Coal Trial Gets Underway in S.F. Federal Court

  • Courthouse demonstration

Day one of trial of the coal industry-funded lawsuit against the City of Oakland has come to an end with both sides having scored points on their “to do” lists.

Before the trial got underway, the judge reiterated his guidance from last week’s summary judgment hearing: “The question in this case is whether substantial evidence supports the City’s decision. It either does or it doesn’t.”

Today, the plaintiffs called their first five witnesses:

  • Phil Tagami, president and CEO of California Capital & Investment Group, which owns OBOT, LLC, the plaintiff in the lawsuit;
  • Crescentia Brown, a senior project manager at Environmental Science Associates (ESA), authors of a report commissioned by the City to sum up the evidence of health and safety risks associated with the Oakland coal terminal;
  • Victoria Evans, ESA’s project manager for the report;
  • Patrick Cashman, Oakland’s former project manager for the Oakland Army Base Project;
  • Darin Ranelletti, Oakland deputy director of planning.

OBOT’s attorneys began the trial by calling Cashman and Ranelletti, two employees of the City of Oakland.  Both answered questions about the background of the project.

Attorney Meredith Shaw tried to get Cashman to agree that “the Sierra Club can make or break” a politician in Oakland, pursuing a theme of bias or political pressure that the judge has already deemed irrelevant.

OBOT’s lead counsel, Robert Feldman, sought to establish through his cross-examination of Ranelletti that the City had applied standards of the Bay Area Air Quality Management District in conducting its environmental review of the marine terminal in 2012.  A principal contention of OBOT’s is that the City’s coal ban was not justified because existing laws and enforcement mechanisms would ensure adequate protection for West Oakland residents and workers.

In response to questioning by Gregory Aker of the City’s legal team, Ranelletti explained that the City’s environmental review did not give the project a blanket clean bill of health, but rather that the project would have “significant and unavoidable” environmental impacts.

Phil Tagami testified that OBOT was required by the 2012 review to comply with many environmental requirements including the City of Oakland’s Standard Conditions of Approval-and Mitigation and Monitoring Reporting Program.  Tagami said his company would have to submit an air quality plan to BAAQMD and a fire safety plan to Oakland Fire Department, obtain 76 permits, and comply with hundreds of specific rules.

Tagami also testified that OBOT had voluntarily agreed to comply with South Coast Air Quality Management District Rule 1158 which provides that, while on the premises of a coal handling facility within SCAQMD’s southern California jurisdiction, rail cars must be covered with tarps or “alternative method of control proven effective in preventing visible fugitive PM emissions escaping from the railcar.”

OBOT’s counsel has suggested that OBOT’s agreement to comply with the SCAQMD rule would have limited OBOT to receiving coal shipped in covered coal cars. However, Rule 1158, which is likely to come up again in the trial, requires no such thing. Tagami acknowledged that covered coal cars have not yet been implemented anywhere in the United States.

Tagami also testified that OBOT would deploy air monitors and if they detected PM 2.5 in excess of BAAQMD emissions thresholds and shut down operations.  When questioned by the City’s attorney, he agreed PM 2.5 would already be in the air and there would be no way of vacuuming it out of the air. He conceded that, if operations were to be stopped midstream, trains would be sitting on the tracks increasing the risk of spontaneous combustion of coal dust.

OBOT’s final witnesses for the day were Brown and Evans, both of whom worked for ESA which prepared one of three reports released in June 2016 that supported the City’s decision to ban coal storage and handling at the West Gateway. OBOT’s complaint, briefs, and arguments in court have all concentrated their firepower on attacking the ESA report on various grounds.

Brown was the City’s principal contact at ESA and worked on defining the scope of ESA’s engagement. Evans, who has worked on air quality issues for 40 years and coordinated ESA’s report, spent the longest time on the stand of any witness. In the morning session, Feldman sought admissions that the City rejected a proposal that ESA conduct an independent evaluation of air quality issues and instructed ESA to focus on the record.

Brown resisted the suggestion that the City wanted a report that would support a coal ban.  She testified instead that the contract between ESA and the City specified that ESA was to assist the City in determining whether the coal terminal would result in substantial endangerment, but ESA was not to make the ultimate determination. Feldman posed questions designed to suggest that ESA did not do a thorough job and left out facts that undermined its conclusions.

At last Wednesday’s hearing, Judge Chhabria stated that he had found the report by the Public Health Advisory Panel “quite a bit more reliable and convincing” than the ESA report, but the City appears ready to spend a considerable portion of its time defending the ESA report.

This afternoon, Aker walked Evans through some of the key calculations in the ESA report which had been attacked by OBOT at last Wednesday’s summary judgment hearing.  Evans explained, in clear terms, how ESA went about its task, looking at public comments to see which ones had citations to scientific references.  She recalled specifically the team’s looking closely at reports by Dr. Bart Ostro, Dr. Phyllis Fox, and Deb Niemeier.

Judge Chhabria posed some questions of his own to Evans.  He was especially curious about how the coal dust leakage figure of 6 tons per year escaping into West Oakland was arrived at.  He wanted to know if ESA had assumed that coal dust leaked at the same rate throughout the hundreds of miles from Utah to Oakland.  Evans said ESA’s calculations were based on an average figure for leakage published by the rail industry.  She cited research in Washington State that showed considerable dispersion of coal dust even at the end long journeys.  She did not make reference to the highly gusty conditions in the Bay Area, particularly in the summer when the Bay is marked by wind-whipped whitecaps, nor did she mention the dust that would be newly exposed when the coal was dumped out of the bottom of the railcars making them especially likely to leave dust in the first few miles of their trips back to Utah.

Evans did testify coal dust can come from the top and bottom of coal cars and accumulate on ballasts.  She noted that ESA’s estimate of the amount of coal dust released may be low because it didn’t factor in re-entrainment which occurs when another train travels along the same tracks and stirs up dust left by earlier trains. When asked why the ESA report did not mention possible mitigation such as surfactants and covered coal cars, she stated that it was because there were no scientifically peered-reviewed articles or government studies showing the effectiveness of surfactants and covered coal cars.

Earlier in the day, in an attempt to show that fugitive coal dust was not big deal, Tagami had testified that the Bay Bridge Toll Plaza is a major emitter of PM 2.5.  During last week’s summary judgment hearing, the judge also wanted to be able to make comparisons to determine how big a deal emissions of PM 2.5 from coal is compared to other activities such as how much PM 2.5 comes from Bay Bridge toll plaza, the building of the A’s stadium, building of a highrise? The City has not yet offered testimony that unlike other pollutants, PM 2.5 from coal dust contains mercury, lead, cadmium, arsenic and chromium, a few of these heavy metals being carcinogenic.

At the end of the day, the City announced it would be filing a midtrial motion for judgment based on OBOT’s failure to submit evidence showing that the ban on storage and handling of coal conflicts with any rule, regulation, or policy that was locked in place by the Development Agreement between the developer and the City.

This motion appears to be based on a question raised by the judge at the beginning of last week’s summary judgment hearing. The parties have stipulated that the Development Agreement was enacted under Government Code section 65866, California’s statute governing development agreements.

Government Code section 65866 states that, unless a development agreement provides otherwise, the land use rules and regulations that apply to a project covered by a development agreement are those in effect when the development agreement is entered into.  However, it also provides that 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.”

Last Wednesday, 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 does not need to show substantial evidence to support its ban.

The trial continues tomorrow.  After tomorrow, the trial will continue Friday and, if necessary, next Tuesday.


The East Bay Express (Darwin BondGraham) and East Bay Times (David DeBolt) have also published articles on what happened today at the trial.