Surf City Steel, Inc. v. Int'l Longshore & Warehouse Union
| Decision Date | 18 June 2015 |
| Docket Number | Case No. CV 14–05604 BRO (SSx) |
| Citation | 123 F.Supp.3d 1219 |
| Parties | Surf City Steel, Inc. et al. v. International Longshore and Warehouse Union et al. |
| Court | U.S. District Court — Central District of California |
David A. Rosenfeld, Weinberg Roger and Rosenfeld APC, Alameda, CA, Lisl R. Duncan, Weinberg Roger and Rosenfeld APC, Los Angeles, CA, Paul C. Hetterman, Ronald C. Gladney, Hartnett Gladney Hetterman LLC, St. Louis, MO, for Surf City Steel, Inc. et al.
Robert Remar, Eleanor Morton, Lindsay R. Nicholas, Leonard Carder LLP, San Francisco, CA, Michael Eldredge Plank, Gillian Brett Goldberg, Steven R. Holguin, Holguin Garfield Martinez and Quinonez APLC, Los Angeles, CA, for International Longshore and Warehouse Union et al.
Pending before the Court is Defendants' motion to dismiss Plaintiffs' Second Amended Complaint ("SAC") pursuant to Federal Rule of Civil Procedure 12(b)(6). (Dkt. No. 48.) After consideration of the papers filed in support of and in opposition to the instant motion, the Court deems this matter appropriate for decision without oral argument of counsel. See Fed.R.Civ.P. 78 ; C.D. Cal. L.R. 7–15. For the following reasons, Defendants' motion is GRANTED in part and DENIED in part.
Plaintiffs are comprised of two primary groups. First, Plaintiffs Surf City Steel, Inc. and Sarens USA, Inc. (collectively, the "Employer Plaintiffs") are each California corporations that constitute "employers" within the meaning of 29 U.S.C. § 152(2).1 (SAC ¶¶ 5–6.) Plaintiffs allege that the Employer Plaintiffs each perform work within the relevant market area described in the SAC and performed relevant work within that market area. (SAC ¶ 7.) Second, Plaintiffs International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers ("Iron Workers"), International Association Local 378, International Association Local 377, International Association Local 433, International Associations Local 29, and International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers Local 86 (collectively, the "Union Plaintiffs") are labor unions whose members perform relevant work. (SAC ¶¶ 8–13.)
Defendants are also labor unions that "conduct[ ] activities as a labor organization" in the relevant market area as defined in the SAC. (SAC ¶¶ 14–18.) The named Defendants in this action include International Longshore Warehouse Union ("ILWU"), ILWU Local 10, ILWU Local 8, ILWU Local 19, and ILWU Local 13. (SAC ¶¶ 14–18.)
As defined in the SAC, the "relevant market area" consists of "those port facilities on the West Coast of the United States within the States of California, Oregon and Washington, including the Long Beach, California Port Facility; the Los Angeles, California Port Facility; the Oakland, California Port Facility; the San Francisco Port Facility; the Portland, Oregon Port Facility; and the Seattle/Tacoma, Washington Port Facility." (SAC ¶ 19.)
The SAC also defines the "relevant work" as: (SAC ¶ 20.)
Plaintiffs allege that Defendants have acted in concert with various port managers who conduct business in the relevant market area to monopolize the relevant work market and exclude Plaintiffs from conducting business in the relevant work market area. (SAC ¶ 27.) According to Plaintiffs, in 2008 Defendants entered into an agreement with the port managers—known as the Pacific Coast Longshore Contract Document ("PCLCD")—which covers the relevant work involving ports along the West Coast, including in Long Beach, Los Angeles, Oakland, Oregon, and Washington State. (SAC ¶ 38.) Plaintiffs allege that the purpose and intent of the PCLCD is to eliminate the competition that Defendants would face from Plaintiffs in the relevant market. (SAC ¶ 45.) Plaintiffs further allege that the agreement is not designed to preserve work that Defendants have historically performed, but instead for Defendants to monopolize labor in the relevant market to control the price of labor. (SAC ¶¶ 41–58.) Plaintiffs claim that the PCLCD has no pro-competitive justification. (SAC ¶ 59.)
Additionally, the PCLCD includes a mandatory grievance and arbitration process, by which Defendants have enforced the agreement against Plaintiffs. (SAC ¶ 39.) The SAC asserts that the PCLCD's arbitration mechanism effectively prohibits Plaintiffs—who are not signatories to the PCLCD—from bidding on projects and performing work that they have traditionally performed in the relevant market area. (SAC ¶¶ 60–68.) In support of these allegations, Plaintiffs provide a number of factual examples in which Plaintiffs were precluded from bidding or working on certain projects in the relevant market area because they were not ILWU contractors. (See SAC ¶¶ 69–89.)
As a result of these allegations, Plaintiff Iron Workers sent ILWU a letter in June 2014 in which Iron Workers accused Defendants of violating federal antitrust laws. (SAC ¶ 68.) When ILWU did not respond, Plaintiffs filed their Complaint on July 18, 2014. (Dkt. No. 1.) On October 9, 2014, Defendants filed a motion to dismiss the Complaint, (Dkt. No. 27), which the Court granted on January 20, 2015 with leave to amend, (Dkt. No. 40). Plaintiffs then filed a First Amended Complaint on February 9, 2015. (Dkt. No. 41.) On February 23, 2015, Defendants filed a motion to dismiss the First Amended Complaint, (Dkt. No. 42), which the Court granted on April 6, 2015, again with leave to amend, (Dkt. No. 46).
Plaintiffs then filed the SAC on April 20, 2015. (Dkt. No. 47.) In the SAC, Plaintiffs allege three causes of action for: (1) violation of sections 1 and 2 of the Sherman Act, (SAC ¶¶ 90–130); (2) breach of contract, (SAC ¶¶ 131–42); and (3) violation of section 303 of the Labor–Management Relations Act ("LMRA"), 29 U.S.C. § 187, (SAC ¶¶ 143–62). Defendants then brought the instant motion to dismiss the SAC on May 4, 2015. (Dkt. No. 48.) Plaintiffs opposed this motion on May 21, 2015, (Dkt. No. 50), and Defendants replied on June 8, 2015, (Dkt. No. 51).
Under Rule 8(a), a complaint must contain a "short and plain statement of the claim showing that the [plaintiff] is entitled to relief." Fed. R. Civ. P. 8(a). If a complaint fails to do this, the defendant may move to dismiss it under Rule 12(b)(6). Fed. R. Civ. P. 12(b)(6). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim that is plausible on its face.’ " Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). A claim is plausible on its face "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. "Factual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Thus, there must be "more than a sheer possibility that a defendant has acted unlawfully." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937. "Where a complaint pleads facts that are ‘merely consistent with’ a defendant's liability, it ‘stops short of the line between possibility and plausibility’ " that the plaintiff is entitled to relief. Id.
Where a district court grants a motion to dismiss, it should provide leave to amend unless it is clear that the complaint could not be saved by any amendment. Manzarek v. St. Paul Fire & Marine Ins. Co. , 519 F.3d 1025, 1031 (9th Cir.2008) (). But leave to amend "is properly denied ... if amendment would be futile." Carrico v. City & Cnty. of S.F. , 656 F.3d 1002, 1008 (9th Cir.2011).
As in the previous two motions to dismiss, Defendants seek dismissal of each of Plaintiffs' claims for (1) violation of section 303 of the LMRA; (2) violations of federal antitrust law; and (3) breach of contract. The Court will discuss each claim in turn.
Section 303 of the LMRA "provides a judicial forum to pursue damages resulting from certain unfair labor practices committed by a union." Am. President Lines, Ltd. v. Int'l Longshore & Warehouse Union, Alaska Longshore Div., Unit 60 , 721 F.3d 1147, 1149 (9th Cir.2013). Plaintiffs allege that Defendants have committed unfair labor practices because their conduct violates section 8(b)(4) of the LMRA, 29 U.S.C. § 158(b)(4). (SAC ¶ 143.) Defendants make two arguments in favor of dismissing Plaintiffs' LMRA claims. First, Defendants argue that the Union Plaintiffs lack standing to assert such a claim. Second, Defendants contend that Plaintiffs have failed to allege a "secondary objective" as required by section 303 of the LMRA.
The Ninth Circuit has held that "Section 303's requirement that an injury occurs ‘by reason of’ a Section 8(b)(4) violation ‘imposes standing limitations.’ " Am. President Lines , 721 F.3d at 1153 (quoting Fulton v. Plumbers & Steamfitters , 695 F.2d 402, 405 (9th Cir.1982) ). To determine whether section 303 standing exists, courts are to look to: "(1) the nexus between the injury and...
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