The fate of the long-running “coal war” in Oakland may come down to who a judge decides is to blame in a contract dispute between the city and one of its most prominent real-estate developers.
In closing arguments Wednesday, attorneys for the city said developer Phil Tagami and corporate partner Insight Terminal Solutions failed to meet key deadlines in the construction of a large marine terminal that would ship bulk goods at the former Army Base in West Oakland.
Tagami, however, contends that the city intentionally stalled the project in order to prevent the transport of coal through the harbor — having failed once before to ban coal from passing through Oakland altogether.
The pollutant has proven to be politically toxic in Oakland. Environmental advocates have warned for years that coal dust mixed with the open air could worsen West Oakland’s air quality.
The ensuing legal and public fight has put construction of the terminal on hold since it was first approved about a decade ago.
“The city knew that its contracts with the plaintiffs in applicable federal law allowed the plaintiffs to (ship) coal,” said Tagami’s lawyer, Barry Lee. “For political — rather than legal — reasons, city leaders refused to accept that outcome.”
With the eight-week trial now wrapped, Alameda County Superior Court Judge Noël Wise will make a ruling in the coming weeks after assessing a complicated timeline of contract negotiations, agreements and delays.
The key arguments rest on the idea of “force majeure,” a common legal clause in contracts that prevents either party from being held liable when a sudden event — such as a change in the law — interrupts the agreement.
Danielle Leonard, an outside counsel representing the city, said Wednesday that Tagami lagged behind on building the terminal because he was hunting for a sublease that could subsidize some construction costs.
She cited testimony from former Mayor Libby Schaaf and other city officials, who said during the trial that they wanted to see the project move forward.
“There is simply no evidence of a city political conspiracy to block” the terminal, Leonard said, “because that is simply not what happened.” She added later that the delay was due to Tagami’s “economic self-interest.”
Judge Wise will consider an exhaustive set of evidence that shapes the timeline of how the contract fell apart, along with the two sides’ wildly different characterizations of the documents.
At one point, the two sides disagreed whether some railway improvements made by Tagami’s team indicated that he was trying to reach his milestones, or if that bit of infrastructure was irrelevant to the original development agreement.
The terminal in question, if it is ever built, would store bulk commodities that arrive by rail from Utah — where the state legislature has dished out $53 million for the Oakland coal project — before shipping them overseas.
The facility would only store coal, and not burn it, but environmentalists have pressured Oakland to divest entirely from the pollutive industry.
A study in Richmond this year found that rail conveyance of coal increased the number of fine particles, or particulate matter 2.5, in the atmosphere because of how coal dust mixes into the air.
Emergency room visits or hospitalizations for asthma, meanwhile, are two times higher in West Oakland than the rest of Alameda County, according to a 2018 county study, which activists have ascribed to poor air quality.
The larger issue of whether Tagami can ship coal was already decided in 2020 when a court determined the city hadn’t provided enough evidence to ban the transport of coal over health concerns.
And while the latest lawsuit centers around the technical details of a contract dispute, its larger implications could effectively determine the future of coal in Oakland — a focal point of the closing argument by Tagami’s attorney.
“The city simply said, ‘You’re not going build this terminal,” Lee said, “‘because we know once you build it, coal could be handled — and that is politically unacceptable.’”
Source: www.mercurynews.com