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Peterson v. Port of Benton County

United States District Court, E.D. Washington

December 20, 2019

RANDOLPH PETERSON, individually; TRI-CITY RAILROAD COMPANY, LLC, a Washington limited liability company, Plaintiffs,
v.
PORT OF BENTON COUNTY, et al., Defendants.

          ORDER GRANTING MOTIONS FOR PARTIAL SUMMARY JUDGMENT RE: TORTIOUS INTERFERENCE AND FIRST AMENDMENT RETALIATION

          THOMAS O. RICE, CHIEF UNITED STATES DISTRICT JUDGE

         BEFORE THE COURT is Defendant City of Richland's Motion for Summary Judgment Re: Tortious Interference (ECF No. 199) and Defendants the Port of Benton and Scott D. Keller's Motion for Partial Summary Judgment Re: First Amendment Retaliation (ECF No. 209). Telephonic argument was heard on December 19, 2019. The Court - having reviewed the file, the completed briefing and heard oral argument from the parties - is fully informed. For the reasons discussed below, the Motions (ECF Nos. 199; 209) are granted.

         STANDARD OF REVIEW

         A movant is entitled to summary judgment if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A fact is “material” if it might affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue is “genuine” where the evidence is such that a reasonable jury could find in favor of the non-moving party. Id. The moving party bears the “burden of establishing the nonexistence of a ‘genuine issue.'” Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986). “This burden has two distinct components: an initial burden of production, which shifts to the nonmoving party if satisfied by the moving party; and an ultimate burden of persuasion, which always remains on the moving party.” Id.

         Per Rule 56(c), the parties must support assertions by: “citing to particular parts of the record” or “showing that the materials cited do not establish the absence or presence of a genuine dispute, or than an adverse party cannot produce admissible evidence to support the fact.” (emphasis added). Only admissible evidence may be considered. Orr v. Bank of America, NT & SA, 285 F.3d 764 (9th Cir. 2002). The nonmoving party may not defeat a properly supported motion with mere allegations or denials in the pleadings. Liberty Lobby, 477 U.S. at 248. The “evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in [the non-movant's] favor.” Id. at 255. However, the “mere existence of a scintilla of evidence” will not defeat summary judgment. Id. at 252.

         TORTIOUS INTERFERENCE

         A. Background

         The relevant facts are not in dispute. In short, in 2011, the City of Richland (the “City”) and Union Pacific Railroad (“UP”) entered into a Standard Form Railroad Track Use Agreement (“SFRTUA”) governing the use of a track known as the Horn Rapids Spur owned by the City. The agreement included terms requiring UP and its agents to not oppose the Center Parkway Crossing-a planned railroad crossing over trackage leased by Plaintiff Tri-City Railroad Company, LLC, (“TCRY”) which the City had been working toward since early 2001. See ECF No. 108 at 3-4. At this time, TCRY operated as a handling carrier for UP, which thereby involved TCRY operating on the City-owned Horn Rapids Spur. See ECF No. 199 at 5.

         Despite UP's agreement that its agents would not oppose the Center Parkway Crossing project, TCRY - an agent of UP as its handling carrier - continued to oppose the crossing. ECF No. 199 at 5-6. As a result, the City informed UP that it was in breach of the SFRTUA. ECF No. 199 at 6-7. UP attempted to secure TCRY's non-opposition, but TCRY demanded costs and fees incurred over the past decade pertaining to Center Parkway from the City as a condition of its non-opposition. ECF Nos. 199 at 7; 200 at 13, ¶ 40; 228 at 8, ¶ 22. The City objected to the request and TCRY did not change its stance. ECF No. 228 at 8-9, ¶¶ 24-28. Ultimately, UP canceled its contract with TCRY. ECF No. 228 at 10, ¶ 30-31.

         B. Discussion

         The City argues that, even if the elements of tortious interference are met (a point it does not concede), the actions were privileged because the City was merely exercising its right to demand performance under an agreement with UP. Plaintiffs, on the other hand, argue that the “City utilized its SFRTUA with UP for the sole purpose of destroying TCRY's relationship with UP and shippers along the Horn Rapids Industrial Spur.” ECF No. 228 at 17. The City is correct and Plaintiffs' argument is irrelevant (and unsupported by the facts).

         “The elements of the tort of interference with a business expectancy are: (1) existence of a valid contractual relationship or business expectancy; (2) knowledge of the relationship or expectancy by the alleged interfering party; (3) intentional interference which induces or causes breach or termination of the relationship or expectancy; and (4) resultant damage.” Plumbers & Steamfitters Union Local 598 v. Washington Pub. Power Supply Sys., 44 Wn.App. 906, 920 (1986) (citing Sea-Pac Co. v. United Food & Comm'l Workers Local 44, 103 Wash.2d 800, 805 (1985). Even if all four elements are present, “interference is justified as a matter of law if the interferer has engaged in the exercise of an absolute right equal or superior to the right which was invaded.” Id. (citing Brown v. Safeway Stores, Inc., 94 Wash.2d 359, 375 (1980); Topline Equip., Inc. v. Stan Witty Land, Inc., 31 Wash.App. 86, 93 (1982)). “An absolute right exists only where a person has a definite legal right to act, without any qualification.” Id. (quoting Topline, 31 Wash.App. at 94). When such an “absolute right” exists, the alleged interference is “legally justified” and the “motivations are irrelevant”. Washington Const., Inc. v. Sterling Sav. Bank, 163 Wash.App. 1027, 2011 WL 4043579, at *14 (2011); O'Brien v. W. Union Tel. Co., 62 Wash. 598, 603, 114 P. 441, 442 (1911). In particular, Washington has recognized the “absolute right” to exercise ones clearly defined contractual rights. See Sterling, 2011 WL 4043579, at *14 (contractual right to cease loan advances upon default was an “unqualified right”, which is a “recognized privilege negating any improper interference”; “because the interference was legally justified, Sterling's motivations are irrelevant for purposes of this issue”); O'Brien, 62 Wash. at 603 (lessor had absolute right to request termination of employee of lessee pursuant to express contractual provision).

         The case of O'Brien is on point. In O'Brien, a newspaper leased a wire from a telegraph company; the lease agreement “expressly provided that the operators so employed [under the newspaper] should be satisfactory to the telegraph company[.]” Id. at 602. Upon discovering the plaintiff-operator was employed by the newspaper, the telegraph company requested his termination and the newspaper complied with the request. Id. The employee sued the telegraph company for tortious interference, but the Washington Supreme Court determined the telegraph company's conduct was privileged as a matter of law:

The property which the respondent was employed to operate was the property of the appellant, and under all authority it was competent for the appellant on leasing it to make it a condition of the contract that no one should be employed to operate it who was not satisfactory to the appellant. And, having power to make this a condition of the lease, it has the right to enforce it without laying itself liable in damages to any one. It matters not what its motives may be in any given case. These are not to be inquired into. Since the ...

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