                                                                            FILED
                           NOT FOR PUBLICATION
                                                                             JUN 04 2018
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS


                            FOR THE NINTH CIRCUIT


CECIL F. SMITH,                                  No.   17-35485

              Plaintiff-Appellant,               D.C. No. 3:17-cv-00086-SI

 v.
                                                 MEMORANDUM*
EVRAZ, INC., A Delaware Corporation,

              Defendant-Appellee.


                    Appeal from the United States District Court
                             for the District of Oregon
                    Michael H. Simon, District Judge, Presiding

                       Argued and Submitted May 11, 2018
                                Portland, Oregon

Before: RAWLINSON and CHRISTEN, Circuit Judges, and BLOCK,** District
Judge.




      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.


      **
             The Honorable Frederic Block, United States District Judge for the
Eastern District of New York, sitting by designation.
       On January 7, 2013, Cecil F. Smith stepped in a deep pothole at Terminal 6

of the Port of Portland (the Port) and was seriously injured.1

       Smith consulted an attorney who requested documents from the Port relating

to the lease and maintenance agreements of Terminal 6. In December, 2013, the

Port provided Smith a copy of the lease agreement between the Port and ICTSI

Oregon, Inc. (ICTSI). In January, 2015, Smith filed an action against ICTSI

(ICTSI suit), and ICTSI moved for summary judgment on the grounds that Smith’s

claim was barred by Oregon’s two-year statute of limitations. See Or. Rev. Stat. §

12.110(1). Smith maintains that he only discovered during oral arguments in the

ICTSI suit that EVRAZ INC., NA (EVRAZ) might be responsible for maintaining

the slab yard.2

       On December 20, 2016, Smith commenced the present lawsuit against

EVRAZ in state court, alleging negligence. EVRAZ timely removed the action to

federal court under 28 U.S.C. § 1332 and sought summary judgment, claiming

Oregon’s two-year statute of limitations had run. See Or. Rev. Stat. § 12.110(1).

The district court granted the motion, and Smith filed a timely notice of appeal.

       1
               As the parties are familiar with the facts, we do not recount them in
detail here.
       2
             The district court granted ICTSI’s motion for summary judgment, and
Smith’s appeal of this ruling is pending. See Smith v. ICTSI Oregon, Inc., Ninth
Circuit Case No. 16-35242.

                                            2
       Federal courts in a diversity action must apply the substantive law of the

state where the federal court is located. See Kwan v. SanMedica Int’l, 854 F.3d

1088, 1093 (9th Cir. 2017). Oregon’s statute of limitations for a personal injury

action provides that “[a]n action for . . . any injury to the person . . . shall be

commenced within two years[.]” Or. Rev. Stat. § 12.110(1).

       Smith fails to raise a material issue of fact regarding application of Oregon’s

discovery rule. Under the discovery rule, “the notice of claim period does not

commence to run . . . until a plaintiff knows or, in the exercise of reasonable care

should know, that he or she has been injured and that there is a substantial

possibility that the injury was caused by an identified person’s tortious conduct.”

Johnson v. Multnomah Cty. Dep’t of Cmty. Justice, 178 P.3d 210, 214 (Or. 2008)

(en banc). “An injury is ‘discovered’ when a plaintiff knows, or should have

known, of a substantial possibility that three elements exist: (1) harm; (2)

causation; and (3) tortious conduct.” Dickson v. TriMet, 412 P.3d 1188, 1191 (Or.

App. 2018).

       It is undisputed that Smith immediately knew he was seriously injured when

he stepped into the slab yard pothole. Smith understood at the time of injury that

the Port owned Terminal 6 and that ICTSI leased Terminal 6 from the Port. Also,

notwithstanding Smith’s claim that he only discovered EVRAZ’s possible


                                             3
tortfeasor role during the ICTSI suit’s oral arguments, he believed at the time of

injury that EVRAZ had some form of sublease agreement with ICTSI which

allowed it to use the slab yard to move its steel slabs.

      Smith “knew or should have known that [he] had been wronged by the

possessor of the [slab yard] at the time of the fall, even though [he] did not know

who[] the possessor was.” Gehrke v. Crafco, Inc., 923 P.2d 1333, 1336 (Or. App.

1996). Accordingly, Smith’s belief that EVRAZ had a sublease which allowed it

to use the yard to move its slabs should have given him awareness of a “substantial

possibility” that EVRAZ possessed the slab yard, and therefore that each of the

three elements (harm, causation, tortious conduct) existed as to EVRAZ. Dickson,

412 P.3d at 1191.

      Furthermore, the “discovery rule does not protect those who sleep on their

rights.” Gaston v. Parsons, 864 P.2d 1319, 1324 (Or. 1994); see also Cole v.

Sunnyside Marketplace, LLC, 160 P.3d 1, 7 (Or. App. 2007) (“[W]hether facts are

‘inherently discoverable’ pertains to ‘whether the plaintiff in a negligence action

has exercised due diligence to discover the requisite facts.’”) (citing Gehrke, 923

P.2d at 1336). Because Smith’s complaint was not filed until almost four years

from the date of injury, this court is not persuaded that he “exercised due diligence




                                           4
to discover the requisite facts.”3 Cole, 160 P.3d at 7 (citing Gehrke, 923 P.2d at

1336).

      Accordingly, the court concludes as a matter of law that any rational juror

would find that Smith knew or should have known of a substantial possibility that

EVRAZ was a responsible party more than two years before he filed suit. See

Johnson v. Multnomah Cty. Dep’t of Cmty. Justice, 152 P.3d 927, 931 (Or. App.

2007), aff’d 178 P.3d 210 (Or. 2008) (en banc).

      AFFIRMED.




      3
             While not dispositive, the court notes that Smith waived initial
disclosures from EVRAZ, and, at the time of oral arguments, still did not possess a
copy of any sublease agreement between EVRAZ and ICTSI or the Port. See Oral
Argument at 3:12–4:23.

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