Columbia Export Terminal, LLC v. Int'l Longshore & Warehouse Union
Decision Date | 20 December 2019 |
Docket Number | Case No. 3:18-cv-2177-JR |
Parties | COLUMBIA EXPORT TERMINAL, LLC, Plaintiff, v. THE INTERNATIONAL LONGSHORE AND WAREHOUSE UNION; et al., Defendants. |
Court | U.S. District Court — District of Oregon |
United States Magistrate Judge Jolie A. Russo issued Findings and Recommendation ("F&R") in this case on June 12, 2019. ECF 103. Magistrate Judge Russo recommended that the motion to dismiss filed by Defendant International Longshore and Warehouse Union ("ILWU") and joined by the individual defendants be granted and this case dismissed.1
Under the Federal Magistrates Act ("Act"), the Court may "accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate." 28 U.S.C. § 636(b)(1). If a party objects to a magistrate judge's findings and recommendations, "the court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made." Id.; Fed. R. Civ. P. 72(b)(3).
For those portions of a magistrate judge's findings and recommendations to which neither party has objected, the Act does not prescribe any standard of review. See Thomas v. Arn, 474 U.S. 140, 152 (1985) (); United States. v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc) ( ). Although without objections no review is required, the Magistrates Act "does not preclude further review by the district judge[] sua sponte . . . under a de novo or any other standard." Thomas, 474 U.S. at 154. Indeed, the Advisory Committee Notes to Fed. R. Civ. P. 72(b) recommend that "[w]hen no timely objection is filed," the Court review the magistrate judge's recommendations for "clear error on the face of the record."
For those portions of Magistrate Judge Russo's F&R to which neither party has objected, this Court follows the recommendation of the Advisory Committee and reviews those matters for clear error on the face of the record. No such error is apparent, and those portions are adopted.
Plaintiff timely filed an objection. ECF 109. Plaintiff argues that Judge Russo applied the incorrect "preemption" standard instead of the "preclusion" standard when considering whether § 301 of the Labor-Management Relations Act ("LMRA") precludes Plaintiff from bringing claims in federal court under the Racketeer Influenced and Corrupt Organizations Act ("RICO").Plaintiff argues that the "preclusion" test requires evaluating whether there is a true "conflict" between RICO and the LMRA and, if there is, the later-passed RICO must be given supremacy unless there is some indication of Congressional intent that the LMRA should govern.
Judge Russo noted that when two federal statutes are at issue, the proper term is "preclusion" instead of "preemption," but that the analysis under the LMRA is the same as with preemption. She also noted that the terms often are used interchangeably, and thus she used them interchangeably. Judge Russo cited many cases under the LMRA and the Railway Labor Act ("RLA") that apply the same "preemption" test in deciding questions of preclusion between federal statutes.2 Judge Russo described and applied the relevant two-part test—first examining whether the asserted cause of action involves a right conferred by law independent of the parties' collective bargaining agreement ("CBA") and, if so, asking whether the right is nevertheless substantially dependent on the CBA.
Plaintiff argues that Judge Russo, the cases she cited, and the cases cited by ILWU all applied the incorrect test, either improperly considering preemption instead of preclusion or without directly considering the issue because the differences between the two were not raised. Plaintiff also asserts that the Ninth Circuit has "sub silentio" overruled Hubbard v. United Airlines, 927 F.2d 1094 (9th Cir. 1991), which applied the preemption test in finding that theRLA preempted claims under RICO. Besides the generally disfavored concept of silent reversals, the Ninth Circuit recently held that "[i]n evaluating RLA or LMRA § 301 preemption we are guided by the principle that if a state law claim 'is either grounded in the provisions of the labor contract or requires interpretation of it,' the dispute must be resolved through grievance and arbitration." Alaska Airlines, Inc. v. Schurke, 898 F.3d 904, 920 (2018) (en banc). The Ninth Circuit expressly stated: "The same principle applies to federal law claims, although they might better be described as 'precluded.'" Id. at 920 n.4 (emphasis added).3 The court detailed the two-step test applied by Judge Russo arising from that governing principle applicable to both state and federal law claims and then explained:
As this two-step preemption inquiry suggests, RLA and LMRA § 301 preemption differ from typical conflict preemption because they are not driven by substantive conflicts in law. Rather, RLA and LMRA § 301 preemption are grounded in the need to protect the proper forum for resolving certain kinds of disputes (and, by extension, the substantive law applied thereto). RLA and LMRA § 301 preemption are, in effect a kind of 'forum' preemption, resembling the doctrine of primary jurisdiction or the reference of disputes to arbitration under the Federal Arbitration Act, 9 U.S.C. §§ 1-16.
Id. at 922 (emphasis in original). Thus, the Ninth Circuit has not silently overruled applying the preemption test to analyzing whether federal claims are precluded by the RLA and LMRA, but has, sitting en banc, expressly reaffirmed that test.
If Plaintiff believes that a different test should be applied when evaluating whether a federal law claim is precluded by the RLA or LMRA, that is an issue for Plaintiff to take up with the Ninth Circuit. This Court must follow Ninth Circuit precedent. Thus, Plaintiff's objection that Judge Russo applied the incorrect preemption test is rejected. That portion of Judge Russo's F&R is adopted.
Plaintiff also objects that Judge Russo incorrectly concluded that Plaintiff's claims would require substantial analysis of the CBA because Judge Russo failed to appreciate that the CBA only applies to Defendants' defense and Judge Russo identified no "ambiguous" term of the agreement. Plaintiff further argues that the grievance process of the CBA does not apply to RICO claims, does not apply to claims against ILWU but only claims against the local unions, and is not a mandatory requirement for claims brought by Plaintiff as the employer, but is only mandatory for claims brought by employees.
Plaintiff's objection that the CBA is only relevant to Defendants' defense misunderstands how RICO claims are considered in the context of evaluating mail and wire fraud predicate crimes in these types of cases. The alleged acts are not mail or wire fraud unless they were fraudulent or part of a scheme to defraud, cheat, or deceive. The acts were not fraudulent if they were permitted under the CBA. Thus, as explained by Judge Russo, interpretation of the CBA is necessary to determine whether the disputed time entries were or were not appropriate and compensable under the CBA. Accord Underwood v. Venango River Corp., 995 F.2d 677, 685 (7th Cir. 1993) (); Merryman Excavation, Inc. V. Int'l Union of Operating Eng'rs., 552 F. Supp. 2d 745, 750 (N.D. Ill. 2008) (...
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