Oakland, Port Developer Head to Trial in Dispute Over Coal Ban

Activists opposed to a coal facility in Oakland rally outside U.S. District Court in San Francisco on Jan. 10, 2018. (Tara Siler/KQED)

A lawsuit challenging Oakland’s ban on coal shipments in and out of the city — a measure the City Council passed to head off plans to handle the fossil fuel at a proposed new port facility — is heading to trial in San Francisco on Tuesday.

Last week, U.S. District Court Judge Vince Chhabria denied motions by both sides in the case to make a quick ruling on the suit filed by one of Oakland’s best-known business figures. Instead, Chhabria outlined the rules for a narrow and speedy bench trial.

Developer Phil Tagami brought the suit in December 2016 on behalf of one of his companies, Oakland Bulk and Oversized Terminal LLC,  five months after the City Council passed the coal ban.

The council acted after it learned that Tagami had partnered with counties in Utah that planned to move millions of tons of coal and petroleum coke, an oil refinery byproduct, by rail to the Oakland facility and then ship the products to Asia.

The suit alleges that the ban violates the Constitution’s commerce clause, various federal laws regulating interstate commerce and hazardous materials, and the city’s 2013 development agreement that Oakland struck with Tagami.

In his ruling last week, Chhabria announced he would hear evidence this week only on the breach of contract claim in Tagami’s suit and consider the constitutional and federal law issues later, “if necessary.”

While Tagami’s complaint states the Oakland Bulk and Oversized Terminal would transfer bulk commodities that could include coal, his company’s original development agreement with the city never mentions coal.

The agreement does, however, state the city has the right to apply its own regulations adopted after the agreement was signed if there is “substantial evidence” the project would place nearby residents in a “condition substantially dangerous to their health or safety.”

How “substantial” the danger of coal dust is to the West Oakland community will be at the crux of the trial.

West Oakland has a disproportionately high rate of respiratory illness and other physical ailments linked to its close proximity to the Port of Oakland, as well as truck and rail traffic.

A September 2015 report by Tagami’s firm said the $260 million facility would minimize pollution by using covered rail cars, underground transfer compartments and enclosed conveyor systems for moving coal from trains to ships.

Lawyers hired by Oakland city officials argued in court last Wednesday that the proposed technologies  are either ineffective or not even in use by the industry.

The disagreement over potential health and safety controls was aired during the hearing, with Judge Chhabria expressing skepticism about the technology outlined by Tagami’s attorney, Robert Feldman.

The judge acknowledged the dangers of coal dust and said the city has a right to “police” the health and safety of its residents. But he said he wants the city to provide more information demonstrating how substantial the danger is relative to other projects.

“What seems to be missing is how big a deal is this,” said Chhabria.

Opponents of Tagami’s project maintain no level of coal dust is acceptable to a community already suffering from heavy industrial pollution. The city cites several reports backing that assessment — though the judge questioned the science behind one of them, an analysis by Environmental Science Associates, which concluded the terminal would worsen air quality.

California Attorney General Xavier Becerra filed an amicus brief on behalf of the city citing West Oakland’s poor health outcomes, including high rates of asthma, congestive heart failure and shorter life expectancy rates.

Erica Maharg, an attorney with San Francisco Baykeeper, which is intervening on Oakland’s side in the case,  says she’s confident the city made a “well-grounded decision” to protect residents who are “already overburdened with pollution.”

The trial is expected to last several days.


Oakland, Port Developer Head to Trial in Dispute Over Coal Ban 16 January,2018Tara Siler


Tara Siler

Tara reports and sometimes anchors for KQED news. She covers a range of issues from community-police relations to local politics. Tara started out in community radio in the Bay Area, where she was raised. She eventually moved to Washington DC where she covered Congress for eight years for Pacifica and Monitor Radio. Her stories have also been heard on NPR’s All Things Considered, Morning Edition and The World.

Tara lives with her husband in Oakland– where they raised their two sons. She enjoys spending time with her large family, gardening and hiking in the Oakland hills with her dog.

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