ILWU dockworkers union files for Chapter 11 bankruptcy protection

After a 10-day trial, the jury awarded $93.6 million in damages to ICTSI, which, if enforced, was expected to push the ILWU into bankruptcy. The jury found that ILWU National was responsible for 55% of ICTSI’s damages, and Local 8 was responsible for 45%.

In March 2020, Oregon District Judge Michael Simon dramatically reduced the amount due, ruling that damages should not exceed $19.1 million.

The two sides are currently filing briefs regarding the final extent of damages. The ILWU argued in a court filing on Friday that ICTSI’s damages “are non-existent or minimal, at most $3.9 million.”

The ILWU filed financial documents as part of its voluntary Chapter 11 petition in the Northern District Court of California, listing current assets of $11.6 million, including $9.5 million in cash, far below the maximum amount in the judge’s 2020 ruling.

In a letter sent to union chapters on Sunday, ILWU management said it had been prepared to “find a way” to pay the $19.1 million judgement at the time of the 2020 ruling, but “ICTSI rejected the reduced damages so a new trial was scheduled.” ICTSI is seeking $48 million to $142 million in damages in the new trial, said the ILWU.

“Unfortunately, the ILWU cannot afford to continue to litigate this case,” union management told members.

ILWU responds to ‘scorched-earth litigation tactic’

According to ILWU President Willie Adams, “While we have attempted numerous times to resolve the decade-long litigation with ICTSI Oregon, at this point, the union can no longer afford to defend against ICTSI’s scorched-earth litigation tactic.

“We intend to use the Chapter 11 process to implement a plan that will bring this matter to resolution. The officers are confident that we are taking the right step to put our organization on the best path forward — and we are optimistic for all that is ahead.”

ILWU management said in its letter to union members: “We want to assure you that the ILWU is operating business as usual. Our bankruptcy filing is not a liquidation or what is often thought of when you hear the word ‘bankruptcy.’”

The ILWU Chapter 11 filing comes a month after the union ratified a new six-year labor contract with the employers’ group, the Pacific Maritime Association, ending the threat of labor-dispute-related slowdowns at West Coast container ports. Concerns over port labor issues have led to a shift in container shipping volumes to East and Gulf coast ports over the past year.

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