OAKLAND, Calif. (CN) — Oakland may soon be on the hook to pay a developer up to $160 million, or otherwise to allow the company to resume work on a controversial, long-stalled bulk shipping terminal at Port of Oakland.
Parties delivered closing arguments on Friday in the second phase of a bench trial, which has been sitting for five months in the nearby suburb Hayward. In a tentative ruling the judge found the city breached the deal with the developer, Oakland Global Rail Enterprise, not the other way around.
Oakland Global Rail attorney Barry Lee argued that Alameda Superior Court Judge Noël Wise has seen enough evidence since the remedy phase began on Tuesday to grant either proposed remedy scenario: monetary damages or finishing the project.
The developer’s first scenario calls for a declaration of non-responsibility on its part for the contract breach, and collecting $159,600,000 from Oakland. The second, along with the declaration, would allow the company to resume work on the terminal for more than two years, and award it $19,000 to cover legal damages.
Lee made the case that the judge should rule to allow Oakland Global Rail to choose between two remedies.
“There is no legitimate dispute” of the developer getting a no-fault declaration with either remedy, he argued. “We have proved plaintiffs’ right to both remedial alternatives.”
In his closing argument, Lee emphasized that the bulk terminal is still viable for the port with “billions of tons” of coal ready to be shipped through the terminal.
He accused the city of spending “substantial” amounts of public funds on litigation to fight its own deal, under the principle of preventing coal pollution, while claiming it thought the project wasn't viable as proposed.
“If the city really believed the project was not viable," he offered, "why not just let it fail?”
Danielle Leonard, an attorney for Oakland, said the developer delivered very little evidence to back up its the damages calculation, beyond using an expert witness who was experienced in quantifying damages in commercial litigation. In fact, she argued, quantifying the financial profits from shipping coal through a terminal that is not yet operational could not be reliably calculated, especially as California and other countries pivot to decarbonization and renewable energy sources.
She also criticized a lack of tangible records to justify the damages amounts the developer presented; with no more than “unsupported assertions” from one witness relying on evidence that could not be admitted, she said, “what you’re left with is a house of cards.”
Wise did not indicate how she may rule, but she expects to release a tentative statement of decision before Christmas Day. Both sides will then have a week to respond or object, before her final ruling expected by the first week of January.
The legal proceedings have centered on the developer’s intention to allow transport of coal ash at the terminal, which the city opposed. It subsequently lost a federal court battle over a citywide ban on coal shipments.
Oakland Global Rail testified that it lost more than $148 million in profits after the city introduced an ordinance to ban coal at its terminals. The city, which countersued for breach of contract in 2020, said the developers hurt the project by missing construction milestones while scheming to close a lucrative coal export deal.
The developer's CEO and leaders have declined multiple requests to comment on the litigation.
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