Don’t Believe Everything You Read in The New York Times
The Times’ November headline suggested opposition to coal might drive Oakland into bankruptcy. Tales of the City’s death were greatly exaggerated.
There’s a saying in journalism, “If it bleeds, it leads.” Screaming headlines and sensational reports of mayhem, disasters, death, and danger evoke far more interest in readers than balanced and sober reportage. When it comes to Oakland, it’s not just tabloids and late night newscasts that habitually accentuate the negative. Even the newspaper of record can miss the mark.
Belatedly reporting on Oakland’s broadly popular 10-year struggle to resist construction of a massive coal export terminal on our San Francisco Bay waterfront, The New York Times parlayed a recent rogue judgment issued by a handpicked bankruptcy judge in Kentucky into a tale of the wolf knocking at Oakland’s door. (NYT, Nov. 24, 2025, republished East Bay Times, Nov. 26, 2025, p.1)
On October 27, Bankruptcy Judge Joan Lloyd issued a judgment of liability against Oakland and in favor of Insight Terminal Solutions, a paper corporation that holds a sublease to develop the 19-acre West Oakland site of the proposed terminal. Lloyd held that Oakland committed two California business torts – interference with contract and interference with prospective economic advantage – against ITS when it terminated local developer Phil Tagami’s master lease to the West Gateway in 2018.
Although Lloyd presumably understood she had no authority to try the case on damages, she suggested in her opinion that Oakland would likely end up owing ITS between $230 million and $654 million, before interest. She even falsely insinuated that the City had already conceded the lesser amount.
“A Stand Against Coal Could Push Oakland Toward Bankruptcy,” blared the Times headline, adding, “Courts [sic] say the city must now pay hundreds of millions of dollars.” Environmentalists and liberal politicians were to blame for pushing a financially precarious city towards ruin, according to the Times. No mention that environmentalists were part of a much broader coalition of labor, faith, and community activists who united in 2015 and remain united today against the use of public land for a polluting coal terminal. No mention of the artful deception by the developer who claimed no interest in coal in 2013 yet negotiated a secret deal with a coal company in 2014. No mention of three detailed studies which exposed serious health and safety risks of the coal terminal, recently confirmed by a peer-reviewed U.C. Davis study.
Did the Times story meet the Times standard of “fit to print”? Not exactly. Not even close actually.
“Courts” say the city must now pay? Only one judge, presiding in a bankruptcy court with dubious, contested jurisdiction, said the city would end up owing money to ITS. Last year, a California court rejected similar damage claims by Phil Tagami’s Oakland Bulk and Oversized Terminal, ITS’s landlord, calling them “speculative” and incapable of meeting the standard of “reasonable certainty” required for a lost profit award under California law. Judge Lloyd’s views on liability face multiple levels of review and may command little or no deference from higher courts.
Indeed, before the Times article went to press, the legal winds in Kentucky had already begun blowing in a different direction. On October 31, United States District Judge Benjamin Beaton had removed the case from Judge Lloyd’s hands. Then, on November 21, three days before the Times story went to press, Judge Beaton vacated the centerpiece liability judgment authored by Judge Lloyd.
Lloyd’s entire findings of fact and conclusions of law now face independent review by the higher-ranking district court and the case may be thrown out within months.
What’s Kentucky Got to Do With it?
Many people in Oakland wonder how a massive lawsuit against the City wound up in Kentucky in the first place. This requires a bit of explanation.
The plaintiff is not Phil Tagami but Insight Terminal Solutions, a hedge-fund owned company, once headquartered in Kentucky, whose only asset is the sublease of 19 acres of Oakland waterfront property known as the West Gateway. ITS’s landlord is Phil Tagami’s Oakland Bulk and Oversized Terminal, LLC (OBOT). In 2018, the City terminated OBOT’s lease, effectively terminating ITS’s sublease as well.
In 2018, OBOT promptly sued the City for damages and reinstatement of the lease. Rather than join OBOT’s suit as it could have, ITS funded OBOT’s lawsuit and sat on the sidelines awaiting the outcome. A lengthy trial ensued, ending in a split decision.
In early 2024, Alameda County Superior Court Judge Noel Wise reinstated OBOT’s lease (and, in effect, ITS’s sublease) and gave them extension of the deadlines to get construction underway. Notably, she denied OBOT’s $159.6 million damages claim calling the massive projection of lost profits too speculative to merit an award. Lost profit damages are rarely awarded to non-existent businesses.
The Times quoted a first-year city councilmember as saying, “We lost, lost, lost, and we continue to lose,” and a law professor as saying, “It’s an amazing losing streak.” Yet the Times failed to mention that the only court to try the developer’s case on damages issued a ruling that strongly favored the City. It was only after that dramatic loss that ITS filed its “billion-dollar” lawsuit against the City with the same theory of lost profits that failed in California.
When the big money payoff that Tagami and ITS hoped for did not materialize in California, ITS looked for a friendlier forum, a bankruptcy court in Louisville, Kentucky. It filed claims in the same bankruptcy court that in 2020 had approved the reorganization plan by which ITS came to be owned by hedge fund magnate Jon Brooks.
City Renews Challenge to Kentucky Lawsuit
Upon withdrawing the case from bankruptcy court, Judge Beaton set a briefing schedule for Oakland to challenge any aspect of the bankruptcy judge’s rulings. On November 26, Oakland filed a comprehensive motion arguing that the City, not the developer, is entitled to summary judgment. The motion presents four threshold defenses, any one of which, if the court concurs, would require dismissal of ITS’s case. Though these defenses may sound technical – lack of jurisdiction, time bar, government immunity, and claim preclusion – they are ground rules that prevent abuse of the litigation process. Courts enforce them routinely.
Here’s a quick dive into the City’s four “showstopper” defenses:
First, the bankruptcy court had no jurisdiction to hear ITS’s claims. The tortious interference claims are based solely on California state law, not bankruptcy law. Bankruptcy courts exist to hear cases in or under bankruptcy law or closely related to ongoing bankruptcy proceedings. ITS’s bankruptcy was resolved five years ago with a reorganization plan put forward by the private equity firm that now owns ITS. If ITS intended to pursue any claims against the City, it needed to do so while the bankruptcy proceedings were underway or, at the very least, to list the claims as a potential asset to keep them alive for further litigation. ITS did neither.
Second, ITS filed the Kentucky lawsuit years too late. California tort claims must be brought within two years or they are time-barred. The City’s cancellation of OBOT’s master lease – the trigger of ITS’s claims – took place in 2018. ITS waited until 2024 to sue.
Third, the California Government Claims Act immunizes the City from business tort claims of the sort advanced by ITS. Under California law, municipalities can only be sued as provided by statute and ITS’s claims fit into no category authorized by statute.
Fourth, ITS’s claims are barred by claim preclusion – the rule that litigants do not get “two bites at the apple” – i.e., they cannot file a new lawsuit on the same underlying matter if they are not satisfied with the result of the first. Claim preclusion bars claims that were actually raised in a prior lawsuit, but also claims, theories, and remedies that could have been raised. ITS had every opportunity to litigate its claims in California when OBOT sued the City in 2018 after the City terminated OBOT’s lease.
Finally, in addition to the four threshold defenses, the City’s motion for summary judgment takes aim at the bankruptcy court’s questionable evidentiary rulings and ITS’s failure to establish numerous required elements of the business torts.
Supplementing the strength of its legal defenses, another factor may boost the City’s chances of success in the next phase of the Kentucky litigation.
The fact that Judge Lloyd rubber-stamped everything ITS put in front of her may ultimately prove to be a disservice to ITS’s cause. Judge Lloyd copied nearly verbatim the proposed orders drafted by ITS’s legal team, a practice for which she was admonished by the Sixth Circuit Court of Appeals in August 2025 in an unrelated case.
“[A]ppellate courts have repeatedly expressed displeasure with a lower court’s decision to use one party’s proposed ‘findings of fact and conclusions of law’ when ruling against the other side,” warned the Sixth Circuit. Adopting a party’s draft as the judge’s own opinion may signal laziness, incompetence, or bias. At the very least, it reflects a court’s failure to exercise independent judgment and that is something no reviewing court appreciates.
How Judge Beaton will evaluate the case remains to be seen. His analysis will be revealed when he rules on the City’s renewed motion for summary judgment early next year. If Judge Beaton winds up granting the City’s motion, will the Times publish a story about how a courageous city on the West Coast bested the efforts of the coal industry, a duplicitous developer, and a hedge-fund operator to inflict massive economic damage on the city for daring to protect its residents and workers from a monstrous piece of polluting fossil-fuel infrastructure?
That, too, remains to be seen.
Featured image by Angela from Pixabay