Columbia Export Terminal, LLC v. Int'l Longshore & Warehouse Union

• Decision Date: 28 June 2021
• Docket Number: No. 20-35037,20-35037
• Citation: 2 F.4th 1243
• Parties: COLUMBIA EXPORT TERMINAL, LLC, Plaintiff-appellant, v. INTERNATIONAL LONGSHORE AND WAREHOUSE UNION ; Kane Ahuna, an Individual; Jason Andrews, an Individual; Jesus Arango, an Individual; Mike Ayers, an Individual; Brian Banta, an Individual; Ken Banta, an Individual; Keith Banta, an Individual; Andre Barber, an Individual; Crystal Barnes, an Individual; Craig Bitz, an Individual; Lisa Blanchard, an Individual; Randy Booker, an Individual; Brad Boyd, an Individual; Larry Broadie, an Individual; Felix Brown, an Individual; Jimmy Brown, an Individual; Jon Budiselic, an Individual; William Burris, an Individual; Douglas Carey, an Individual; Greg Carse, an Individual; Anthony Cerrutti, an Individual; Hugh Colson, an Individual; Tim Copp, an Individual; E. Coturen, an Individual; Steven Cox, an Individual; Ryan Cranston, an Individual; James Daw, an Individual; Adam Day, an Individual; James Degman, an Individual; Torrae de la Cruz, an Individual; Frank de la Rosa, an Individual; Thomas Demuth, an Individual; James Dinsmore, an Individual; Brian Dircksen, an Individual; Terence Dodson, an Individual; Gary Dotson, an Individual; Oliver Ede, an Individual; Ray Elwood, an Individual; Todd Englert, an Individual; Chris Eubanks, an Individual; David Fambro, an Individual; Larry Fast, an Individual; James Finch, an Individual; Greg Flannery, an Individual; Mike Gardner, an Individual; Brett Gebhard, an Individual; Richard Gilstrap, an Individual; Ted Gray, an Individual; Kurtis Hanson, an Individual; Mike Harms, an Individual; Randy Harper, an Individual; Terry Hickman, an Individual; James Holland, an Individual; Bruce Holte, an Individual; Ronald Huseman, an Individual; Nathan Hyder, an Individual; Troy James, an Individual; Sam Jauron, an Individual; Anthony Jeffries, an Individual; Kevin Johnson, an Individual; Pat Johnson, an Individual; Terry Johnson, an Individual; Tim Jones, an Individual; Jon Julian, an Individual; Leroy Kadow, an Individual; George Kelly, an Individual; Eric King, an Individual; Wayne King, Esquire, an Individual; Kevin Knoth, an Individual; Kenneth Kytle, an Individual; Mike Lachapelle, an Individual; Jimmy Lai, an Individual; Tom Langman, an Individual; Tyler Lautenschlager, an Individual; Jack Lee, an Individual; Ken Lee, an Individual; Dan Lessard, an Individual; Shanti Lewallen, an Individual; Danny Loke, an Individual; Thomas Love, an Individual; Wilfred Luch, an Individual; Karl Lunde, an Individual; Craig Magoon, an Individual; Mike Maher, an Individual; Jason Malachi, an Individual; Levi Manning, an Individual; Rickie Manning, an Individual; Jay Mantei, an Individual; Pat Maronay, an Individual; A. Martin, an Individual; Garry Matson, an Individual; Pat McClain, an Individual; M. McMahon, an Individual; Mike McMurtrey, an Individual; Donald Mehner, an Individual; Curtis Meuler, an Individual; Karl Minich, an Individual; Josh Morris, an Individual; John Mulcahy, an Individual; Tom Neitling, an Individual; Martin Nelson, an Individual; Greg Nemyre, an Individual; Rian Nestlen, an Individual; Chris Overby, an Individual; Ken Oviatt, an Individual; Thomas Owens, an Individual; John Peak, an Individual; Shane Pederson, an Individual; Jeff Perry, an Individual; John Perry, an Individual; Arnold Peterson, an Individual; Terry Player, an Individual; James Popham, an Individual; David Porter, an Individual; Mike Rapacz, an Individual; John Rinta, an Individual; William Roberts, an Individual; Joseph Robinson, an Individual; Mark Robinson, an Individual; Chris Scheffel, an Individual; Theodore Schuh, an Individual; Mike Sexton, an Individual; Mark Siegel, an Individual; Courtney Smith, an Individual; Jeff Smith, an Individual; Mike Smith, an Individual; Scott Stein, an Individual; Donald Stykel, an Individual; Mike Suhr, an Individual; Leal Sundet, an Individual; Lawrence Thibedeau, an Individual; Mark Thorsfeldt, an Individual; Shawn Thorstad, an Individual; James Thorud, an Individual; David Trachsel, an Individual; William Underwood, an Individual; Jason Vance, an Individual; David Varnon, an Individual; Pan Varnon, an Individual; Mike Walker, Esquire, Attorney, an Individual; Dwayne Wamsher; Eugene Webb, an Individual; Mike Wehage, an Individual; Kevin Weldon, an Individual; Spencer White, an Individual; Richard Widle, an Individual; Nural Willis, an Individual; Ronald Woods, an Individual; Mark Wright, an Individual; Carol Wurdinger, an Individual; Jerry Ylonen, an Individual; P. Yocitim, an Individual; Richard Zatterberg, an Individual; Fred Zoske, an Individual; James Cothren, an Individual; Bobby Cranston, an Individual; Terek Johnson, an Individual; Angela Martin, Esquire, an Individual; Patrick McClain, an Individual; Matthew McMahon, an Individual; Shann Pederson, an Individual; Michael Sexton, an Individual; Jeffrey Smith, an Individual; Laurence Thubedeau, an Individual; Paul Yochim, an Individual, Defendants-appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

2 F.4th 1243

COLUMBIA EXPORT TERMINAL, LLC, Plaintiff-appellant,

v.INTERNATIONAL LONGSHORE AND WAREHOUSE UNION ; Kane Ahuna, an Individual; Jason Andrews, an Individual; Jesus Arango, an Individual; Mike Ayers, an Individual; Brian Banta, an Individual; Ken Banta, an Individual; Keith Banta, an Individual; Andre Barber, an Individual; Crystal Barnes, an Individual; Craig Bitz, an Individual; Lisa Blanchard, an Individual; Randy Booker, an Individual; Brad Boyd, an Individual; Larry Broadie, an Individual; Felix Brown, an Individual; Jimmy Brown, an Individual; Jon Budiselic, an Individual; William Burris, an Individual; Douglas Carey, an Individual; Greg Carse, an Individual; Anthony Cerrutti, an Individual; Hugh Colson, an Individual; Tim Copp, an Individual; E. Coturen, an Individual; Steven Cox, an Individual; Ryan Cranston, an Individual; James Daw, an Individual; Adam Day, an Individual; James Degman, an Individual; Torrae de la Cruz, an Individual; Frank de la Rosa, an Individual; Thomas Demuth, an Individual; James Dinsmore, an Individual; Brian Dircksen, an Individual; Terence Dodson, an Individual; Gary Dotson, an Individual; Oliver Ede, an Individual; Ray Elwood, an Individual; Todd Englert, an Individual; Chris Eubanks, an Individual; David Fambro, an Individual; Larry Fast, an Individual; James Finch, an Individual; Greg Flannery, an Individual; Mike Gardner, an Individual; Brett Gebhard, an Individual; Richard Gilstrap, an Individual; Ted Gray, an Individual; Kurtis Hanson, an Individual; Mike Harms, an Individual; Randy Harper, an Individual; Terry Hickman, an Individual; James Holland, an Individual; Bruce Holte, an Individual; Ronald Huseman, an Individual; Nathan Hyder, an Individual; Troy James, an Individual; Sam Jauron, an Individual; Anthony Jeffries, an Individual; Kevin Johnson, an Individual; Pat Johnson, an Individual; Terry Johnson, an Individual; Tim Jones, an Individual; Jon Julian, an Individual; Leroy Kadow, an Individual; George Kelly, an Individual; Eric King, an Individual; Wayne King, Esquire, an Individual; Kevin Knoth, an Individual; Kenneth Kytle, an Individual; Mike Lachapelle, an Individual; Jimmy Lai, an Individual; Tom Langman, an Individual; Tyler Lautenschlager, an Individual; Jack Lee, an Individual; Ken Lee, an Individual; Dan Lessard, an Individual; Shanti Lewallen, an Individual; Danny Loke, an Individual; Thomas Love, an Individual; Wilfred Luch, an Individual; Karl Lunde, an Individual; Craig Magoon, an Individual; Mike Maher, an Individual; Jason Malachi, an Individual; Levi Manning, an Individual; Rickie Manning, an Individual; Jay Mantei, an Individual; Pat Maronay, an Individual; A. Martin, an Individual; Garry Matson, an Individual; Pat McClain, an Individual; M. McMahon, an Individual; Mike McMurtrey, an Individual; Donald Mehner, an Individual; Curtis Meuler, an Individual; Karl Minich, an Individual; Josh Morris, an Individual; John Mulcahy, an Individual; Tom Neitling, an Individual; Martin Nelson, an Individual; Greg Nemyre, an Individual; Rian Nestlen, an Individual; Chris Overby, an Individual; Ken Oviatt, an Individual; Thomas Owens, an Individual; John Peak, an Individual; Shane Pederson, an Individual; Jeff Perry, an Individual; John Perry, an Individual; Arnold Peterson, an Individual; Terry Player, an Individual; James Popham, an Individual; David Porter, an Individual; Mike Rapacz, an Individual; John Rinta, an Individual; William Roberts, an Individual; Joseph Robinson, an Individual; Mark Robinson, an Individual; Chris Scheffel, an Individual; Theodore Schuh, an Individual; Mike Sexton, an Individual; Mark Siegel, an Individual; Courtney Smith, an Individual; Jeff Smith, an Individual; Mike Smith, an Individual; Scott Stein, an Individual; Donald Stykel, an Individual; Mike Suhr, an Individual; Leal Sundet, an Individual; Lawrence Thibedeau, an Individual; Mark Thorsfeldt, an Individual; Shawn Thorstad, an Individual; James Thorud, an Individual; David Trachsel, an Individual; William Underwood, an Individual; Jason Vance, an Individual; David Varnon, an Individual; Pan Varnon, an Individual; Mike Walker, Esquire, Attorney, an Individual; Dwayne Wamsher; Eugene Webb, an Individual; Mike Wehage, an Individual; Kevin Weldon, an Individual; Spencer White, an Individual; Richard Widle, an Individual; Nural Willis, an Individual; Ronald Woods, an Individual; Mark Wright, an Individual; Carol Wurdinger, an Individual; Jerry Ylonen, an Individual; P. Yocitim, an Individual; Richard Zatterberg, an Individual; Fred Zoske, an Individual; James Cothren, an Individual; Bobby Cranston, an Individual; Terek Johnson, an Individual; Angela Martin, Esquire, an Individual; Patrick McClain, an Individual; Matthew McMahon, an Individual; Shann Pederson, an Individual; Michael Sexton, an Individual; Jeffrey Smith, an Individual; Laurence Thubedeau, an Individual; Paul Yochim, an Individual, Defendants-appellees.

No. 20-35037

United States Court of Appeals, Ninth Circuit.

Argued and Submitted October 26, 2020 Portland, Oregon

Filed June 28, 2021

Christopher F. McCracken (argued) and Jacqueline M. Damm, Ogletree Deakins Nash Smoak & Stewart P.C., Portland, Oregon; Thomas A. Lidbury, Ogletree Deakins Nash Smoak & Stewart P.C., Chicago, Illinois; for Plaintiff-Appellant.

Darin M. Dalmat (argued) and Robert H. Lavitt, Barnard Iglitzin & Lavitt LLP, Seattle, Washington, for Defendants-Appellees.

Before: Susan P. Graber, Richard R. Clifton, and Sandra S. Ikuta, Circuit Judges.

Dissent by Judge Ikuta

CLIFTON, Circuit Judge:

Columbia Export Terminal ("CET") brought an action under the Racketeer Influenced and Corrupt Organizations Act ("RICO") against the International Longshore and Warehouse Union ("ILWU") and 154 individual ILWU workers employed by CET. The district court concluded that CET's RICO claims could not properly proceed in court at this time and dismissed the case without prejudice. It reasoned that the claims required interpretation of the collective bargaining agreement ("CBA") under which the workers were employed, that the CBA provided a process for arbitration of disputes, and that the Labor Management Relations Act ("LMRA") precluded court adjudication of the RICO claims before the arbitration process had been exhausted. CET appeals the dismissal.

We previously reached a conclusion similar to that reached by the district court regarding a labor contract governed by the Railway Labor Act ("RLA"). Hubbard v. United Airlines, Inc. , 927 F.2d 1094 (9th Cir. 1991). The district court relied on that precedent, rejecting an argument by CET that Hubbard had been overruled. We agree with the district court that Hubbard remains alive and persuasive. Our conclusion that the same result is required for a contract governed by the LMRA is a logical extension of our precedents. We take that step here and affirm the judgment of the district court.

I. Background

CET operates a grain export terminal in the Port of Portland and employs workers who are members of the ILWU. CET alleges that the ILWU and the 154 named individual defendants conspired to fraudulently furnish timesheets reporting hours that were not actually worked and, as a result, overbilled CET by more than $5.3 million.

CET filed this action alleging seven claims under RICO, 18 U.S.C. §§ 1961 – 68. In response, the ILWU filed a motion to dismiss contending, among other things, that CET's claims were preempted under § 301 of the LMRA, 29 U.S.C. § 185, because resolution of the claims required interpretation of the underlying CBA, which requires exhaustion of the agreement's grievance procedures. The individual defendants joined the union's motion. The district court agreed with the ILWU and dismissed the case without prejudice. CET appeals.

II. Discussion

The central dispute on appeal is whether CET's claims, which it styled as RICO claims, are preempted or precluded by § 301 of the LMRA. We review the district court's interpretation of the statutes de novo . Alaska Airlines Inc. v. Schurke , 898 F.3d 904, 916 (9th Cir. 2018) (en banc).

A. The two-step preclusion and preemption under LMRA § 301.

The LMRA, sometimes described as the Taft-Hartley Act, was enacted in 1947 to "promote the full flow of commerce" by "provid[ing] orderly and peaceful procedures for preventing [ ] interference by [employees or employers] with the legitimate rights of the other." 29 U.S.C. § 141(b). To that end, LMRA § 301(a) provides that "[s]uits for violation of contracts between an employer and a labor organization ... may be brought in any district court." 29 U.S.C. § 185(a).

On its face, § 301 reads as a jurisdictional statute, and it "contains no express language of preemption, [but] the Supreme Court has long interpreted the [provision] as authorizing federal courts to create a uniform body of federal common law to adjudicate disputes that arise out of labor contracts." Curtis v. Irwin Indus., Inc. , 913 F.3d 1146, 1151 (9th Cir. 2019) ; Textile Workers Union v. Lincoln Mills , 353 U.S. 448, 450–51, 457, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957).

Consistent with this purpose, the Supreme Court concluded that § 301 impliedly preempted state law in order to give effect to the congressional intent that "doctrines of federal labor law uniformly [ ] prevail over inconsistent local rules." Teamsters v. Lucas Flour Co. , 369 U.S. 95, 104, 82 S.Ct. 571, 7 L.Ed.2d 593 (1962). Therefore, any "union agreement made pursuant to [a federal labor law] has [ ] the imprimatur of the federal law upon it and, by force of the Supremacy Clause of Article VI of the Constitution, could not be [ ] vitiated by any provision of the laws of a State." California v. Taylor , 353 U.S. 553, 561, 77 S.Ct. 1037, 1 L.Ed.2d 1034 (1957) (quoting Ry. Emp. Dept. v. Hanson , 351 U.S. 225, 232, 76 S.Ct. 714, 100 L.Ed. 1112 (1956) ).

Federal courts have developed common law to govern labor disputes and have concluded that a "central tenet of federal labor-contract law under § 301 [is...