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

United States District Court, D. Oregon

April 17, 2019

ICTSI OREGON, INC., Plaintiff,
v.
INTERNATIONAL LONGSHORE AND WAREHOUSE UNION; INTERNATIONAL LONGSHORE AND WAREHOUSE UNION Local 8; and INTERNATIONAL LONGSHORE AND WAREHOUSE UNION Local 40, Defendants.

          OPINION AND ORDER ON MOTIONS IN LIMINE

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

         ICTSI Oregon, Inc. (“ICTSI”) brings the sole remaining claim in this case against International Longshore and Warehouse Union (“ILWU”) and International Longshore and Warehouse Union Local 8 (“Local 8”) (collectively, “ILWU Entities”).[1] ICTSI alleges that the ILWU Entities engaged in illegal secondary boycott activities, violating § 303 of the Labor-Management Relations Act, 29 U.S.C. § 187. Specifically, ICTSI alleges that the ILWU Entities engaged in work stoppages, slowdowns, safety gimmicks, and other coercive actions with an object of compelling ICTSI to pressure the Port of Portland (the “Port”) to relinquish control to ICTSI over jobs at Terminal 6 of the Port that involve the plugging, unplugging, and monitoring of refrigerated containers. This Opinion and Order addresses the parties' remaining motions in limine.[2]

         1. ICTSI's Motions in Limine (ECF 385)

         a. Motion No. 1: Evidence and argument disputing that the ILWU Entities violated § 187 or had motives other than the reefer dispute, when previously adjudicated. GRANTED IN PART.

         ICTSI moves to exclude evidence and argument that the ILWU Entities did not violate § 187 or that the work stoppages and slowdowns from May 21, 2012, through August 13, 2013, were motivated by anything other than the illegal secondary purpose of obtaining the reefer work. For this time period, the Court has already determined in its Opinion and Order resolving ICTSI's motion for partial summary judgment that issue preclusion applies with respect to the ILWU Entities' violation of § 187(a) and motivation for the work stoppages and slowdowns. Int'l Longshore & Warehouse Union v. ICTSI Oregon, Inc. (“ILWU II”), 2019 WL 267714, at *7-11 (D. Or. Jan. 17, 2019).

         The ILWU Entities respond that they should be permitted to argue that their motives after August 13, 2013 were something other than to obtain the reefer jobs, but this argument is irrelevant to ICTSI's motion in limine, which involves only the time period from between May 21, 2012 through August 13, 2013. The ILWU Entities also argue that they should be allowed to present evidence and argument that factors other than the work stoppages and slowdowns caused ICTSI's damages, but again that is irrelevant to ICTSI's motion in limine, which is narrow in scope and only involves evidence and argument disputing that the ILWU Entities violated § 187 during the adjudicated periods or disputing the motivation of the work stoppages and slowdowns from May 21, 2012 through August 13, 2013. The ILWU Entities also argue that although the reefer dispute “substantially” motivated their conduct during the adjudicated period, this fact does not mean that the ILWU Entities cannot argue that other motives were also present during that timeframe.

         The Court previously ruled that issue preclusion applies with respect to the previously-adjudicated period of May 21, 2012 through August 13, 2013. The Court held that based on issue preclusion, ILWU and Local 8 violated 29 U.S.C. § 187(a) from May 21 through August 13, 2013. ILWU II, 2019 WL 267714, at *11. The Court also held that that during this time period, the work stoppages and slowdowns were motivated by the reefer dispute. Id. The Court further held that issue preclusion prevents the ILWU Entities from arguing that during this period the ILWU Entities had motivations other than the reefer dispute. Id. at *9-10 (“What the ILWU Entities would not be able to argue if issue preclusion is applied is that the work stoppages or slowdowns were motivated by something other than the reefer dispute, such as ICTSI's poor management, equipment failure, or safety issues. This would be because the issue of what motivated the work stoppages and slowdowns was directly at issue in the previous adjudications, the ILWU Entities made arguments regarding what motivated them or had the opportunity to make those arguments, and those arguments were rejected. . . . The issue of what motivated the ILWU members to engage in work stoppages and slowdowns is identical, was actually litigated, and was necessarily decided . . . . Thus, it is given preclusive effect.”). The Court thus disagrees with the ILWU Entities that they can argue other motives existed during the adjudicated period. The ILWU Entities are precluded from presenting evidence and argument that the work stoppages and slowdowns from May 21, 2012 through August 13, 2013 were motivated by reasons other than the reefer dispute.[3]

         The ILWU Entities' final argument is that they should be able to present evidence that the negative conditions that motivated the slowdowns and stoppages after August 13, 2013, existed before that date and progressively got worse, so that it does not appear to the jury that the ILWU Entities are arguing that suddenly on or after August 14, 2013, conditions became so bad as to warrant work stoppages and slowdowns for reasons other than the reefer dispute. To the extent the ILWU Entities wish to present evidence that, for example, there were generally unsafe working conditions or bad management decisions by ICTSI that existed throughout the relationship of the parties and increased over time, and these factors resulted in work stoppages and slowdowns in later, unadjudicated time periods, the Court will permit such evidence, including from May 21, 2012 through August 13, 2013. This evidence, however, may not be connected to specific instances of work stoppages or slowdowns during the previously-adjudicated timeframe. In other words, witnesses may not testify that they engaged in certain work stoppages or slowdowns between May 21, 2012 and August 13, 2013, because of unsafe equipment, poor management decisions by ICTSI, or reasons other than the reefer dispute. Witnesses may discuss factual instances relating to, for example, unsafe equipment and management decisions and the escalation of those instances over time, but only may connect those instances as motivation for work stoppages and slowdowns occurring after August 13, 2013.

         The Court notes that in their Trial Brief, the ILWU Entities cite as examples of the type of conduct that caused the later work stoppages and slowdowns the requirement to operate cranes in bypass mode and changing stop signs to yield signs. These purported problems, however, were argued to ALJ Wedekind and were rejected as credible reasons for work stoppages and slowdowns. Thus, they may not be argued as reasons for the later work stoppages and slowdowns unless there was an escalation of this specific conduct, or it was in combination with new, additional safety concerns. The ILWU Entities cannot merely cite to the same conduct that was previously rejected by ALJ Wedekind or this Court in its Contempt Order and argue that the conduct is sufficient for later time periods. The Court is allowing the ILWU Entities to discuss alleged management and safety issues during the previously-adjudicated periods for the limited purpose of providing a coherent timeline and arguing an escalation of problems that purportedly led to later lawful work stoppages and slowdowns. The Court, however, will not permit the ILWU Entities to present previously-rejected arguments and attempt to apply them to later time periods.

         b. Motion No. 2: Evidence and argument disputing that the Port controlled the reefer work or it was unlawful for the ILWU Entities to pursue that work through labor activities. GRANTED IN PART.

         ICTSI moves to exclude evidence and argument disputing that the Port controlled the reefer jobs because this issue previously has been adjudicated and the Court found issue preclusion applies. ICTSI also moves to exclude evidence and argument that it was lawful for the ILWU Entities to pursue the reefer work through labor activities, that the reefer work belonged to ILWU members under the Pacific Coast Longshore and Clerks Agreement (“PCL&CA”), that the reefer work could or should have been controlled by ICTSI as a member of the Pacific Maritime Association (“PMA”), or that ICTSI engaged in a “plot” with the Port to keep the reefer work from ILWU members.

         The ILWU Entities respond that they will follow the Court's Order that issue preclusion prevents them from arguing that any entity other than the Port controls the reefer work. They also accept that their 2012 litigation position was found to be legally invalid and that the PCL&CA does not “trump” ICTSI's lease with the Port. The ILWU Entities further assert that they do not intend to argue that ICTSI engaged in a “plot” with the Port. Thus, all these aspects of ICTSI's motion are granted.

         The ILWU Entities argue, however, that they should be permitted to present to the jury the fact that ICTSI willingly joined the PMA and thus accepted the benefits and burdens of the PCL&CA. Additionally, ICTSI represented to the PMA that ICTSI had no third-party contractual obligations that conflicted with the PCL&CA. The ILWU Entities assert that the tension between ICSTI's lease with the Port (which required that the reefer work be assigned by the Port, which traditionally went to IBEW members) and ICTSI's membership in the PMA and thereby becoming a party to the PCL&CA (which required that the reefer work be assigned to ILWU members) created a situation that was inevitably going to result in problems. The ILWU Entities argue that this is important “context” for jurors to know, both with respect to the general management style and business practices of ICTSI (signing a lease in direct contradiction with the PCL&CA, foregoing its obligations under the PCL&CA, and undermining its relationship with its workforce right from the start) and that it is prejudicial simply to inform jurors that the ILWU Entities lost the legal battle that ILWU members should get the reefer jobs without this context. To hold otherwise, argue the ILWU Entities, would create an appearance that the ILWU Entities pursued the reefer jobs after 40 years for no apparent reason.

         The issues of who controlled the reefer work, whether ICTSI had a job preservation claim, and whether the ILWU Entities engaged in illegal secondary conduct during this time period with the motive of obtaining the reefer jobs already have been decided through issue preclusion and may not be relitigated. ICTSI asserts in its Trial Memorandum, however, that “the jury will be entitled to consider whether ILWU, Local 8, or Local 40 intended to harm ICTSI. That intent is important because, in effect, that intent makes the ILWU Entities responsible for a broad range of harms.” ICTSI also asserts that “given ILWU Entities' clear intention to drive away Hanjin and other carriers, the jury will be entitled to find that-having done so-ILWU Entities' conduct at a minimum increased the risk that ICTSI would be unable to replace the volume associated with lost carriers before March 2017, when it bought out its lease.” ICTSI thus appears to be putting the ILWU Entities' intent to harm ICTSI and the carriers at the forefront of this trial and claiming a “broad range” of harms as a result, beyond the narrow § 187 findings that are established through issue preclusion.

         The findings established through issue preclusion are relatively narrow. They are that the ILWU Entities engaged in threats to harm ICTSI and the carriers and engaged in certain conduct that did harm ICTSI and the carriers, with the intent to obtain the reefer work. The intent findings were specifically related to obtaining the reefer work, not generally to harm ICTSI or the carriers. ICTSI's argument at trial, however, appears to be that the ILWU Entities engaged in the conduct with the intent, or a plan or scheme, to harm ICTSI. As such, ICTSI has opened the door for the ILWU Entities to respond with evidence of its intent (to obtain the reefer jobs and not to harm ICTSI) and rebut ICTSI's allegations. This may include evidence of why the ILWU Entities believed they were entitled to the reefer jobs (e.g., because ICTSI was a PMA member and the ILWU Entities erroneously thought the PCL&CA and Joint Coast Labor Relations Committee (“CLRC”) decision would supersede the lease). This evidence, however, may only be presented in a manner that respects the conclusions that are governed by issue preclusion.

         c. Motion No. 3: Evidence and argument that the ILWU Entities have a “work preservation” defense. (Unopposed). GRANTED.

         d. Motion No. 4: Evidence and argument that slowdowns and stoppages were for “safety” issues during the adjudicated periods and beyond. GRANTED IN PART.

         ICTSI moves to preclude the ILWU Entities from relitigating that the work stoppages and slowdown from May 21, 2013 through August 13, 2013, were for “safety” reasons. This argument is subsumed in Motion in Limine No. 1 and the Court incorporates its ruling on that motion.

         ICTSI also moves to exclude evidence and argument that, absent changed circumstances, work stoppages and slowdowns from later time periods can be attributed to safety reasons. There is no issue preclusion relating to later time periods. ICTSI is free to argue to the jury that without an intervening change in circumstances it is not credible that the work stoppages and slowdowns were for safety reasons when the stoppages and slowdowns previously were found to be an improper secondary boycott and the purported safety concerns were found to be pretextual. The Court, however, will not exclude the ILWU Entities from presenting evidence and argument that later work stoppages and slowdowns were motivated by safety issues. The Court notes, however, as discussed in the Court's ruling on Motion in Limine No. 2, that safety reasons that were argued to and rejected by ALJ Wedekind or this Court, such as operating cranes in bypass mode or changing stop signs to yield signs, cannot be relitigated as applying to a later date absent evidence of escalation or in conjunction with other additional problems. The ILWU Entities may not simply repeat previously rejected arguments as sufficient for later time periods. Nonetheless, because there may have been new or escalating safety issues, this portion of ICTSI's motion is denied.

         e. Motion No. 5: Evidence and argument disputing that the ILWU Entities agreed to increase productivity. DENIED.

         ICTSI moves to exclude the ILWU Entities from disputing that Leal Sundet promised to increase productivity at Terminal 6 if the reefer jobs would be assigned to ILWU members. This promise purportedly took place during a 2013 meeting with then-Governor John Kitzhaber, the IBEW, the District Council of Trades Union (“DCTU”), the Port, the ILWU, and ICTSI. ICTSI argues that issue preclusion prevents the ILWU Entities from disputing this fact, because the Court found in its Opinion and Order resolving the National Labor Relations Board's (“NLRB”) motion for contempt (“Contempt Order”) that the declaration submitted by Bill Wyatt was more credible than the declaration submitted by Mr. Sundet and thus concluded that Mr. Sundet had made the representation at the meeting. Hooks v. Int'l Longshore & Warehouse Union, Local 8, 72 F.Supp.3d 1168, 1179-80 (D. Or. 2014). ICTSI also argues that the ILWU Entities may not dispute this fact because in responding to ICTSI's motion to compel, the ILWU Entities asserted that they were not going to rely on statements from settlement discussions and the Court stated it would hold the ILWU Entities to that representation.

         The ILWU Entities respond that they do not intend to rely on statements from settlement discussions and that it is ICTSI that is trying to allow settlement statements to be admitted. The ILWU Entities argue that under Rule 408 of the Federal Rules of Evidence, evidence of anyone “furnishing, promising, or offering . . . valuable consideration” during settlement discussions is inadmissible yet that is precisely what ICTSI is seeking to have admitted, and be undisputed. The ILWU Entities also respond that to the extent evidence of statements during the 2013 discussions with then-Governor Kitzhaber is admitted, then the Court's findings in the Contempt Order should not be given preclusive effect because the Court acknowledged in the Contempt Order it was evaluating written declarations and could not assess the credibility of live witnesses, and because additional information obtained in later discovery calls Mr. Wyatt's statements into question. Thus, argue the ILWU Entities, the credibility of Mr. Sundet and Mr. Wyatt and whether Mr. Sundet made the alleged promise of increased productivity should be assessed by the jury.

         The Court does not consider the December 2013 meeting between Governor Kitzhaber, the DCTU, the Port, the IBEW, the ILWU, and ICTSI to be “settlement discussions” covered by Rule 408.[4] The State was not a party, and the Governor was not acting in the role of a confidential mediator trying to resolve pending litigation. Instead, he was a public official working solve a public problem by increasing productivity at a shipping port that had significant public interest implications. Additionally, the temporary work assignment agreement that was reached in December 2013 was between the Port, the IBEW, and the DCTU. It was not a “settlement” between the Port and the ILWU. Nor was it a “settlement” between ICTSI and the ILWU. Nor did it resolve or purport to resolve the pending litigation. Accordingly, the Court does not find that Rule 408 applies to the purported statement of Mr. Sundet.

         The Court also does not consider its factual findings in the Contempt Order relating to the discussions that took place in the meeting with Governor Kitzhaber to qualify for issue preclusion. The Court was not evaluating live testimony and expressly made its findings on a limited written record. There was no cross examination of either Mr. Sundet or Mr. Wyatt. This particular issue of witness credibility, although sufficiently resolved for purposes of the Contempt Order, was not fully litigated or necessarily decided for purposes of issue preclusion. ICTSI argues that the ILWU Entities chose not to have Mr. Sundet testify at the contempt hearing and thus waived their opportunity to request his live testimony be assessed for credibility, but Mr. Wyatt also did not testify live. Both witnesses may now testify before a jury and the jury may assess credibility. ICTSI's motion is denied.

         f. Motion No. 6: Evidence and argument disputing previously adjudicated facts. GRANTED IN PART.

         ICTSI requests that “all factual findings and legal conclusions” in the two NLRB decisions and the Court's earlier Contempt Order be given preclusive effect. ICTSI previously moved for summary judgment requesting that an enumerated list of 205 statements from the NLRB decisions and the Court's Contempt Order be given preclusive effect. The Court denied ICTSI's motion for partial summary judgment on this point because ICTSI essentially copied nearly all of the statements from the respective earlier judicial decisions and requested that they be given preclusive effect. ICTSI did not explain how each requested “fact” met the standards for preclusion and “essentially asked for pre-approval of ICTSI's ability to present at trial some large amount of unidentified evidence (e.g., unknown witness testimony, unidentified documentary evidence, etc.).” ILWU II, 2019 WL 267714, at *11. The Court noted that ICTSI could get the relief it requests by submitting exhibits it believes should be permitted based on preclusion, submitting witness statements including testimony it believes is permissible based on preclusion, or moving in limine to exclude “certain specific evidence.” Id. Instead of following the Court's directive, ICTSI's filed an even broader motion, requesting that all statements of law and fact contained in the earlier decisions be given preclusive effect. This motion is denied.

         ICTSI also requests an order giving preclusive effect to 39 specific statements copied or paraphrased from the decisions of ALJs Wedekind and Schmidt and this Court's Contempt Order. These statements include findings of fact and conclusions of law.[5] ICTSI does not provide specific argument as to how each of the 39 statements meets the elements of preclusion (e.g., was necessarily decided), why the statements are not cumulative, how the statements are relevant to damages or a claim or defense at issue (particularly when the Court has decided § 187(a) liability for the previously-adjudicated timeframe through issue preclusion), or how the statements should be presented to the jury. Moreover, the Court is admitting the previously-adjudicated determinations that the ILWU's proffered alternative motivations other than the reefer dispute were not credited. Some of the offered statements thus are cumulative because they are merely statements of an ALJ or the Court discussing and disregarding the proffered explanations. The relevance of such statements is further diminished by the Court's conclusion in Motion in Limine No. 1 that the ILWU Entities may not dispute their motive during the adjudicated time period.

         Accordingly, at this time the Court gives preclusive effect only to statements that give a fuller explanation of the § 187 violation findings by one or both of the two ALJs or this Court or are relevant to ICTSI's claim that the ILWU Entities engaged in work stoppages and slowdowns during later time periods to obtain the reefer jobs (e.g., statements that may indicate a longer- term plan or goal).[6] ICTSI may renew its requests on additional statements if it can demonstrate how they meet the requirements for issue preclusion, are relevant to a claim or defense at issue or damages, are not cumulative, and are not unduly prejudicial.

         The Court gives preclusive effect to the following statements listed by ICTSI in Exhibit A to the Declaration of Jeffrey S. Eden: 1; 2 as modified by ILWU; 3; 4; 7; 10; 12; 13, modified as follows: adding “that operating in bypass mode was an OSHA violation and” after “Bitz stated . . .” so that the sentence reads “Bitz stated that operating in bypass mode was an OSHA violation and that the Union was ‘not going to work in a manner to help [ICTSI] as they have in the past' because of the complaints ICTSI had filed against Local 8 members.”; 14, modified as follows: changing first sentence to read “In the summer of 2012, Local 8 crane operators and truckdrivers refused to move two 20-foot containers (‘twin 20s') at a time on older ‘bomb carts.'” and adding “claimed” before “safety reasons” in the second sentence and deleting the last two sentences and replacing them with “The claimed safety reasons were not credited and were found to be pretextual.”; 22 (first and third sentences only); 23 (first, second, and fourth sentences only); 32; and 35.

         g. Motion No. 7: Evidence and argument that the ILWU Entities had a good faith belief that the reefer work belonged to their members. DENIED.

         ICTSI argues that because § 187 violations involve strict liability, the ILWU Entities' good faith belief is irrelevant, confusing, and unduly prejudicial. The ILWU Entities respond that it would be prejudicial to them if the jury is not allowed to know and understand the origins of the reefer dispute and the ILWU Entities' motivations, because ICTSI has put those motivations at issue. The ILWU Entities assert that these motivations include that the Port promised it would abide by the outcome of the contractual grievance procedure (the CLRC decision), that the PMA advised ICTSI that its contractual argument had no chance of winning, and that the CLRC and local area arbitrator ordered ICTSI to assign the reefer jobs to ILWU members.

         The only authority cited by ICTSI that § 187 involves strict liability requiring evidence of good faith be excluded for all purposes is W. R. Grace & Co. v. Local Union No. 759, Int'l Union of United Rubber, Cork, Linoleum & Plastic Workers of Am., 652 F.2d 1248 (5th Cir. 1981). In W.R. Grace, the Fifth Circuit discussed the retroactive effect of appellate decisions, including providing examples of when parties act in good faith and yet are found to be liable for that conduct years later. Id. at 1255-56. The court discussed parties who publish something believing it to be lawful yet later it is found to be obscene or libelous, parties who rescind a contract believing the other party materially breached the contract only for it to be determined later that the other party did not breach the contract, and unions who engage in conduct they believe to be lawful under the secondary boycott provisions of the National Labor Relations Act (“NLRA”) but later are held liable for illegal conduct. Id. The court stated:

One of the clearest examples in the law of the situation where persons may in good faith believe they are acting properly but nevertheless be found to be responsible in damages for improper conduct is in the secondary boycott provisions of the National Labor Relations Act, 29 U.S.C. § 158(b)(4) (unfair labor practice), and 29 U.S.C. § 187 (creating civil liability for exactly the same conduct). It is well established that a NLRB determination not to prosecute a union for violation of § 8(b)(4) is not res judicata and does not bar a suit for damages under § 187 for the same episode. In other words, the union may not only be in good faith before charges are filed that it is not violating the secondary boycott provisions, it may be further convinced by the Board considering its actions but deciding not to prosecute a complaint under § 8(b)(4), but still be found liable for damages under § 187. These examples of the usual retroactive effect of an appellate court decision reversing a lower court decision or the decision of an administrative agency can be multiplied a thousand fold.

Id. at 1256 (citations omitted).

         W.R. Grace does not hold that evidence of good faith is never admissible or relevant in a § 187 case. The fact that the ILWU Entities may have acted in good faith but nonetheless may still be found liable for damages under § 187 does not mean that their good faith is irrelevant for all purposes. As discussed above in ICTSI's Motion in Limine No. 2, ICTSI appears to be placing the ILWU Entities' intent at issue for a “broad range” of harms. Because ICTSI has opened the door by arguing about the ILWU Entities' general intent to harm ICTSI, then the ILWU Entities' may introduce evidence rebutting that asserted intent, including that they believed the PCL&CA and CLRC decision would govern. Accordingly, this motion is denied.

         h. Motion No. 8: Evidence and argument that ICTSI failed to mitigate damages or acted improperly by failing to insist on control of the reefer jobs. GRANTED.

         The ILWU Entities assert that the although the Court will instruct the jury that the Port had control of the reefer work and the ILWU Entities engaged in illegal secondary activity, the ILWU Entities have the right to present the background facts to the jury that ICTSI could simply have requested an amendment to the lease and avoided the entire problem. ICTSI would then have controlled the disputed work and could have assigned it to ILWU members. The ILWU Entities contend that there is evidence that the Port did not “have a good plan B” other than ICTSI and thus ICTSI had leverage to demand the lease be amended.

         ICTSI argues that as the victim of illegal labor activity, it “was under no duty . . . bow to [ILWU's] demands in order to minimize its damages.” Int'l Longshoremen's & Warehousemen's Union v. Juneau Spruce Corp., 189 F.2d 177, 191 (9th Cir. 1951); see also Eazor Express, Inc. v. Teamsters, Chauffeurs, Warehousemen & Helpers of Am., 520 F.2d 951, 969-70 (3d Cir. 1975) (noting that the duty to mitigate does not include “taking steps which amount to a capitulation to the demands of the strikers”). ICTSI further argues that allowing the ILWU Entities to present evidence that ICTSI should have obtained control over the reefer jobs is irrelevant, unduly prejudicial, and poses too great a danger of confusing the issues and misleading the jury.

         The ILWU Entities provide no legal authority for their contention that they should be permitted to present as “background facts” that ICTSI could have demanded an amendment to the lease. Allowing the evidence as argued by the ILWU Entities is not relevant because it does not have a tendency to make a consequential fact more or less probable. ICTSI did not have control of the reefer jobs. Whether they could have negotiated an amendment is irrelevant to ICTSI's claimed § 187 violation. To the extent a possible lease amendment may be argued to be relevant as mitigation of damages, it is speculation and ICTSI was under no obligation to capitulate to the ILWU members' demands and illegal secondary activity either by forcing the Port to assign the reefer work to ILWU members or forcing the Port to amend the lease to allow ICTSI to assign the reefer work to ILWU members. Accordingly, any potential probative value is minimal and is substantially outweighed by the danger of confusing the issues, misleading the jury, and unfair prejudice to ICTSI. This motion is granted.

         i. Motion No. 9: Evidence and argument that ICTSI's failure to concede to Hanjin's demand to assign the reefer work to ILWU members was improper or a failure to mitigate. GRANTED.

         ALJ Schmidt made several findings regarding threats made by the ILWU Entities to Hanjin, and Hanjin's response. These included: (1) beginning March 9, 2012, Local 40 filed numerous grievances against Hanjin; (2) on August 15, 2012, ILWU sent a letter to Hanjin asserting that as a carrier it had primary responsibility to ensure the PCL&CA was followed, the fact that ICTSI was not following the PCL&CA by not having the reefer work assigned to ILWU members did not alter Hanjin's obligation under the PCL&CA, the NLRB's decision against the ILWU did not provide a defense to Hanjin, and effective immediately Locals 8 and 40 would prosecute lost work grievances against Hanjin for every single container for which an ILWU member was not given the reefer work; (3) on August 16, 2012, Hanjin sent an email to ICTSI and the Port, attaching ILWU's letter, and demanding that ICTSI use ILWU members for reefer work; and (4) that “[b]y filing, processing, maintaining and prosecuting grievances or lawsuits or threatening to engage in such conduct against ICTSI, ” Hanjin, and others, the ILWU Entities violated § 8(b)(4)(ii)(B) of the NLRA.[7] Accordingly, the ILWU Entities' conduct toward Hanjin was part of the illegal secondary activity. Hanjin's forwarding of the ILWU's demand with a request that ICTSI and the Port concede to the ILWU's demand is the equivalent of requesting that they give in to the labor demands. Evidence that ICTSI should have conceded to Hanjin's demand, triggered by ILWU's threat, is similar to the evidence that is the subject of Motion in Limine No. 8. It is not relevant and is excluded.

         The ILWU Entities argue that Hanjin sent requests that the reefer jobs be assigned to ILWU members in June 2012, before ILWU's August 15th letter, and thus those requests were not because of the illegal secondary activities. The ILWU Entities argue ICTSI's refusal to follow the request of its largest customer is an example of ICTSI's “cavalier attitude” toward its customers. This argument is rejected. Local 40 had been filing grievances against Hanjin, found to violate the NLRA, since March 2012. The ILWU Entities engaged in serious work stoppages and slowdowns in late May 2012 through early June 2012. The June 2012 correspondence between Hanjin, ICTSI, and the Port was focused on the labor issues at Terminal 6 and the cost and problems those labor issues were creating for Hanjin. Moreover, the June 22, 2012 email from Hanjin to the Port and ICTSI specifically states that they have put Hanjin “in harm's way, ” that Hanjin will hold them responsible for any additional costs as a result of the “jurisdictional dispute, ” and that Hanjin believed the Port and ICTSI chose to “throw [Hanjin] under the bus.” It is clear that Hanjin's correspondence and request that the reefer jobs be given to ILWU members were triggered by the ILWU Entities' illegal secondary activity.

         To the extent the ILWU Entities have other evidence of ICTSI's purported “cavalier attitude” toward its customers, including Hanjin, that evidence may be admissible. But evidence of any carriers acquiescing to any of the ILWU Entities' demands or threats relating to the reefer jobs and, in turn, making demands or threats to ICTSI will be excluded under Rules 402 and 403 of the Federal Rules of Evidence.

         j. Motion No. 10: Evidence and argument relating to Evraz Steel's complaints or the expiration of its sublease. GRANTED IN PART.

         ICTSI asserts that no parties' experts have included any damages relating to ICTSI's relationship with Evraz Steel (f/k/a Oregon Steel) and thus any evidence regarding Evraz Steel's complaints about ICTSI or the expirations of its sublease should be precluded as irrelevant. ICTSI also argues that including such evidence would be prejudicial, confusing, and is improper “character” evidence that creates “innuendos of collateral misconduct.” Coursen v. A.H. Robins Co., 764 F.2d 1329, 1335 (9th Cir. 1985). ICTSI further argues that it would be a waste ICTSI's allotted trial time to necessitate a response regarding ICTSI's relationship with Evraz Steel.

         The ILWU Entities respond that ICTSI's expert Nolan Gimpel opined that the only way for Terminal 6 to be profitable is a mixed-use terminal, which means having non-container customers like Evraz Steel. The ILWU Entities contend that by allowing Evraz Steel to leave, ICTSI lost one million dollars per year in revenue, another factor that contributed to the demise of Terminal 6, which is relevant to damages.

         At trial, ICTSI has the burden of proving: (1) for the non-adjudicated time periods, a violation of § 187 (proving the requisite underlying conduct with an object of obtaining the reefer jobs); (2) any proven violation of § 187 (whether through issue preclusion or at trial) was a substantial factor or materially contributed to ICTSI's damages; and (3) the amount of ICTSI's damages. The fact that ICSTI is not seeking damages for the loss of revenue from Evraz Steel does not mean that losing Evraz steel is not relevant to the amount damages that ICTSI is claiming. The ILWU Entities argue that losing the one million per year in revenue from Evraz Steel contributed to the overall weakening of Terminal 6 and thus was a factor in causing ICTSI's claimed damages. The fact of the loss of Evraz Steel is thus relevant. The details of the relationship between Evraz Steel and ICTSI, however, is not relevant, other than an assertion that ICTSI exhibited poor management with Evraz Steel or had disputes Evraz Steel and thus it did the same with ILWU members. This type of evidence is discussed below in Motion in Limine No. 19. Accordingly, evidence regarding the financial information relating to the sublease between Evraz Steel and ICTSI may be admitted as relevant to damages.

         k. Motion No. 11: Evidence and argument that Hanjin's bankruptcy offsets ICTSI's damages. DENIED.

         ICTSI argues that evidence of Hanjin's August 2016 bankruptcy should be precluded under general tort principles, relying on Sections 920 and 435A of the Restatement (Second) of Torts. Section 920 states that when a defendant's tortious conduct has caused harm to a plaintiff and in so doing has conferred a special benefit to the interest of the plaintiff that was harmed, the value of the benefit conferred is considered in mitigation of damages, to the extent that it is equitable. Under this section of the Restatement, the benefit must result from the tortious conduct. Section 435A states: “A person who commits a tort against another for the purpose of causing a particular harm to the other is liable for such harm if it results, whether or not it is expectable, except where the harm results from an outside force the risk of which is not increased by the defendant's act.”

         ICTSI argues that the “benefit” of Hanjin's bankruptcy, meaning avoidance of some amount of future uncollectible receivables, was not caused by the ILWU Entities' conduct and they cannot argue for any offset in damages. The relevance of Hanjin's bankruptcy, however, is not to offset some speculative amount of specific avoided future receivables that may have been lost or discounted in Hanjin's bankruptcy proceeding.[8] Hanjin's bankruptcy is relevant because ICTSI is claiming damages relating to the lost business of Terminal 6 from 2012 through March 2017, which includes a period of seven months after Hanjin filed for bankruptcy. Hanjin's bankruptcy in August 2016, which arguably might have resulted in Terminal 6's lost business even if the ILWU Entities had never engaged in illegal secondary activity, is probative of whether the ILWU Entities' secondary boycott activities were a substantial factor or materially contributed to at least some of ICTSI's claimed damages. Hanjin's bankruptcy is not a “special benefit” conferred by the conduct of the ILWU Entities. ICTSI's Section 920 argument therefore is inapposite.

         ICTSI also argues that Hanjin's bankruptcy is irrelevant because it occurred more than one and one-half years after the ILWU Entities forced Hanjin to stop calling at Terminal 6. ICTSI argues that in the “real world” Hanjin was not a customer of Terminal 6 when it filed for bankruptcy and it is only in a “but for” world in which Hanjin's bankruptcy might be relevant. ICTSI's claimed damages, however, are based on a “but for” world where the ILWU Entities never engaged in the illegal secondary conduct. ICTSI's damages expert assumes that without the illegal secondary conduct of the ILWU Entities, ICTSI would have increased business at Terminal 6 while also increasing prices. The fact that Terminal 6's largest customer, who represented 80 percent of the Port's container business, filed for bankruptcy in August 2016 and ceased doing business entirely, is relevant to this “but for” world and damages model.

         ICTSI's Section 435A argument is that the ILWU Entities intended to “send Hanjin packing, ” engaged in illegal behavior to achieve that goal, achieved it, and thus are liable for that harm. This argument only gets ICTSI so far. The damages model in this case presumes that there was no illegal labor activity, the ILWU Entities did not send Hanjin packing, and Hanjin would have continued to call on Terminal 6. The parties agree that the ILWU Entities played no part in Hanjin's bankruptcy, and thus it was an outside force. The fact that in August 2016 Hanjin filed for bankruptcy and ceased doing business is a relevant fact to the causation of ICTSI's damages in the “but for” scenario after that point in time, particularly because ICTSI is seeking special damages relating to the lease termination. ICTSI's argument that in the “real world” the ILWU Entities' conduct made it impossible to replace Hanjin's volume when other ports could replace Hanjin's volume is an argument to make to the jury. It does not, however, support excluding the fact of Hanjin's bankruptcy from the jury. This motion by ICTSI is denied.

         l. Motion No. 12: Evidence and argument that the ILWU Entities' wrongful conduct allowed ICTSI to avoid 21 years of lease payments. GRANTED IN PART.

         ICTSI moves to exclude any evidence or argument that the it obtained a benefit from the ILWU Entities' illegal conduct by saving 21 years of lease payments. ICTSI notes that it is not seeking any damages for lost profits after it terminated its lease with the Port in March 2017 and thus the “saved” lease payments after that date are irrelevant unless the lease termination was unreasonable. ICTSI argues that because the ILWU Entities' damages expert does not opine that ICTSI should have continued its lease for 21 more years and incurred $94.5 million in lease payments instead of terminating the lease, the lease termination was reasonable and the lease payments beyond termination are not material to calculating damages. ICTSI also argues that the “saved” lease payments were not a “special benefit” conferred by the ILWU Entities and thus they cannot use them as an offset to damages. ICTSI further argues that it need not “choose” between lost profits and out-of-pocket recovery, but that argument is not relevant to this motion in limine.

         The ILWU Entities respond that their defense relating to damages on this point is not that ICTSI “saved” 21 years of lease payments or that those “saved” lease payments offset any damages claimed by ICTSI. The ILWU Entities assert that their position on ICTSI's damages, including ICTSI's claimed special damages for the lease termination payment and the value of the equipment, is that those damages do not have the requisite causal nexus to the ILWU's illegal secondary boycott activity. The ILWU Entities contend that their conduct did not “materially contribute” or was not a “substantial factor” in causing ICTSI's damages, and that ICTSI would have been harmed regardless of the ILWU Entities conduct, and thus causation is not met. The ILWU Entities assert that their expert will opine that because of Hanjin's bankruptcy (caused by factors unrelated to the ILWU Entities' conduct), Terminal 6 would have failed regardless of the ILWU Entities' illegal secondary boycott activities, ICTSI would have had to terminate its lease at or around the same time in 2017, ICTSI would have incurred the same costs (lease termination fee and equipment costs), and thus ICTSI's damages do not have the required causal nexus. See Feather v. United Mine Workers of Am., 711 F.2d 530, 537 (3d Cir. 1983) (“If the plaintiff would have been harmed regardless of the section 8(b)(4) violation, then of course there can be no recovery.”).

         ICTSI's motion is granted to the extent that the ILWU Entities cannot argue (and they represent they do not intend to argue) that the lease payments after March 2017 were “saved” as a result of the conduct by the ILWU Entities, are an offset to any claimed damages by ICTSI, or ICTSI's savings in not having to remit those payments is a “benefit” from the conduct of the ILWU Entities. The ILWU Entities may, however, argue that the lease termination fee, equipment costs, and other claimed damages were caused by other circumstances, including Hanjin's bankruptcy, and that ICTSI would have had to terminate its lease and incur those costs regardless of the ILWU Entities' conduct. As discussed in Motion in Limine No. 11, ICTSI's claimed damages are based on a scenario in which the ILWU Entities' never engaged in the illegal secondary boycott and ICTSI's expert opines as to the ...


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