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Harbor Performance Enhancement Center Files Notice of Claim Against Port of Los Angeles and City of Los Angeles: Filing alleges fraud, civil extortion, and other wrongdoing

On Friday, December 13th, the Harbor Performance Enhancement Center (HPEC), for years hailed by Port leadership as the Port’s “signature project,” filed a Notice of Claim (a prerequisite to litigation) which implicates the Port of Los Angeles (POLA) and certain leaders of the International Longshore and Warehouse Union (ILWU) in a coordinated multi-year scheme to harm HPEC.

HPEC was selected in 2015 to develop land that has been vacant nearly 2 decades, signed a series of agreements, engaged in years of negotiations, and devoted thousands of man hours and millions of dollars on project planning and environmental approval processing. Despite this, POLA recently attempted to terminate the Project—a termination which, as explained in HPEC’s Notice of Claim, HPEC believes stems from backroom deals between the Port, the ILWU, and potentially an ILWU employer. As stated in the Notice of Claim, despite the fact that ILWU labor participation at the site was never mentioned in POLA’s bid documents nor in any of the Project agreements between POLA and HPEC, POLA Executive Director Gene Seroka advised HPEC that the “[ILWU] runs the Port,” demanded that HPEC grant ILWU exclusivity over the Project, and ultimately terminated the project without a single public hearing. In June, HPEC filed a writ petition in Los Angeles Superior Court seeking to reverse Seroka’s decision. The Court promptly rejected a City of Los Angeles request in September to dismiss the case.

As detailed in HPEC’s Notice of Claim, HPEC believes it has uncovered a disturbing level of collusion between a government agency, a labor union, and individuals that, if true, could result in substantial financial liability for all potential defendants. Today’s filing comes on the heels of a recent judgment in a multi-year antitrust case in Portland, Oregon. That case, ICTSI Oregon, Inc. v. International Longshore and Warehouse Union, ended last month in a $93.6 million jury verdict against the ILWU that has sent shock waves through the union up and down the West Coast.

“The allegations in HPEC’s Notice of Claim fit the pattern from the ICTSI case,” said attorney Amanda Gamblin of Schwabe Williamson & Wyatt who represented ICTSI in the Portland case. Under statute, the Notice of Claim filed today gives POLA and the City 45 days to respond to the allegations before HPEC can file its lawsuit.

In late November, HPEC filed a motion seeking access to more than 2,000 documents that the City and Port are withholding from production based on claims of privilege. HPEC believes these documents are directly related to, and further shine a light on, bad faith dealings on the part of POLA. The Court’s ruling on this motion is expected in mid-January.

“The bottom line is that we’re in this for the long-haul. Our project is an economic and environmental game-changer, creating tens of thousands of jobs for the region and we want to see it built,” said Jonathan Rosenthal, CEO of HPEC. “As explained in our recent filings, it’s become abundantly clear that the Port is intent on hiding something. Despite winning the RFP, having signed agreements and spending millions of dollars on the project, we never had a chance – given the apparent deals being made behind our backs.”
Source: HPEC

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