                                                                              FILED
                           NOT FOR PUBLICATION                                SEP 30 2013

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS



                           FOR THE NINTH CIRCUIT


RONALD K. HOOKS, Regional Director               No. 12-36068
of the Nineteenth Region of the National
Labor Relations Board, for and on behalf         D.C. No. 3:12-cv-01691-SI
of the National Labor Relations Board,

              Petitioner - Appellee,             MEMORANDUM*

  v.

INTERNATIONAL LONGSHORE AND
WAREHOUSE UNION;
INTERNATIONAL LONGSHORE AND
WAREHOUSE UNION, LOCAL 8;
INTERNATIONAL LONGSHORE AND
WAREHOUSE UNION, LOCAL 40,

              Respondents - Appellants.


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

                     Argued and Submitted September 9, 2013
                            San Francisco, California

Before: ALARCÓN, FISHER, and BERZON, Circuit Judges.



        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
      This appeal from a preliminary injunction pursuant to section 10(l) of the

National Labor Relations Act (“the Act”), 29 U.S.C. § 160(l), concerns a

jurisdictional dispute between two labor unions over work at the Port of Portland

(“Port”). We affirm the injunction in part and vacate in part. We remand to the

district court for modifications to the injunction consistent with this disposition.

      (1) The district court did not abuse its discretion in holding that the

Regional Director (“Director”) of the National Labor Relations Board (“the

Board”) will likely succeed in establishing that the International Longshore and

Warehouse Union, ILWU Local 8, and ILWU Local 40 (“ILWU”) violated section

8(b)(4)(ii)(B) of the Act. 29 U.S.C. § 158(b)(4)(ii)(B).

      It was not an abuse of discretion to conclude that the Board is likely to find

that the Port controls the disputed work. The Port expressly retained the right to

control the disputed work when it leased terminal operations to ICTSI Oregon, Inc.

in 2010. In addition, ILWU’s argument regarding the shipping carriers ability to

bypass the Port conflates the carriers’ control over their containers with the legal

question of whether they have the “‘right to control’ the assignment of the work” at

this port. NLRB v. Enter. Ass’n of Pipefitters of New York & Vicinity, Local Union

No. 638, 429 U.S. 507, 537 (1977). Finally, although the Board is under no




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obligation to adopt an Administrative Law Judge’s recommendation,1 Overstreet v.

United Bhd. of Carpenters, Local Union No. 1506, 409 F.3d 1199, 1207 n.12 (9th

Cir. 2005), the thorough opinion of ALJ Schmidt finding in favor of the Director

on this claim is a “useful benchmark,” Small v. Avanti Health Sys., LLC, 661 F.3d

1180, 1186 (9th Cir. 2011) (quotation marks and citation omitted), of the

Director’s likelihood of success before the Board.2

      We are mindful that an employer cannot be permitted purposely to contract

away its right to control, thereby insulating itself from otherwise lawful primary

activity. But in this case, employees of the Port — not the shipping carriers —



      1
         The ALJ decision, ILWU (Port of Portland), 2013 WL 4587186 (NLRB
Div. of Judges Aug. 28, 2013), is not part of the record because it was issued after
the district court’s opinion; we may take judicial notice of it, however, pursuant to
Federal Rule of Evidence 201. See Small, 661 F.3d at 1186. We likewise take
judicial notice of Judge Michael Mosman’s June 17, 2013 decision vacating the
section 10(k) award. See 9th Cir. Dkt. No. 60 (Aug. 30, 2013).
      2
        ILWU’s reliance on a footnote in NLRB v. Int’l Longshoremen’s Ass’n,
AFL-CIO, 473 U.S. 61, 74 n.12 (1985), is unavailing. As the district court
correctly noted, the passing comment does not alone support the factual conclusion
that these carriers have the right to control this work at this port at this time. We
also agree with Judge Simon and ALJ Schmidt that the line of cases beginning with
Associated General Contractors of America, Inc. v. I.U.O.E., Local 701, 529 F.2d
1395 (9th Cir. 1976), is inapposite. Those cases concern subcontracting practices
in the construction industry, in which different contractual relationships are
permitted than are applicable here. See, e.g., 29 U.S.C. § 158(e) (exempting
construction industry contracts from prohibition on agreements not to subcontract).


                                          3
have performed the disputed work for 40 years. And ICTSI was not a party to the

collective bargaining agreement with ILWU at the time it entered into the lease

with the Port. We therefore see no evidence to suggest that these secondary

employers “actively and knowingly contracted away [their] control by initiating

the very restrictions which ultimately gave rise to the union’s demands. . . .”

Electrical Workers, Local 501 (Atlas Construction Company), 216 NLRB 417

(1975), enf’d 566 F.2d 348, 353 (D.C. Cir. 1977).

      If the Board finds that the Port controls the disputed work, ILWU’s

invocation of the work-preservation doctrine fails. See NLRB v. Int’l

Longshoremen’s Ass’n, AFL-CIO, 447 U.S. 490, 504 (1980). As a result, it was

not an abuse of discretion for the district court to conclude that the Director is

likely to succeed in establishing that ILWU’s grievances and lawsuits constitute

unlawful secondary activity in violation of section 8(b)(4)(ii)(B).

      The district court’s holding as to section 8(b)(4)(ii)(B) does not depend on

the Board’s findings in the section 10(k) proceeding. 29 U.S.C. § 160(k). Indeed,

the district court itself found that the Port likely controlled the disputed work in

proceedings prior to the Board’s section 10(k) ruling. As a result, neither ILWU’s

constitutional challenge to the Board’s quorum nor the June 17, 2013 decision




                                           4
vacating the section 10(k) award on jurisdictional grounds undermines this aspect

of the injunction.

      Having found a likelihood of success on the merits, the district court did not

abuse its discretion in concluding that the risk of irreparable harm, the balance of

the hardships, and the public interest support issuance of a section 10(l) injunction

here. See Small v. Operative Plasterers’ & Cement Masons’ Int’l Ass’n Local 200,

AFL-CIO, 611 F.3d 483, 490 (9th Cir. 2010). It was not an abuse of discretion to

find that ILWU’s continued prosecution of the grievances, with resulting litigation

costs and liability risks, as well as the risk that the carriers would act on their

threats to bypass the Port, even before any awards are enforced against them,

outweighed the hardship to ILWU from delaying adjudication of its damages

claims.

      The “familiar set of four equitable factors,” id., therefore supports the

district court’s injunction with respect to section 8(b)(4)(ii)(B).

      (2) In light of Judge Michael Mosman’s June 17, 2013 decision vacating the

section 10(k) award, the district court’s holding with regard to section

8(b)(4)(ii)(D), 29 U.S.C. § 158(b)(4)(ii)(D), cannot stand. The district court’s

reasoning — that “[a]fter the NLRB has issued a § 10(k) decision resolving a

disputed work assignment, it is a violation of § 8(b)(4)(ii)(D) for the losing union


                                            5
to file lost work opportunity grievances or § 301 claims that have the object of

undermining the § 10(k) award” — is premised on the existence of a prior section

10(k) award.

      We do not pass on the merits of Judge Mosman’s holding that the Board

lacked jurisdiction to issue the section 10(k) award. Whether the holding is correct

or not, the district court judgment in that case vacated the section 10(k) award, so it

is not currently in effect. The district court provided no basis other than

interference with the section 10(k) award for concluding that the Director is likely

to succeed in establishing a violation of section 8(b)(4)(ii)(D). We therefore vacate

that portion of the injunction directed at conduct in violation of section

8(b)(4)(ii)(D). Each party shall bear its own costs of appeal.

      AFFIRMED IN PART, VACATED IN PART, AND REMANDED.




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