Developers Attorney Says Anti-Coal Vote Could Lead to Lawsuit
The attorney for the developer of a marine terminal that’s being
built at the former Oakland Army Base is threatening to sue the city of
Oakland because of the City Council’s vote Monday night to ban the handling
and storage of coal in the city.
At its meeting Monday, the council voted to approve both a
permanent ban on the transport, transloading, handling and storage of coal
and petroleum coke at bulk materials facilities or terminals in Oakland and
to specifically ban the handling and storage of coal at a terminal at the
former Oakland Army Base that is being built by developer Phil Tagami and
business associate Jerry Bridges.
The City Council said a report from the city’s environmental
consultant, Environmental Science Associates (ESA), provides the city with a
scientific and legal basis for banning coal.
The report says that railcars being unloaded at the terminal could
send coal dust wafting over two neighboring schools, a child care center,
commuters at the Bay Bridge toll plaza and parks near Interstate Highway 880.
But David C. Smith, an attorney for the Oakland Bulk and Oversized
Terminal, the developer of the terminal site, warned the City Council in a
strongly worded letter that he submitted before the meeting that a 2013
development agreement is a city law and a duly-enacted ordinance and the city
would violate it by banning coal.
He wrote that such a vote would constitute “conscious and
intentional breach of their oath of office,” a “pronouncement to the world
that Oakland is not a trustworthy or reliable place to invest or do
business,” and would expose the city and its general fund to “hundreds of
millions of dollars in liability.”
That would include “the return of almost $150 million to the state
of California and hundreds of millions more in damages to the developers of
the project,” Smith wrote.
Smith wrote, “Certain elected officials are committed to ‘do
anything’ to keep coal (and apparently a long list of yet-to-be-disclosed
other politically disfavored commodities) out of Oakland” in order to win
votes but “they must also realize and own that such actions breach existing
and binding legal obligations, exposing the city to potentially unprecedented
Smith accused the city of engaging in a paper trail dump by
waiting to release a 225-page staff report on the coal issue late Friday
afternoon, the last working day before the council’s meeting on Monday night.
He also wrote, “The staff report makes no effort to reconcile how
a report (the environmental study) dated the exact date of the staff report
itself could possibly serve as the evidentiary support for that staff
Smith alleged, “The ESA report is openly biased, giving undue
credence to comments opposing the project and summarily dismissing expert
testimony and evidence that coal can be and is daily transported safely
throughout the United States today.”
He wrote, “The paper trail dumped last Friday was clearly an
attempt to justify a course of action that had long-since been committed to.
While that may accomplish a political outcome, it is only the first steps
towards an unfortunate legal outcome.”