Kentucky Judge Vacates “Final Judgment” Against Oakland on Developer’s Big Money Claims
On Halloween, U.S. District Court Judge Benjamin Beaton took over the massive damages suit brought by would-be coal terminal developer Insight Terminal Solutions (ITS), removing ITS’s handpicked bankruptcy court judge who had entered “final judgment” against the City of Oakland four days previously.
Although United States Bankruptcy Judge Joan Lloyd had not awarded damages against the City, her decision was described by local journalists as a “massive legal blow” against Oakland and a sign that the City might have to pay “at least $230 million.” Industry publications reported that Oakland was running out of options and might have to pay upwards of $670 million while “fighting to close a nine-digit budget deficit.”
On Friday, November 21, 2025, Judge Beaton vacated the bankruptcy judge’s “final judgment” and he will soon entertain a motion by the City challenging the bankruptcy court’s 45-page “Findings of Fact and Conclusions of Law.” The City has until November 26 to file its motion, which will likely renew previously filed arguments that the entire case should be thrown out of court. The City is expected to argue that Oakland, rather than ITS, is entitled to summary judgment in its favor as a matter of law.
This turnabout represents the first good news out of Kentucky for the City of Oakland since ITS filed its lawsuit. The bankruptcy judge ruled against the City on a host of issues large and small, amassing an ignominious record of judicial overreach and, according to the City’s filings, major legal errors that the City will attack in its upcoming motion.
Judge Beaton vacated Judge Lloyd’s “final judgment” on two grounds. First, he concluded that Judge Lloyd lacked authority to render “final judgment” because bankruptcy judges only have such authority in cases that arise in or under federal bankruptcy laws, whereas this case involves claims for interference with contract and prospective economic advantage that arise solely under California business tort law. Judge Beaton noted that “nothing before this Court provides any reason to conclude that these claims arise ‘in’ or ‘under’ federal bankruptcy law.”
Judge Beaton also struck Judge Lloyd’s “final judgment” for the separate reason that she had left the matter of damages for future resolution at trial. By definition, a “final judgment” has to dispose of the entirety of a claim, both liability and damages. Leaving the question of damages unresolved meant that the “final judgment” was not final at all, a bush-league legal error. ITS conceded, as it had to, that the “final judgment” could not stand for this reason alone and asked the judge not to address the issue of the bankruptcy judge’s lack of authority. Rebuffing this request, Judge Beaton underscored that “a final judgment based on the Bankruptcy Court’s authority to resolve core disputes seems both unsupported and likely unsupportable.”
Although Judge Beaton’s vacatur ruling does not directly call into question the merits of Judge Lloyd’s “Findings of Fact and Conclusions of Law,” it paves the way for Judge Beaton’s independent reconsideration of Judge Lloyd’s factfinding and legal reasoning. Judge Beaton is a Columbia Law School graduate, a member of the conservative Federalist Society, and a former clerk of the late Supreme Court Justice Ruth Bader Ginsburg, who hired the conservative Beaton as one of her five clerks precisely to make herself “work harder.”
Responding to the latest turn in the Kentucky litigation, No Coal in Oakland issued this statement:
“ITS’s frivolous lawsuit was forum-shopped to a bankruptcy judge in Louisville, Kentucky, who had no business handling the case in the first place. We are glad to see that a higher-ranking judge has rejected the judgment entered by the bankruptcy judge. We hope this is a sign that the City will get a fairer shake as the case moves along. Meanwhile, our community remains united against coal. We doubt rational investors will have any interest in building a coal export terminal in Oakland, but the hedge fund operator who owns the development rights may still hope to profit from threatening Oakland and the whole Bay Area with a toxic coal project. More than 90 organizations and 1,000 local residents have signed on to an open letter asking him to change course.”
Graphic at top: Judgment by Nick Youngson CC BY-SA 3.0 Pix4free “Vacated!” added by NCIO.