Oakland Strikes Back Against Developer’s Lawsuit; City Files Motion to Dismiss

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Labor, Faith, & Community Leaders Announce Campaign to Support City of Oakland in High-Stakes Legal Battle with Coal Terminal Developer

Click to hear KPFA news report on NCIO Press conference

Today, the City of Oakland filed a motion to dismiss the high-stakes lawsuit, Oakland Bulk and Oversized Terminal LLC v. City of Oakland, brought by a developer seeking to build a $250 million coal export facility on Oakland’s waterfront.

Last summer, the City Council voted unanimously to bar the use of a marine terminal on City-owned land for the storage and handling of coal.  If the proposed bulk terminal is used for this purpose, up to ten million tons of coal could be transported through Oakland each year.

The developer of the terminal, Phil Tagami, filed suit in December to overturn the City Council’s vote, which was widely supported by Oakland residents.   The city has retained the law firm of Burke, Williams & Sorensen as co-counsel to defend and represent the city.  United States District Judge Vince Chhabria will hear arguments on the motion to dismiss at 10 a.m. on April 20, 2017 at the federal courthouse at 450 Golden Gate Avenue in San Francisco.

Expressing support for the City, representatives of labor, faith, and community groups held a press conference today in front of the Rotunda Building in Frank Ogawa Plaza, the site of the office of developer Phil Tagami, who filed the lawsuit.  The conference was organized by No Coal in Oakland to express public support for the City of Oakland and demand that Tagami withdraw the lawsuit.

Community Leaders Call On Tagami To Find Better Use for West Gateway

Stakeholders in this legal battle, which could have national implications for local authority over public health, safety, and environmental hazards, released the following statements:

“America has come too far making steps to clean up its act with environmental pollution,” said  Ken Chambers, pastor of West Side Missionary Baptist Church. “California and especially the Bay Area have taken leadership in reducing pollution and converting to alternative energy sources. I urge Mr. Phil Tagami to drop his lawsuit. And furthermore I ask the federal court to stand with the City of Oakland in supporting their ban on shipping coal from the West Oakland former Army Base.”

“Phil Tagami has always relied on the use of public funding and public land for his commercial ventures,” said Margaret Gordon, Co-Director of the West Oakland Environmental Indicators Project. “It is outrageous that he has turned around and sued the city that has helped his business over many years.  If he built a coal terminal, West Oakland residents would be particularly exposed to additional toxins.  This is on top of our current health disparities–of the recent increase in asthma cases in Oakland,  86% were in the flatlands and 14% in the hills.  The West Oakland community, like other Oakland residents, supports the City Council’s vote to ban coal and hopes Phil Tagami will drop his lawsuit.  The city has so many other needs for the resources that it will be spending to defend itself for protecting us.”

“The people have spoken,” said Laurie Manning, Pastor of the Skyline Community Church. “Our city council has spoken. Our mayor has spoken. Oakland has rejected this dangerous climate killing coal terminal.  We pray that Phil Tagami will drop his misguided lawsuit.”

“AFSCME 444 has taken a strong position through resolutions and actions voicing concern about the impacts of Climate change on its members and the community it serves,” said Eric Larsen, Member Relations Secretary of AFSCME Local 444. “This includes firm opposition to the proposed Coal export terminal at the Port of Oakland, which would impact local communities with coal dust pollution and exacerbate climate change by delivering more coal to be burned. AFSCME Local 444 strongly supports Oakland City Council’s ban on coal at the terminal.  We urge the developers to drop their lawsuit and find a healthier use for the property they are leasing from the city.”

“This lawsuit poses a grave threat to local authority over environmental hazards,” said Ethan Buckner, campaigner at Stand.earth. “The City of Oakland boldly and rightfully affirmed its commitment to environmental justice by rejecting Phil Tagami’s attempt to treat West Oakland as a sacrifice zone for his benefit. We stand beside the City of Oakland, alongside all municipalities in California and beyond that are using their rightful legal authority to protect residents from environmental harm.”

“As an Oakland resident and leader of faith communities committed to responsible climate action I am profoundly troubled by Phil Tagami’s decision to sue our city for its actions banning coal from our community and protecting the health and safety of our common home,”  said Susan Stephenson, Executive Director, California Interfaith Power & Light. “What kind of neighbor would want to inflict suffering and harm on our region’s vulnerable residents, children, the elderly, people with respiratory illnesses? What kind of global citizen would want to undermine any community’s ability to pursue health and environmental protections? California Interfaith Power & Light represents tens of thousands of people of faith and we urge our neighbor Phil Tagami to drop this outrageous lawsuit and instead work with us to build a robust and inclusive green economy in Oakland.”

“Bay Area residents have made crystal clear that they’re ready for the clean energy revolution,” said Ella Teevan, Northern California organizer for Food and Water Watch.  “Residents have decisively demanded a move away from fossil fuels, from rejecting the proposed coal export terminal in Oakland to banning fracking in Alameda County. Shipping coal and petcoke out of Oakland would only exacerbate the climate crisis, when we need a rapid transition to 100% renewables. We urge Mr. Tagami to drop the lawsuit and respect the forward-thinking vision of Oaklanders.”

“Coal in Oakland will have far-reaching effects beyond poisoning our community,” said Wendy Park, senior attorney with the Center for Biological Diversity’s Oakland office. “Coal mining on America’s public lands destroys forests, watersheds and wildlife habitat. Coal burning anywhere spews toxic pollutants and fuels climate change. We stand with the City of Oakland in its defense of a livable planet for all beings.”

City Moves To Dismiss Breach of Contract Claim

OBOT LLC’s complaint has three claims:

  1. The City’s ban on coal violates the Commerce Clause of the U.S. Constitution by excessively interfering with interstate commerce.
  2. The City’s ban on coal is preempted by three federal statutes:  the Interstate Commerce Commission Termination Act, the Hazardous Materials Transportation Act, and the Shipping Act of 1984.
  3. The City breached its contract which the developer claims gave him a vested right to store and handle coal.

Today, the City moved to dismiss the third claim–for breach of contract.  It did not move to dismiss the two federal claims which will remain to be litigated in further proceedings if the court grants the motion to dismiss.

The City’s motion advances a two-part argument to justify dismissal of the breach of contract claim:

  1. OBOT LLC did not acquire a vested right to store or handle coal and petcoke at the OBOT terminal because the 2014 Development Agreement did not expressly permit storage or handling of coal or petcoke nor does its freeze of the City’s zoning or land use regulations then in effect apply to the City’s regulation forbidding storage or handling of coal or petcoke, because that regulation is not a zoning or land use regulation, but an addition to the City’s Health and Safety Code.  Since OBOT LLC has no vested right to store or handle coal, the City did not breach its contract with OBOT LLC.
  2. If the court disagrees with the City’s characterization of the regulation as a health and safety measure and determines that the City’s regulation is a zoning or land use regulation (as OBOT LLC asserts), the breach of contract claim must still be dismissed because it was filed on December 7, 2016, beyond California’s 90-day statute of limitations on claims challenging a zoning or land use regulation.

OBOT LLC will challenge both of these arguments in an opposition brief due in mid-March.  The City will have the opportunity to file a reply and Judge Chhabria will then hold an open public hearing on the motion on April 20.

No Coal in Oakland will be there!