Suit On Oakland Coal Handling, Storage Ban Set For January 2018 Trial

A cargo terminal developer’s lawsuit against the city of Oakland for preventing coal from being shipped through the city will go to trial in January 2018 and a pair of environmental groups may intervene in the matter, a US District Court judge declared last Thursday.

Judge Vince Chhabria rejected the city’s motion to dismiss the case, which Oakland Bulk and Oversized Terminal LLC filed December 7, five months after the City Council passed an ordinance barring handling and storage of coal and petroleum coke at a shipping facility the company plans on a harborside parcel that the Army abandoned in 1999.

Chhabria, who is with the US District Court, Northern District of California, also granted intervenor status to the Sierra Club and San Francisco Baykeeper, which support the coal and petcoke ban.

The judge said he wanted the case to go forward on an “aggressive, accelerated” basis, as OBOT had requested. The parties agreed to a schedule of September 15 for expert disclosure, September 29 for fact discovery cutoff, October 2 for rebuttal expert disclosure and November 1 for expert discovery cutoff. In addition, a hearing on cross-motions for summary judgment is scheduled fir December 14.

OBOT claims the coal and petcoke ban is a breach of contract and illegally bucks federal authority over foreign and interstate commerce, US–foreign shipping and hazardous materials transportation.

In its dismissal motion, the city said the breach claim was “not viable” because the lawsuit wasn't filed in timely fashion and the pact “did not expressly provide a vested right to store or handle coal or coke at the Terminal,” nor did it “state that OBOT has the right to handle ‘any and all’ non-containerized bulk goods.”

The plaintiff failed to meet a 90-day deadline for filing and serving a complaint challenging a local government’s land-use decision, the response stated. Chhabria suggested at Thursday’s hearing that the deadline applied instead to amending or modifying the development agreement between OBOT and the city.

He also seemed skeptical toward the city’s argument that the contract did not give OBOT the right to store or handle coal or petcoke at the terminal, since the ban was not in place when the contract was signed.

Chhabria did not buy OBOT’s argument that allowing the Sierra Club and Baykeeper to intervene would bring, in attorney Meredith M. Shaw’s words, “additional discovery, additional motions, additional delay.”

If what they introduce goes beyond the case’s scope, he will disallow it, the judge said. Shaw and co-counsel Robert P. Feldman are with the multinational law firm Quinn Emanuel Urquhart & Sullivan LLP.

Chhabria said initially that he was somewhat hesitant to allow the organizations into the case solely on the ground that they supported the ordinance, “but it does seem like you bring some expertise to the table.” And he was receptive to attorney Colin O’Brien’s notation that their interests were narrower than the city’s. 

The lawsuit creates an economic interest for the city that the Sierra Club and Baykeeper do not have, said O’Brien, who is a staff attorney with the environmental advocacy group Earthjustice.

While mentioning that the lawsuit claimed federal law violations, the city’s responding brief did not attempt to refute that argument. Equally noteworthy, however, is that OBOT is employing a private law firm to pursue the matter. OBOT’s top executive, Phillip H. Tagami, has not responded to Hoodline’s query on whether he has contacted the US Attorney’s office on the matter.

Authors of the city’s response are City Attorney Barbara Parker; Chief Assistant City Attorney Otis McGee Jr.; Supervising Deputy City Attorney Colin Troy Bowen; and attorneys Kevin D. Siegel, Gregory R. Aker and Christopher M. Long of the law firm Burke, Williams & Sorenson LLP.

The City Council’s vote to bar coal and petcoke from the proposed shipping terminal came in the wake of studies and citizen complaints raising public-health and environmental issues. The council found persuasive arguments that coal dust and diesel exhaust particulates would cause or worsen respiratory and cardiovascular troubles, cancer and infectious diseases, and would exacerbate climate change.

Citizen activists in West Oakland, which stands to experience the heaviest environmental effects if coal and petcoke are handled and stored at the shipping terminal, have told Hoodline they might well attempt to block rail-borne coal shipments physically if OBOT prevailed in court.

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Suit on oakland coal handling storage ban set for january 2018 trial