Jacob Klein
The battle to keep coal out of Oakland hit a new milestone with the conclusion of the contract dispute trial between the City of Oakland and the would-be developers of a coal terminal, Oakland Bulk and Oversized Terminal (OBOT). Though the trial has ended with a decision allowing developers to continue their plans with the terminal, the City of Oakland has already filed an appeal, staying the decision and maintaining the pause on development for the time being.
The case before Judge Noël Wise had both parties claiming that the other was responsible for breach of contract. The City argued that the developers had failed to meet certain milestones and deadlines, and thus wanted to end the contract. The developers argued that the City had blocked their ability to complete the requirements, thus delaying the construction and operation of the coal terminal, costing the developers money and depriving them of the profits they’d hoped to make.
In the initial phase of the trial, the liability phase, Judge Wise sided with the developers, finding the City liable for breach of contract. This led to the remedy phase where the court decided what the appropriate remedy should be for the breach. The developers argued for a stunning $160 million in damages, an amount that would have a detrimental effect on the City’s finances.
Fortunately, the judge rejected the developer’s claim for this astronomical sum of money for damages and instead gave the developers a choice: a much smaller amount of money, $318,000, OR reinstatement of the lease, extension of the construction deadline, and ability to develop.
The developers ultimately selected the reinstatement of the lease. However, it remains uncertain what their real drive is. When one of the original developers, Insight Terminal Solutions, went bankrupt, it was brought up by LA-based hedge funders. Since then, it doesn’t seem to have been a good return on investment. Do they really want to get into the dying coal market? Are they hoping to sell it off to another bidder?
Regardless, the future remains uncertain as this moves on to the appellate courts. The City hopes to reverse the liability decision.
Sierra Club remains committed to working with community partners and decision-makers to make sure that there is no coal dust in Oakland polluting the air and harming the public. To get involved and stay up to date as this next phase of the trial unfolds, sign up at addup.sierraclub.org/campaigns/keep-coal-out-of-oakland.