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Friday, March 9, 2012

New Developments in Supply Chain Security Strategy

By Craig H. Allen

Supply chain security was the subject of renewed international and national attention in the opening weeks of 2012. On January 25, 2012, the White House released its new National Strategy for Global Supply Chain Security, shortly after the World Economic Forum distributed its Global Risks 2012 report and a second report titled New Models for Addressing Supply Chain and Transport Risk. Although much of the concern over supply chain security has historically focused on the system’s vulnerability to terrorist attacks or misuse and criminal activities, the cascading tragedies that followed the 2011 earthquake in Japan loomed large in the more recent analyses. In fact, Global Risks 2012 includes a special report on The Great East Japan Earthquake that should be required reading for risk managers.

Post-9/11 Supply Chain Security

In the immediate aftermath of the September 11 attacks on the World Trade Center and Pentagon in 2001, concerns over the use of shipping containers to smuggle weapons of mass destruction or radiological dispersal devices (RDDs or “dirty bombs”) into the US reached a near fever pitch. An Italian port authority’s discovery of Amir Farid Rizk (soon nicknamed “Container Bob”), who had concealed himself in a well-stocked shipping container bound from Egypt to Canada in October 2001, demonstrated the gravity of the global container security deficit. Containers were soon depicted as potential “Trojan horses” or the “poor man’s missile.” Senior US Coast Guard leadership labeled global trade as the nation’s “Achilles heel.”

The potential for catastrophic disruption by even the mere threat of an RDD incident was brought home to security planners through a 2002 Department of Homeland Security simulation. In the simulation, two devices containing radioactive cesium wrapped around thirty pounds of C-4 explosive were “discovered” (as a part of the drill) in shipping containers in California and Georgia. Additional intelligence led officials participating in the exercise to suspect the two incidents might be part of a larger coordinated attack involving containers in other ports. In response, the department simulated the temporary closure of all of the nation’s seaports to permit them to conduct a thorough search. The economic losses that would have resulted from a nation-wide port closure, perhaps lasting up to 45 days, were estimated by the exercise participants at $66 billion, demonstrating the RDD’s potential as a “weapon of mass disruption.”

After examining aviation security risks, the 9/11 Commission concluded in its 2004 final report that the “opportunities to do harm are as great, or greater, in maritime or surface transportation.” The commissioners went on to report, “initiatives to secure shipping containers have just begun.”

Governments, intergovernmental organizations and industry responded to the post-9/11 risk assessments with a plethora of port, vessel and cargo security enhancement measures. Those measures included the International Ship and Port Facility Security Code (ISPS Code) developed by the member states of the International Maritime Organization in 2003. The World Customs Organization also adopted a series of measures aimed at better securing the international trade supply chain. Within the U.S., the Customs-Trade Partnership Against Terrorism (C-TPAT), Container Security Initiative and the 10+2 importer security filing requirement (so named for the 10 data elements that must be filed with US Customs and Border Protection 24 hours before arrival) were added.

One of the more controversial requirements imposed by Congress called for overseas scanning of all shipping containers before they are placed on US-bound vessels. Those inspections are to employ both radiation-detection and non-intrusive inspection equipment in order to detect nuclear materials or other contents of concern.

A 2005 report by RAND expressed a widely-shared belief that a 100 percent container scanning requirement would not be cost-effective, given the probability and magnitude of the risks posed and the available scanning technologies. Nevertheless, Congress’ 2006 Security and Accountability For Every (SAFE) Port Act required that, by 2007, 100 percent of US bound containers being shipped from the 22 largest foreign ports be scanned. The 2007 Implementing Recommendations of the 9/11 Commission Act, enacted by the new 110th Congress, went even further, requiring 100 percent scanning of all in-bound containers by July 1, 2012, despite serious misgivings by both trading partners and the US regulatory agencies charged with maritime security.

Congress recognized, however, that its container scanning requirement might prove unworkable. It therefore authorized the Secretary of Homeland Security to extend the deadline for up to two years if the agency concluded the 2012 goal was not achievable. The extension could also be renewed in two-year intervals. In June of 2011, DHS Secretary Janet Napolitano announced, during a visit to European ports, that her department intended to delay full implementation of the scanning requirement. Relaxation of the rule was supported by key legislators who had earlier insisted on the 100 percent rule. For example, Senator Mary Landrieu (D-Louisiana), chair of the Senate Homeland Security appropriations subcommittee, publicly explained in August 2011 that, “I voted to have every single container screened, but we’re going to have to step back from that position because the impact on trade and transportation in terms of delays would be very detrimental.” In 2011, Senator Patty Murray (D-Washington), one of the authors of the original SAFE Port Act, co-sponsored a bill that would authorize the Secretary to waive the 100 percent inspection requirement for any one of five grounds set out in the bill. The bill has been pending before the Senate Committee on Homeland Security and Governmental Affairs since April 14, 2011.

The 2006 SAFE Port Act also directed the president to develop a federal strategy to address global supply chain security. In response, the Bush Administration promulgated a detailed, 130-page Strategy to Enhance International Supply Chain Security in 2007. At roughly the same time, the International Organization for Standardization released its ISO 28000:2007 series of standards. Those voluntary ISO standards specify the requirements for a security management system to ensure safety in the supply chain and enhance the system’s robustness.

National Strategy for Global Supply Chain Security

On January 25, 2012, while in Davos, Switzerland, Secretary Napolitano announced the release of a new National Strategy for Global Supply Chain Security (SCS Strategy). The 2012 SCS Strategy, signed by the president on January 23, sets out two goals: to promote the efficient movement of goods and to foster a resilient supply chain. It then closes with an eight-bullet “path forward.” Like the 2011 Joint US-EU Statement on Supply Chain Security Secretary Napolitano signed in Brussels last June, the new strategy calls for greater international cooperation.

In a statement accompanying the release of the new SCS Strategy, Christa Brzozowski, Director for Supply Chain Security at the National Security Council, made it clear that the administration’s concerns extended beyond terrorism threats:

“As a number of recent events remind us, this system is dynamic and complex but also vulnerable to numerous threats. These threats, such as pandemics, natural disasters, or attacks involving weapons of mass destruction could undermine the continuity of the global supply chain system as a whole. Also, because of the interconnectedness of the system, even smaller, localized events could escalate rapidly and cause significant disruptions.”

The six-page SCS Strategy document, which was reportedly two years in the making, is probably best characterized as a commitment to confer and study the problem, rather than a true strategy to achieve the desired level of security for global supply chains. It assigns no specific supply chain security responsibilities or timelines (other than a one year reporting deadline) and, so far, lacks any provisions for assessing progress toward the stated goals. Somewhat surprisingly, it does not mention any of the current US cargo security initiatives by name or directly address the ongoing container security controversy. Apparently, however, the strategy document was not meant to serve as actionable guidance. For example, the “path forward” section states that implementation “priority action areas” will be identified “during the development of the Strategy,” suggesting this is a work in progress. Presumably, therefore, federal maritime security specialists looking for actionable guidance will continue to draw on the 2007 Strategy to Enhance International Supply Chain Security, together with the other maritime security strategies prepared under the framework established by the 2005 National Strategy for Maritime Security.

New Models for Addressing Supply Chain and Transport Risk

The World Economic Forum (WEF) describes itself as an independent international organization committed to improving the state of the world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas. WEF is perhaps best known for the location of its annual meetings in Davos, Switzerland. Risk analysts and managers often begin their annual professional reading with the WEF’s annual Global Risks reports, distributed each January to coincide with the Davos meeting. For the past seven years the Global Risks project has studied and reported on fifty global risks that are grouped into five categories: economic, environmental, geopolitical, societal and technological. Using creatively designed graphics, the annual report ranks and plots global risks by a combination of their probability of occurrence and consequences. Increasingly, the report also analyzes linkages between and among the risks.

The Global Risk 2012 report included, for the first time, an examination of what the drafters term risk “centers of gravity” (COGs). The COGs are described as those risks of greatest systemic importance and which should therefore be the focal points for strategic interventions. A particularly sobering finding in the report that came out of its analysis of the 2011 Japanese disaster concerned the potential for global linkages between large scale destructive events (e.g., earthquakes, tsunamis, hurricanes) and two of the critical centers of gravity: critical systems failures (like the Fukushima meltdown) and governance failures. Those same linkages might well serve as pathways for a WMD or RDD attack to trigger critical systems and even governance failures.

Citing the 2010 volcanic eruption in Iceland, the 2011 Japanese earthquake and the massive floods in Thailand that same year (which inundated seven of that nation’s major industrial estates with 10 feet of water) as “recent examples of global disruptions that have tested the robustness of the supply chain and transport systems – and tolerance of uncertainty by organizations,” the Global Risks 2012 report drew attention to the WEF’s recently completed report on New Models for Addressing Supply Chain and Transport Risk. Like the 2012 Obama SCS Strategy, the WEF report on supply chain and transport risk highlighted the need to mitigate risk and build system resilience. The report identified five priority measures for mitigating supply chain and transport risk: (1) developing expert networks across business and government, (2) defining and measuring risk quantification to support effective decision making, (3) implementing effective legislation and incentives, (4) improving data and information sharing and (5) extending uses of scenario planning. The fifth measure – extending uses of scenario planning – is worth singling out for attention.

Extending Uses of Scenario Planning

Scenario planning was ranked as one of the top two enterprise risk management improvement priorities in the WEF report on supply chain and transport risk. Scenario planning has been practiced in at least some quarters since the 1950s. Royal Dutch Petroleum Company (Shell Oil) was one of the first major corporations to employ the tool. The Coast Guard has practiced scenario planning for some twenty years in what is today referred to as the Evergreen strategic planning process. In 7 Deadly Scenarios, Andrew Krepinevich describes early uses of scenario planning in the US Department of Defense.

Scenario planning pioneer, Peter Schwartz, author of The Art of the Long View, describes scenarios as “what-if” stories – “stories that can help us recognize and adapt to changing aspects of our present environment.” According to Schwartz, scenarios “form a method for articulating the different pathways that might exist for you tomorrow, and finding your appropriate movements down each of those possible paths.”

Although approaches and applications vary, scenario planners typically construct a collection of “scenario worlds” that, as a set, represent the broadest practicable variety of plausible futures for the organization. Planners then work with the organization’s leadership to prepare strategies adapted to each future scenario. The scenario-specific strategies are then circulated among the other scenario groups, with the goal of developing a single “robust” strategy that will be effective, or at least acceptable, across all of the future scenarios.

The 2012 WEF report on supply chain and transport risk observed that scenario planning is already being used effectively at the operational level. The drafters argue, however, that scenario planning has the potential to also play an integral role in reducing systemic risk across networks. They further urge that in an increasingly networked and interdependent world, scenario planning efforts must include multiple stakeholders, reaching across global, regional and sector levels.

Effective use of scenario planning by the Swiss energy and automation conglomerate ABB was held out as an exemplar in the WEF report. Scenario planning was credited with enabling ABB to identify the future risk of earthquakes in Japan and political upheaval in Egypt. To prepare for those possible future scenarios, the company trained its in-country management teams in crisis management and took part in simulations to test their systems, communications and teamwork against the scenarios – all well before the actual events occurred.

Concern for the security of global supply chains shows no sign of abating. The Obama Administration strategy document makes it clear that our concerns, and therefore our planning efforts, must extend beyond the more commonly discussed threats of terrorist attack or criminal activities. Natural and accidental technological disasters, armed conflicts and even large-scale political upheavals must be considered as well. The ubiquity of “global” supply chains (or, perhaps more accurately, global supply “networks”) means that proximity to the incident counts for little. A disaster in Japan or Indonesia can shut down assembly lines in Detroit and North Charleston, South Carolina.

Scenario planning can be a powerful tool for supply chain and transport risk managers at both the operational and strategic levels. Well-crafted scenarios can reveal the enterprise’s vulnerabilities and suggest countermeasures to enhance the system’s resilience. To invoke a familiar proverb, in an era when a kingdom might indeed be lost for want of a nail, the global economy can ill afford to overlook a planning tool that can help identify resiliency measures necessary to ensure the crucial nails will always be available. Supply chain risk managers will therefore want to closely study the WEF report, to learn how scenario planning might help them more effectively prepare for disruptions to the system that could cripple their organization.

Craig H. Allen is the Judson Falknor Professor of Law at the University of Washington. For the 2011-2012 academic year he is serving as a visiting professor at the US Coast Guard Academy and at Yale Law School. The views expressed are the author’s alone.

Port of Seattle Operating Income Up in 2011

The Port of Seattle, which has struggled in recent years with pay and spending issues, saw its operating income rise four percent and its capital spending drop significantly in 2011, according to a financial and performance report released March 6.

Port Commissioners and CEO Tay Yoshitani credited the numbers to a continued emphasis on cost control and increased efficiencies throughout the organization, among other factors.
“We’re pleased with these results, but the attention to controlling costs, particularly health care costs, must continue,” Yoshitani said.

The port, which also operates Seattle-Tacoma International Airport, maintains five divisions: Seaport, Aviation, Real Estate, Capital Development and Corporate.

Regarding the Seaport division, the highlights were that TEUs hit the two million mark in 2011, the second consecutive year for this to happen. Also, the port’s cruise business saw 885,949 passengers in 2011, which was 11 percent above the projected number.

Additionally, grain volumes were down 8.5 percent from 2010 and 8.6 percent compared to the budget; however, they still came in above five million metric tons for the seventh straight year.

The port’s operating income in 2011 was $215.1 million, $8.2 million above budget, and port-wide capital spending amounted to $200.1 million for the year, $87.1 million below the budgeted $287.2 million.

Overall 2011 operating revenues were about $484 million, roughly $9 million below budget, while total operating expenses were $268.7 million, about $17 million below budget.

“The best measure of an organization’s fiscal responsibility is how we manage financial resources when times are tough,” Commission President Gael Tarleton said. “The commission is responsible for stewarding public resources so that we can continue to invest in job creation and environmental programs, and we can only do that by managing the bottom line.”

Port of West Sacramento Awarded Rail Grant

The Federal Railroad Administration has awarded a grant of about $960,000 to the Port of West Sacramento for construction of a rail loop track that the port says should increase freight capacity and handling efficiency.

“We’re excited to now be moving forward with this important rail project, which is another important step in further strengthening our role as a competitive Northern California goods-movement hub,” Mike McGowan, Chair of the Sacramento-Yolo Port Commission, said.

As designed, the rail loop project would enable train switching and storage operations to take place solely on port property, plus significantly reduce surface-street blockages by freight traffic.

The planned rail loop is one of the latest a series of development projects at the port. In January, West Sacramento opened a new 5,000-foot rail track extension that links the port’s Main Terminal with a nearby cement and aggregate facility.

And later this year, it expects to launch a new federal stimulus-funded marine highway container-barge service with the ports of Oakland and Stockton.

The port is one of 12 recipients sharing about $17 million in funding under the FRA’s Rail Line Relocation and Improvement grant program, which funds projects that reduce the adverse effects of rail infrastructure on safety, motor vehicle and pedestrian traffic, community quality of life, or economic development.

Funding for the grants is made available through annual appropriations and requires a 10 percent contribution from project sponsors.

Hamburg Süd Begins Calling at Portland

The containership Port of Portland, Hamburg Sud on March 7 became the first vessel to call at the Port of Portland as part of a new weekly expanded service to the Mediterranean by German carrier Hamburg Süd.

“This is a big deal – especially for exporters in Oregon and throughout our region,” John Akre, the port’s terminal manager said. “This first ship represents a more frequent weekly service that will connect the Pacific Northwest and the Mediterranean with direct access to new ports in overseas markets.”

To mark the occasion, port officials boarded the vessel to meet the captain and crew, and presented a commemorative plaque.

The port says the addition of Hamburg Süd ships adds capacity while reaching new ports overseas through direct and feeder connections including the Far East, Middle East, Indian Ocean, Latin America and West Africa.
By bringing more ships to Portland and improving the regularity of the calls, the service should provide a more efficient, dependable and competitive option for shippers utilizing Portland, the port says.

Hamburg Süd’s port rotation for the newly configured North America West Coast service is: Cartagena; Manzanillo, Mexico; Los Angeles; Oakland; Seattle; Vancouver USA; Portland; Oakland; Los Angeles; Manzanillo, Mexico; Manzanillo, Panama; Cartagena; Caucedo; Tangier; Valencia; Cagliari; Livorno; Genoa; Marseilles-Fos; Barcelona; Valencia; Tangier; and back to Cartagena.

Stockton Rail Expansion to Open

A 5,800-foot rail expansion at the Port of Stockton, which could help double the port’s exports of iron ore and coal, is scheduled to open March 9.

The new tracks, which were added to east port interchange tracks, form a loop to enable inbound and outbound trains to operate without interfering with operations at the port’s east complex class yard.

The Port of Stockton currently handles three trains of export iron ore per week. It and the San Francisco Bay’s Port of Richmond are currently the only ports on the U.S. West Coast that handle export iron ore. Richmond handles two trains.

The extension’s expected to enable Stockton to begin receiving three more bulk unit trains of iron ore or coal per week, increasing the weekly capacity to six trains. In addition, the tracks are expected improve interchanges between UP, BNSF Railway and Central California Traction, and reduce rail equipment dwell time at the port.

The project was financed by the port, UP and terminal operator Metro Ports. The track, which was constructed by Industrial Railways Construction, was finished in 100 days, according to the port.

The port says it plans to employ up to 18 additional daily workers due to the expansion.

Tuesday, March 6, 2012

Appeals in Maritime Cases

By Marilyn Raia
marilyn.raia@bullivant.com



There is a common misperception that a party who loses at trial can simply file an appeal and get the proverbial “second bite at the apple.” In fact, the roles of the trial court and appellate court with respect to a case are quite different. For example, the appealing party may not present any new evidence to the appellate court nor argue issues not raised in the trial court. Rather, the appellate court may consider only the evidence presented during the trial. This article explains the basics of an appeal in a federal maritime case.


The Trial And Appellate Court Systems
Each state and territory has at least one federal trial court, known as a United States District Court. Some states like Oregon and Nevada have just one judicial district within their borders. Other states, such as California and Washington, have more than one. California has four and Washington has two.

Appeals from the United States district courts are heard by the United States courts of appeals. The states and territories are grouped into thirteen appellate circuits. The smallest circuit based on the number of judgeships is the First Circuit, which handles appeals from the district courts in Massachusetts, New Hampshire, Rhode Island, and Puerto Rico. The largest circuit based on the number of judgeships is the Ninth Circuit, which handles appeals from the district courts in California, Oregon, Washington, Nevada, Idaho, Montana, Arizona, Alaska, Hawai’i, Guam, and the Northern Marianas Islands.

A party has an absolute right to appeal a final judgment from the district court to the court of appeals. However, the right to appeal a judgment from the court of appeals to the next (and highest level) court, the United States Supreme Court, is discretionary. A party can file an appeal from a judgment of the court of appeals to the United States Supreme Court only if the Supreme Court issues an order, known as a writ of certiorari, permitting the appeal. A writ of certiorari is rarely granted. The Supreme Court may agree to consider a case when the holdings of the courts of appeal in different circuits are inconsistent on the same point of law or when an unusually important issue of constitutional law is involved, such as the 2000 presidential election case of Bush v. Gore, 531 U.S. 98 (2000).


Appealable Judgments and Orders
As a general rule, only a final judgment in a district court case can be appealed. However, there are a few exceptions. Under certain circumstances, an appeal is allowed in a maritime case before a final judgment is entered. Such appeal is called an “interlocutory appeal.”

The interlocutory appeal has its roots in the way maritime cases are often tried. In maritime cases, liability and damages issues may be tried separately. That is, the court first tries the liability issues and, if liability is found, the court then determines the damages. An appeal after the liability phase of the trial has the potential to eliminate the need to try the damages issues if the finding of no liability is upheld. Congress recognized the way maritime cases may be tried and enacted a statute allowing interlocutory appeals.

For example, RMS Titanic Inc. v. Wrecked and Abandoned Vessel, 2006 AMC 305 (4th Cir. 2006) involved the plaintiff’s alleged rights to artifacts salvaged from the wreck of the Titanic. The district court: 1) refused to recognize a prior decision of a French tribunal which awarded title to artifacts recovered in 1987 to the plaintiff; and 2) rejected the plaintiff’s claim of title to artifacts recovered at a later date. It did however, set the matter for a hearing to determine the monetary salvage award to which plaintiff would be entitled in lieu of the artifacts themselves. Plaintiff filed an interlocutory appeal, i.e. an appeal before a final judgment had been entered for the amount of the salvage award. The Fourth Circuit held the interlocutory appeal was proper because the district court’s order was a ruling on all liability issues and left open only the amount of the plaintiff’s salvage award.


Standards of Review
When an appeal is filed in the court of appeals, among the threshold issues the appellate court considers are whether the appeal was timely filed and if so, whether the trial court had jurisdiction over the case in the first instance. The appellate court then determines the standard of review, or how it is going to consider and analyze the judgment and rulings of the district court. There are different standards of review depending on the types of errors the appealing party contends were made by the district court. And, an appeal may involve multiple alleged errors necessitating a different standard of review for each error.

If the district court’s alleged error involved a question of law, the court of appeals reviews the case de novo, which means the court of appeal considers the matter “from scratch”. It can substitute its own judgment on the appealed legal issue for the district court’s judgment. The de novo standard of review does not require the court of appeals to give any deference to the district court’s reasoning or judgment.

If the district court’s alleged error involved a factual determination by the trial judge deciding a case in admiralty without a jury, the court of appeals reviews the judgment on a “clearly erroneous” standard. That means the court of appeals gives deference to the district court’s reasoning and judgment, and will uphold the judgment unless it is left with “a definite and firm conviction that a mistake has been committed.”

If the district court’s alleged error involved an evidence-related issue, the court of appeals reviews the judgment on an “abuse of discretion” standard. That means, the court of appeals defers to the district court’s ruling and will uphold the resulting judgment unless it finds the trial judge abused his or her discretion and prejudice resulted. If the error was harmless to the outcome of the case, the judgment will be affirmed.


Procedural Requirements
Appeals from the district courts to the courts of appeal are governed by special appellate rules. The rules dictate the deadlines for filing appellate pleadings as well as what pleadings must be included in the record and what pleadings may not be included in the record. Not all of the pleadings filed in the trial court are allowed to be in the appellate record.

The appellate rules also dictate the topics to be addressed in the appellate briefs, the type size, the maximum number of words, the binding of the brief, and even the color of the brief’s cover. The party filing the appeal is known as the “appellant”; the opposing party is known as the “appellee”. Both sides in a case may file an appeal. Sometimes non-parties to the case have an interest in the outcome of an appeal and may file a brief to have their point of view considered. Such parties are known as amicus curiae or “friends of the court”.

Lawyers who do not follow the appellate rules risk severe adverse consequences for their clients and themselves. Not filing the required notice of appeal within the time allowed results in a waiver of the right to appeal. Although a notice of appeal is usually just one sentence long, the failure to draft it properly may result in a waiver of the right to appeal. In All Pacific Trading, Inc. v. M/V Hanjin Yosu, 7 F.3d 1427 (9th Cir. 1993), the district court entered judgment against the vessel owner and the vessel itself. An appeal was filed. Although the name of the vessel was in the title of the case on the notice of appeal, it was not in the text of the notice as an appealing party. The Ninth Circuit held the vessel was not a proper party to the appeal, i.e. it had lost its right to appeal, because of that omission.

The failure to follow the formatting rules may result in the initial rejection of an appellate brief although often the court of appeals permits correction of minor mistakes in a timely filed brief.


Possible Results of an Appeal
There are many possible outcomes of an appeal. The most common result is no change to the district court’s judgment. Moreover, the court of appeals may affirm the district court’s judgment on any grounds supported by the trial court record even if not considered by the trial judge. Among the many other possible results of an appeal are 1) reversal of the district court’s judgment with instructions to the district court to enter a new judgment; 2) reversal of the district court’s judgment with instructions to the district court to hold further proceedings; or 3) affirmance of part of the district court’s judgment and reversal of another part of it. There is no time limit for the court of appeals to make its decision.

Appeals can be costly and time-consuming. Although a party has the right to appeal an adverse judgment from the district court, such appeal should not be thought of as a “mulligan” or a chance to completely re-try the case.

Marilyn Raia is of counsel in the San Francisco office of Bullivant Houser Bailey. She specializes in maritime and transportation law and can be reached at marilyn.raia@bullivant.com.

ILWU Expands Scope of Civil Rights Lawsuit

The International Longshore and Warehouse Union has expanded the scope of a federal lawsuit it filed last September alleging civil rights violations in connection with protests held at a Port of Longview terminal last summer.

Two more Cowlitz County law enforcement officials, Sheriff’s Department chief deputy Charlie Rosenzweig and county prosecutor Sue Baur, have been added to the suit, joining Longview Police Chief Jim Duscha, County Sheriff Mark Nelson, the county of Cowlitz County and the City of Longview as defendants.

The suit, which was filed with the US District Court in Tacoma, alleges that law enforcement officials overstepped their legal boundaries when arresting ILWU members and supporters on various misdemeanor and felony charges during and after the protests.

The union contends that police followed some protestors home and placed them under arrest there, instead of following the common practice of mailing misdemeanor citations.

The union’s lawsuit, which seeks compensatory and punitive fines against the city and county, does not list any dollar amounts.

A jury trial is scheduled to start in March of 2013, however the two sides also have been ordered into mediation to work on the possibility of settling the case out of court. Arbitration is expected to begin this spring.

Over the course of the protests, which lasted much of last summer, more than 200 members of ILWU Local 21 and their supporters were arrested. Most were charged with trespassing and disorderly conduct. So far, the dozens of arrests have resulted in a handful of convictions during jury trials, but also some acquittals. Other cases were dismissed for lack of evidence.

The pickets were part of a labor dispute between the union and EGT, the operator of a grain terminal at the port. The dispute stemmed from company using the services of a union other than the ILWU at Berth 9, a $200 million joint venture between Bunge Ltd., ITOCHU International and STX Pan Ocean.

Local 21 had contended that its contract with the Port of Longview required that the 25 to 35 jobs inside the terminal go to ILWU labor. The company, however, said its lease agreement with the port did not specify ILWU workers. Members of Operating Engineers Local 701 had been working at the terminal.

The issue was settled under an agreement ratified by the port Jan. 27. It says that all labor at the terminal must be dispatched through the Local 21 union hall. Notably, however, the agreement did not alleviate the ILWU from responsibility for estimated hundreds of dollars in damage inflicted on the terminal during the months of protests.

Kalama Terminal Operator Plans Expansion

The operators of a grain terminal at the Port of Kalama are reportedly planning a $50 million expansion project, which would include new rail lines and as many as 12 new storage silos.

Cowlitz County Building and Planning Department director Mike Wojtowicz said in a Feb. 29 interview with Longview, Washington-based The Daily News Online that county building officials have met multiple times with the owners of the port’s Temco terminal over the past few months about the project.

Temco is owned jointly by agricultural cooperative CHS Inc. and agricultural purchase and distribution company Cargill. The two companies also jointly operate grain terminals in Portland and Tacoma.

Officials with the companies have declined to discuss the project’s scope, cost or other details, but according to Daily News Online, the terminal owners have indicated that they’d seek bids for a general contractor in April, and construction would start between then and June.

The expansion project could be finished by early 2014, according to analyst Industrial Info Resources.

The Temco terminal is one of five at the Port of Kalama and is located on the port’s south end. The port is located in southwest Washington, about 30 miles northwest of Portland, Oregon and 120 miles southwest of Seattle. It specializes in bulk commodity exports.

Union Pacific CEO Taking Medical Leave

Union Pacific Corp. President and CEO James R. Young is taking a medical leave of absence in order to undergo treatment for recently diagnosed pancreatic cancer, the company announced March 2.

Young, 59, is a 34-year veteran of the railroad company. He became UP’s CEO on Dec. 31, 2005.

In his absence, the company’s executive vice president of marketing and sales, John J. Koraleski, has been tapped to serve as acting President and CEO.

“As Jim undergoes his treatment, he has the prayers and support of all 45,000 employees of the UP team,” Koraleski said in a statement announcing the move. “Our commitment to him, our customers, and our shareholders is continued strong performance of our company.”

Since joining the railroad in 1972, Koraleski has held a number of executive positions within the company, including Controller, Executive Vice President-Finance, and Chief Financial Officer of Union Pacific Railroad. He also has held positions in the railroad’s Information Technologies, Real Estate and Administrative departments.

“We are confident that our company will continue to provide great service to our customers while meeting the financial and safety objectives we have set for ourselves and our shareholders expect,” Steven Rogel, Union Pacific’s lead independent director, said.

Half-Million Dollars’ Worth of Cocaine Found in Shipping Container

About 64 pounds of cocaine, which law enforcement officials estimate has a street value of more than $585,000, was found in a cargo container at a terminal within the Los Angeles/Long Beach port complex last week.

US Customs and Border Protection officials announced March 2 that the drug had been found the day before concealed in the panels of an empty refrigeration container. The container originated in El Salvador with vessel stops in Guatemala and Mexico, and had been returned to the terminal after delivering a shipment of cantaloupes to a distributor in California, according to Customs.

The discovery came after customs officers targeted the container during routine operations. Drug sniffing dogs were then brought to the location, and they alerted handlers to one of the containers front panels.

Once the panel was removed, officers found 20 bricks of a white, powdery substance wrapped in plastic. The substance later tested positive for cocaine.

US Customs says it seized nearly five million pounds of narcotics in fiscal year 2011, 20 percent more than the previous fiscal year.