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Private Equity Firm Seeks Records In LA Port Project Lawsuit

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A private equity firm is demanding the Port of Los Angeles release over 2,000 documents that allegedly show the local longshore union's sway over port decision-making and its role in a failed container storage yard project that is at the center of a lawsuit.

Attorneys for Saybrook Capital filed the motion in Los Angeles Superior Court Tuesday as part of their ongoing lawsuit against the port over the Harbor Performance Enhancement Center (HPEC).

Saybrook is the primary backer of HPEC, which would have stored up to 4,200 wheeled containers and provided the port with 1.2 million twenty-foot equivalent units (TEUs) in off-terminal capacity.

Los Angeles-based Saybrook received a $130 million funding commitment from Macquarie Infrastructure Partners based largely on the port's board providing exclusive negotiating rights in 2016 to Saybrook for developing the 142-acre site.

But Saybrook's lawsuit alleges that Executive Director Gene Seroka called off the project in 2018 after Saybrook and the International Longshore and Warehouse Union (ILWU) Local 13 could not reach an agreement on who would be the drayage drivers for the site. Saybrook's lawsuit looks to overturn the port's decision about the project.

The Port of Los Angeles declined to comment on the latest motion. As a landlord port, it does not contract directly with ILWU for labor. Instead, the Pacific Maritime Association, a consortium of marine terminal operators, handles that. Other businesses at the port also contract directly with employees.

The site of the Harbor Performance Enhancement Center. (Photo: Google Earth)

The original lawsuit's allegations rest mostly on conversations between Saybrook and port executives about the project and the ILWU's role.

But the latest motion claims port executives were actively discussing the project with the ILWU and that the union blocked it, despite their role not being a condition of the negotiating rights. 

The motion goes on to say that the port is misusing privilege claims to keep out text messages, emails and other correspondence that would prove the allegation.

The port's "document production contains numerous suspicious gaps, and (the port) has withheld production of over 2,000 documents based on bad faith privilege claims," the motion said.

"While HPEC worked diligently over two years to move the Project forward, Seroka and others at POLA (Port of Los Angeles) secretly plotted with certain members of the ILWU to kill the Project and to use HPEC's environmental work to benefit POLA's own plans and HPEC's Competitors."

The motion includes references to various exhibits already provided to HPEC's attorneys, including a text message from Seroka to another port official about discussing "a vision of the project and ILWU partnership."

In another exhibit, HPEC's attorneys list a text message from Seroka to another port official asking for a dinner meeting with ILWU officials about the HPEC site. Also listed are a message from a port official to another executive at a marine terminal that the "ILWU wants the dray from the terminals to HPEC. (Saybrook) will have to fight that battle."

HPEC's attorneys further allege in the motion that when the first roadblocks to the project started appearing in early 2018, HPEC received assurances its project was still on track. But port executives were also discussing alternative uses for the site, such as chassis storage.

Image Sourced from Pixabay

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