 664, 356; (ii) December 31, 2012; or (iii) the date of the occurrence of a default by ICTSI as defined in the Lease Agreement. Id. at 72. The actual payments to ICTSI under the 2012 Rent Program totaled $2, 688, 672. Schultz Decl. Ex. 1, ECF 59 at 7, 9, 10; Second Foster Decl. Ex. 14, ECF 61-4 at 70.

The Port maintained that "property taxes would not be used in the cost sharing program [the 2012 Rent Program]." Wyatt Dep. at 20:17-20, ECF 61-1 at 63. Mr. Wyatt articulated this position to the Port Commissioners before their approval of the 2012 Rent Program on August 8, 2012. Pl.'s Ex. F, ECF 51-8 at 64 (explaining that tax money will not be used to fund the program). The Port also required that ICTSI sign a Supplemental Agreement on October 26, 2012, confirming that tax revenues would not be used to support or finance the 2012 Rent Program and that only ICTSI's annual rent payments would be used to finance the 2012 Rent Program and expressly waiving any right by ICTSI to make any claim under the 2012 Rent Program against the Port's tax revenues. First Thompson Decl. Ex. 10, ECF 25-3 at 41-43.

B. The 2013 Programs

Because of the ongoing economic effect of the labor dispute that began in 2012, the Port developed two additional programs to assist ICTSI in managing its increased operational costs. The Port again implemented a two-fold approach: the 2013 Carrier Program and the 2013 Rent Program. These 2013 Programs were based on concerns that Carriers were considering no longer stopping at the Port and, if that happened, shippers then would have to reroute their cargo through other ports. Wyatt Dep., ECF 61-1 at 49.

On January 9, 2013, the Port approved the 2013 Carrier Program. That program was similar to the 2012 Carrier Program and designed to "help induce the carriers to continue calling on Terminal 6." Wyatt Dep. at 49:16-50:14, ECF 61-1 at 70. The terms of the 2013 Carrier Program, however, offered a different incentive structure. The Port offered a "per container incentive payment [of ten dollars] to calling carriers in a not-to-exceed program amount of $1, 000, 000 over a period ending December 31, 2013." Foster Decl. Ex. 14, ECF 61-4 at 11. Under the 2013 Carrier Program, the "carrier incentive payments would be paid out of rent received from ICTSI during 2012 and 2013 under the Terminal 6 Lease." Id.; see also id. at 12 (stating that the "source of funds for this program will come from non-tax revenues of the Port").

Under the individual agreements with each participant, the Carriers "expressly disclaim[ed] and waiv[ed] any and all right to make a claim against the Port's tax revenues to satisfy any of the Port's obligations in any way arising out of the [2013 Carrier] Program." Second Thompson Decl. Exs. 2-8, ECF 60 at 2-29. As of October 31, 2013, the total payments made under the 2013 Carrier Program amounted to $631, 620, which was distributed among six participating Carriers. Schultz Decl. Ex. 1, ECF 59 at 7, 9-10.

On February 13, 2013, the Port approved the 2013 Rent Program. Foster Decl. Ex. 13, ECF 61-3 at 136. The "sole source of funding" approved by the Port for the 2013 Rent Program was the "Annual Rent payments paid to the Port from ICTSI under the Terminal 6 Lease Agreement." Id. The Port's 2013 Rent Program provided that "[n]one of the Port's tax revenues will be used to fund the rebate payments and ICTSI expressly disclaims any right to any Port tax revenues to satisfy the Port's rebate obligations under the Rent Rebate Agreement." Id.

The Port also entered into an agreement with ICTSI related to ICTSI's annual payments to the Port (the "2013 Rent Program"). The 2013 Rent Program between the Port and ICTSI was scheduled to terminate on December 31, 2013, subject to any earlier termination contingency. Id. The 2013 Rent Program further provided that the Port would make payments to ICTSI of $308, 333 per month (the "Rebate Payments") for each calendar month during 2013 and not to exceed $3, 700, 000. Foster Decl. Ex. 17, ECF 61-5 at 49. The source of funding for the Rebate Payments would be the "Annual Rent payments paid to the Port from ICTSI under the Lease, " and "[n]one of the Port's tax revenues [would] be used to fund the Rebate Payments." Id.

As with the October 26, 2012 Supplemental Agreement, ICTSI agreed that tax revenues would not be used to support or finance the 2013 Rent Program and that only ICTSI's annual rent payments would be used to finance the 2013 Rent Program; ICTSI also expressly waived any rights to make any claim under the 2013 Rent Program against the Port's tax revenues. Id. In July 2013, ICTSI made its required Annual Rent payment of $4, 733, 104. Wyatt Dep. at 55:4-13, ECF 61-1 at 71; Schultz Decl. Ex. 1, ECF 59 at 7, 9. As of October 31, 2013, the Port had spent a total of $2, 560, 397 on the 2013 Rent Program. Schultz Decl. Ex. 1, ECF 59 at 7, 9, 11.

C. The Port's Financial Management Systems

The Port uses internal financial management systems to administer its fiscal policies. Relevant to this dispute, the Port has two primary bank accounts. The first account is the Local Government Investment Pool Account ("LGIP Account"), from which the Port receives property taxes that are collected by local governments on the Port's behalf. Maglio Decl. Ex. C, Dep. Tr. of Robert Burket ("Burket Dep.") at 48:19-25, ECF 51-3 at 26. The second account is maintained at Wells Fargo, where the Port keeps its primary bank account (the "General Fund"). Id. at 31:19-25, ECF 51-3 at 15. The parties agree that the expenses for the Programs were paid from the Port's General Fund, and specifically from the Port's Marine Division. Id. at 37:6-38:2, ECF 51-3 at 18-19. The parties also agree that funds from the LGIP Account are regularly transferred into the General Fund to be dispersed and allocated by the Port. Id. at 90:3-91:1, ECF 51-3 at 40-41.

The parties disagree over how to characterize or describe how the General Fund functions under the Port's financial management systems. The Port argues that it created and maintained two relevant accounting processes to manage its revenues: first, the Port uses internal tracking processes to divide the General Fund into separate "buckets" properly to account for tax revenues; and second, the Port has a formal accounting process whereby tax revenues within the General Fund are kept separate from non-tax revenues.

With regard to the internal tracking processes, the Port segregates the General Fund into four primary "buckets, " consisting of: (1) the Strategic Fund; (2) the Coverage Fund; (3) the Investment Fund; and (4) the T6 Fund. Second Foster Decl. Ex. 7 ("Overview of Fund Sources and Uses"), ECF 61-2 at 3. At issue in this lawsuit is the Port's fiscal management of the Coverage Fund and the T6 Fund. Second Foster Decl. Ex. 4 ("Schultz Dep.") at 26:18-33:17, ECF 61-1 at 44-46. The Coverage Fund receives its funding from property taxes and operating income before depreciation. Second Foster Decl. Ex. 7, ECF 61-2 at 3. The Coverage Fund is used for debt service, capital leases, capital investments that cannot earn a financial return ( i.e., asset maintenance), and to make up for investment return deficits in the Investment Fund. Id. The sole sources of funding for the T6 Fund are the initial ICTSI closing payment for the Lease Agreement and ongoing lease revenues from ICTSI. Id. The T6 Fund is dedicated to capital obligations related to the Lease Agreement, the Carrier Programs, and the Rent Programs. Id. The Port argues that its financial records for the T6 Fund and Coverage Fund conclusively demonstrate that no property taxes were directed toward or were used to finance the Programs.

In addition to these tracking procedures, the Port implemented a formal accounting procedure to segregate tax revenues. This system is based on the Port's financial management tracking by operating division. The Port has two primary divisions: (1) General Port Operations, and (2) Aviation. Burket Decl. Ex. 5, ECF 58-3 at 31. Within General Port Operations, there are several subdivisions or operational units, including Marine & Industrial Development (the "Marine Division"). Id. at 3-31. Separate from the Port's operating fund (the General Fund), the Port tracks "Construction Funds, " including the Port's Bond Construction Fund. Id. The Bond Construction Fund "accounts for the acquisition, construction, expansion, and improvement of new and existing structures and facilities. Its resources are generated from property taxes, transfers from the General Fund and Airport Revenue Fund, and interests on investments." Id. at 69. In November 2012, the Port assigned all property tax revenue to the Bond Construction Fund, which "exists both in the Port's budget and in its accounting systems." Burket Decl., ECF 58 at 6 ¶ 14. This decision was made retroactive to July 1, 2012, the first day of the Port's 2012-2013 fiscal year. Id. at 7 ¶ 15. "The assignment and allocation of all the Port's property tax revenue to the Bond Construction Fund has been maintained in the current fiscal year budget and in the Port's accounting systems." Id. at 8 ¶ 15. The Port argues that this formal segregation of funds indicates that all funding for the Programs is documented as being from the Marine Division and that tax revenues were kept separate in the Bond Construction Fund. Id. at 8 ¶ 16.

ILWU contends that funds transferred from the LGIP Account into the General Fund are comingled, such that there is no way to distinguish between property taxes and non-tax revenues. Maglio Decl. Ex. A (Report by ILWU's accounting expert, Vanessa J. Hill, "Hill Report"), ECF 51-1 at 17-20, 54 at 2. ILWU further argues that even if the Port properly segregated its funds, the Port lacked sufficient operating income to guarantee that non-tax revenues would provide the entire funding source for the Programs. Id. ILWU also argues that the T6 Fund is not in the Port's accounting records, not subject to written guidelines, not intended to fund noncapital expenditures, not administered or calculated consistently, and not completely segregated from property taxes. Id. at 28. Finally, ILWU argues that any separate agreement or disclaimer between ICTSI or the Carriers, on the one hand, and the Port, on the other, does not guarantee that property taxes were not used and will not be used in the future to finance the Programs. Id. at 27.


A. Evidentiary Objections

ILWU moves to strike the corrections submitted by the Port to the deposition testimony of Robert A. Burket. In addition, ILWU raises an evidentiary objection challenging the Port's audited financial statements for its fiscal year ending on June 30, 2013. Each issue is addressed in turn.

1. Motion to Strike

ILWU moves to strike the deposition corrections of Mr. Burket, arguing that the deposition corrections violated Federal Rule of Civil Procedure 30(e) ("Rule 30(e)") and that the corrections are a "sham" meant to create an issue of fact for summary judgment. The Port responds that Mr. Burket's deposition corrections are consistent with his testimony and that striking the ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.