Coal Trial Ends: Undecided, Judge Awaits Post-Trial Briefs and Final Argument

  • Supporter of City of Oakland carries "Coal Kills" sign

Post-Trial Briefing Schedule Order

The three-day trial of developer Phil Tagami’s lawsuit against the City of Oakland ended Friday without a clear signal from Judge Vince Chhabria as to how he will rule. Chhabria’s ruling is not expected until after he has had a chance to review posttrial briefs and other papers to be filed by the parties in the coming weeks and holds a final hearing tentatively set for March 28.

The City made its case Friday calling a number of expert witnesses to rebut the plaintiff’s contentions that the City breached a 2013 development agreement by banning the storage and handling of coal at a proposed terminal to be built near the Bay Bridge toll plaza.

At issue is a plan to ship up to 10 million tons of coal from Utah to Asia each year, passing through Oakland.  A provision in the development agreement allowed the City to impose health and safety regulations adopted after the agreement was signed provided the City held a public hearing and based its decision on “substantial evidence” that failure to impose the regulation would create a substantial danger to the health or safety of workers, residents, and others near the terminal.

Judge Chhabria ordered the three-day trial to help him sort out whether the City had substantial evidence to back up its ban on coal adopted by a unanimous City Council vote in July 2016.

Bowie Resource Partners, the largest coal producer in Utah, paid over $1.75 million to finance the lawsuit against the City.  Fronting for the coal producer was OBOT, a corporate shell run by Tagami and his partners.  OBOT obtained a 66-year lease on the City’s 34-acre West Gateway waterfront property under a 2012 agreement that enabled Tagami to transfer rights to develop the property to a company with no assets provided it was affiliated with California Capital and Investment Group (CCIG), of which Tagami is president and CEO.

With the support of Bowie, OBOT filed suit in December 2016, alleging that, in addition to violating its contractual rights, the ban on coal storage and handling violated the Commerce Clause of the United States Constitution and was preempted by three federal laws. The judge decided to table the constitutional and preemption claims and proceed with a trial solely on the alleged breach of development agreement.  He is not expected to rule on the federal claims if he decides in favor of OBOT on the contract claim.

The City’s witnesses focused on the risks to public health and safety from coal dust leaking from train cars and the terminal facility and from fire and explosion at a facility so near the Bay Bridge.

Dangers of Fire and Explosion

Some of the most dramatic testimony on Friday came from UC Berkeley engineering professor Carlos Fernández-Pello who offered a scientific assessment of fire and explosion risks associated with handling of coal.

In assessing risks, he said there are two issues: “What are the chances?  What are the consequences?”

In assessing the risk, he said coal presents high risks with respect to fire and explosion because it self-ignites, it releases methane which can itself burn, and it has a lower ignition temperature than other fuels. He emphasized that the facility could operate for 66 years, a very long time.  Meanwhile, the consequences of a fire or explosion would be “catastrophic,” being located adjacent to the Bay Bridge and with prevailing winds carrying products of combustion directly into West Oakland neighborhoods.

Dispelling notions that coal terminals never catch on fire, Fernández-Pello cited fires at the now-shuttered Port of Los Angeles coal terminal in 2000 and 2001; a 2014 fire in New South Wales, Australia; and a 2015 fire in Scotland.

“Los Angeles was an enclosed facility and still you had fire, two fires,” he testified.  According to Fernández-Pello, the developer’s assurances that dust would be kept out of West Oakland by the use of enclosures might actually lead other problems. “Enclosure of coal increases risk of combustion.  Enclosure increase accumulation of dust because it cannot escape.”

He addressed testimony by OBOT’s fire and explosion expert who stated that it would take 10 joules of energy to cause an explosion of coal dust by saying that sparks from mechanical impact (steel with cement, a bulldozer, or a mechanical device within the terminal) could produce 10 joules of energy.

Fernández-Pello also underscored the difficulty of putting out a coal fire.  Approaches that might work with other kinds of fires cannot be used with coal fires.  In particular, coal fires cannot be put out by spraying water on them because of the danger of a steam explosion.  Bituminous coal from Utah burns very hot, which is why it is used for power generation.

On cross-examination, the City’s fire and explosion expert conceded that he did not “quantify” the risk of fire and explosion. He also conceded that he could not say that any of the fires at coal facilities had involved bituminous coal, but clarified that the type of coal was not specified in reports.

Coal Dust Blowing Into West Oakland

Day 3 of the trial also brought to a head the battle over the City’s analysis of coal dust blown into West Oakland from rail cars and the terminal.  The City called to the stand Dr. Ranajit Sahu, an air quality expert with a Ph.D. from California Institute of Technology; Dr. Nadia Moore, a toxicologist; and Zoe Chafe, an epidemiologist currently engaged in post-doctoral studies at Cornell University.

Sahu, Moore, and Chafe all contributed to the City’s portrayal of coal as a substantial risk to the health and safety of those who live and work in West Oakland and provided strong rebuttals of points raised by OBOT.

Sahu defended ESA’s calculation of coal dust emissions which OBOT’s counsel had called “made up.”  A major controversy raised by OBOT concerned a factor called “threshold friction velocity,” which refers to the speed at which wind will carry dust into the air.  The EPA’s guide contains two previously measured threshold friction velocities for coal dust; one is based on coal dust sitting on a concrete platform and the other is based on an “encrusted” coal pile.  A pile of coal that been compacted and sprayed develops a crust that minimizes dust whereas coal dust sitting on a concrete platform is much more sensitive to wind.

Neither is a perfect fit, but these are the tools that EPA has provided for estimating coal dust dispersal.  In its calculations, ESA used the 0.54 meters/second figure for coal dust sitting on a platform whereas OBOT’s expert testified that the 1.12 meters/second figure for encrusted coal was more appropriate.

When asked why he did not agree with OBOT’s expert, Sahu explained that all of the studies of coal dust’s threshold friction velocity were wind tunnel experiments in the late 1980s before the menace to health of the more dangerous and invisible PM 2.5 had been fully recognized.  The experimenters were literally looking for the threshold wind speed that would move much larger visible coal particles.

Sahu explained that piles of coal become encrusted because the coal is stationary unlike coal in a rail car. “Nobody in their right mind would call that a stationary pile,” he said. In the case of the rail, rail yard, and terminal operations, there are 100 tons of coal in each car being jostled this way and that.  Vibration, wind scouring, buffeting of rail cars, and settling of coal in the cars would prevent a crust from developing or being maintained.

Two days before, OBOT’s rail expert David Buccolo testified that he had never seen coal dust blow out of the bottom of train.

“You can’t see PM 2.5,” Sahu declared. The fine particles called PM 2.5 are 30 times narrower than a human hair and invisible to the naked eye.

Nadia Moore, a toxicologist, provided a panoramic and microscopic overview of the dangers of PM 2.5  “Pollution research didn’t begin until we realized we had a serious problem,” she said, recalling the Great London Smog of 1952 which killed 4,000 people in one fell swoop.

Moore then discussed the process by which federal air pollutant standards are set.  The Clean Air Act requires EPA to set National Ambient Air Quality Standards (NAAQS) for pollutants considered harmful to public health and the environment.  Moore testified that studies show adverse impacts to human health from concentrations of PM 2.5 below the NAAQS standard of 12 micrograms per cubic meter (which is 20% higher than the World Health Organization’s standard).

Moore’s testimony rebutted a repeated theme of OBOT’s that the City failed to consider whether the existing standards and agencies would be adequate to protect health.  OBOT’s counsel is apparently hoping the judge will picture dedicated public servants aggressively protecting the public health, but people in the back of the courtroom looked at each other with amazement as the EPA headed by Scott Pruitt was promoted in this fashion.

Although previously listed as a witness for the City, the City ultimately did not call upon Dr. Andy Gray, an air dispersion modeler, to testify on Day 3. Earlier in the trial, Judge Chhabria appeared sympathetic to OBOT attorney Robert Feldman’s argument that Gray’s testimony was inadmissible because Gray’s air dispersion model had not been presented to the City prior to the City Council’s vote to ban coal in 2016. Attorney Greg Aker argued that the air dispersion model should be admitted because it “confirmed” the analysis in the ESA report, but the judge was not moved.

Air dispersion modelling is very expensive way (potentially costing $40,000) to connect raw emissions at the site of a pollution-generating activity to exposures that will be experienced by people who are some distance away.  It starts with the raw emissions (in, say, tons per year) at the source and creates a mathematical model of the resulting concentrations in the air (in, say, micrograms per cubic meter) in surrounding areas.  Wind and topography may cause some places that are near a source of pollution to still have clean air and some places that are miles away to be heavily polluted.

The City contends that it doesn’t take a elaborate mathematical model to know that the dust emitted from handling coal in West Oakland will wind up in neighborhoods where we people live.  Anyone with a smidgen of experience of San Francisco Bay’s wind patterns knows the strong prevailing wind that whips up whitecaps and carries fog through the Golden Gate on summer afternoons when air pollution levels are already at their highest. Inevitably, tons of coal dust that pile up along the tracks and near the terminal over the next 66 years of OBOT’s lease are going to be blown east into the residential neighborhoods. This has been the experience of other neighborhoods adjacent to coal-handling facilities and railways, including those monitored in a Washington State study.

Although the ESA report itself did not include an air dispersal analysis, the Public Health Advisory Panel report included an estimate of likely PM 2.5 concentrations and provided a scientific opinion that “the annual average of PM 2.5 would be near to or exceed the federal and state standards for PM 2.5 and would clearly exceed the [World Health Organization] guidelines of 10 micrograms per cubic meter.” In considering whether the City had substantial evidence to support its ban on coal storage and handling, the judge is supposed to consider the qualified expert opinions that were actually before the City in June 2016.

What Next?

In a bench trial, the judge, unlike a jury, does not go off to a room to sit by himself, deliberate, and reach a verdict.  Judge Chhabria’s decision may not arrive for a month or more. And before that, he will give the parties another opportunity to fill his inbox with another batch of papers.

On Monday, Judge Chhabria issued a scheduling order asking each side to submit three types of concluding documents:  proposed findings of fact, post-trial briefs, and evidentiary objections. The proposed findings of facts and evidentiary objections are due February 9, as is OBOT’s post-trial brief.  The City of Oakland and intervenors Sierra Club and San Francisco Baykeeper are to respond with a joint brief by February 23.

Sierra Club, perhaps to be joined by the City and SF Baykeeper, also plans to bring a post-trial motion based on Government Code section 65866.  The judge’s order set the deadline for filing of that motion as February 9, with opposition by OBOT due February 23 and a reply brief by Sierra Club due March 2.

The judge scheduled a final hearing, if necessary, for 10 a.m. on March 28, 2018.

Sierra Club’s motion, if granted, would make the three days of trial all but irrelevant.

Sierra Club’s motion is based on a question raised by the judge at the beginning of the summary judgment hearing. Government Code section 65866 appears to set a lower standard for the City to apply its coal ban to OBOT than the one contained in the development agreement which required the City to base its ban on a finding that failure to impose the ban would result in a substantial danger to the health and safety of the workers and neighbors of the coal terminal.  But section 65866 says a development agreement “shall not prevent a city … from applying new rules, regulations, and policies which do not conflict with those rules, regulations, and policies applicable to the property as set forth herein.”

At the summary judgment hearing on January 10, the Judge asked the City why they have not argued that the ban on coal storage and handling does not “conflict with” any rule, regulation, or policy in effect in 2012 and, therefore, the City did not need to show substantial evidence to support its ban.  The trial was held to determine precisely whether the City could meet the substantial evidence test.

OBOT will claim that the coal ban conflicts with the existing law in 2012 that did not prohibit shipment of coal.  The City will argue that there is no conflict at all because no law that existed in 2012 explicitly promised the right to ship coal.  The judge will have much to ponder having invited this argument with his own question nearly two weeks ago.

Based on the judge’s scheduling order, it appears that the judge’s written decision in the case is unlikely to issue before April.

Featured photo by Jahahara Alkebulan-Maat.