Court Puts Developers’ Quest for Damages on Hold

  • Appeal Road Sign by Nick Youngson CC BY-SA 3.0 Alpha Stock Images

Second Lawsuit Stalls as Court of Appeal Weighs Anti-SLAPP Motion

An Alameda County Superior court judge has issued a stay of developer Phil Tagami’s lawsuit seeking millions of dollars in damages against the City of Oakland and a reinstatement of the terminal’s lease which Oakland terminated in November.  The case will be on hold until the California Court of Appeal can decide whether the lawsuit is barred by California’s Anti-SLAPP Statute.  The stay could last as long as two years as the Court of Appeal reviews the City’s argument that the lawsuit is a disguised attack on speech and petitioning protected by the First Amendment of the U.S. Constitution.

Anti-SLAPP laws are designed to provide for early dismissal of meritless lawsuits filed against people for the exercise of First Amendment rights. The acronym “SLAPP” stands for “Strategic Lawsuit Against Public Participation” – a phrase coined by two law school professors in the late 1980s. They identified a trend of retaliatory lawsuits brought to intimidate and silence opponents and critics who had spoken out in the public sphere, typically on land use and land development issues. California is one of 29 states with anti-SLAPP laws protecting public participation in fights against developers.

Oakland Bulk and Oversized Railroad LLC (OBOT) and Oakland Global Railroad Enterprise LLC (OGRE) filed the now stalled lawsuit against the City in December 2018.   The City responded by filing an anti-SLAPP motion to strike the lawsuit and award the City legal fees under the expedited procedures of the Anti-SLAPP Statute.  At the same time, the City filed two other motions: a motion to dismiss the lawsuit (called a demurrer) and a motion to strike portions of the complaint.

In earlier orders, Superior Court Judge Jo-Lynne Lee granted the latter two motions in part.  As is routine for such motions, the court gave OBOT and OGRE permission to file an amended complaint to try to overcome the flaws in their first complaint.  She also set aside the anti-SLAPP motion as premature and said she would rule on its merits at some point after the new complaint was on file along with further motions to test its legal adequacy.

The City’s lawyers, a team from Altshuler Berzon, saw red at this postponement of the anti-SLAPP motion.  The point of an anti-SLAPP motion is to protect First Amendment rights by stopping a lawsuit at its earliest stage. Delay in ruling on an anti-SLAPP motion would undermine the very purpose of the Anti-SLAPP Statute.

The City filed an immediate appeal of Judge Lee’s decision to postpone consideration of the anti-SLAPP motion.  On May 23, Judge Lee issued a tentative order staying the case while the appellate court considers the City’s argument.  On Friday, June 7, she confirmed her order, putting the case on hold for as long as it takes to resolve the appeal.

This is a major blow to the plans of Wolverine Fuels, formerly Bowie Resource Partners, the coal company that has been scheming to build a coal export terminal in West Oakland since 2014. Based on the 2017 California Court Statistics Report, the statewide median time for resolving an appeal is about 17 months.

To win its anti-SLAPP motion the City must prevail in two tests. First, the City must establish that the developers’ claims arise from protected speech or petitioning. Speech and petition have been broadly construed by the courts to ensure that powerful interests cannot chill opponents with the threat of lawsuits.  If the City meets the first test, it is up to OBOT and OGRE to come forward with sufficient facts to demonstrate a probability of success if the case were to proceed to discovery and trial. The City can rebut OBOT and OGRE’s probability of success by marshalling uncontested facts that reveal the developers’ claims to be lacking in merit.

If the Court of Appeal decides in favor of the City, the lawsuit will be dismissed and the City will be entitled to legal fees and court costs.

Featured Photo:  Appeal by Nick Youngson CC BY-SA 3.0 Alpha Stock Images