Oakland Bulk & Oversized Terminal, LLC v. City of Oakland

The Ninth Circuit Court of Appeals denied petitions for panel rehearing and rehearing en banc of the court’s decision affirming that the City of Oakland could not bar coal-related operations at a terminal being developed at a former Army base due to an agreement between the City and terminal’s developer that existing regulations would apply to the facility.

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In a split opinion, the Ninth Circuit Court of Appeals affirmed a district court ruling that invalidated a City of Oakland resolution adopted in 2016 that applied a new ordinance barring coal-related operations at bulk material facilities to a rail-to-ship terminal being developed at a former army base. The Ninth Circuit found that the district court had not clearly erred when it found that adoption of the resolution violated a 2013 agreement between the City and the developer of the terminal. The development agreement provided that existing regulations would apply to the facility unless the City determined “based on substantial evidence” that failure to apply new regulations “would place existing or future occupants or users of the Project, adjacent neighbors, or any portion thereof, or all of them, in a condition substantially dangerous to their health or safety.” The district court—which allowed the developer to present evidence that had not been before the City Council—determined that Oakland breached the agreement because the City lacked substantial evidence that the coal operations posed a substantial health or safety danger. On the “pivotal” issue of standard of review, the Ninth Circuit concluded that the case should be reviewed as a breach of contract case, with deference given to the district court’s findings, instead of as an administrative law proceeding in which the court would grant deference to the City’s health and safety findings. The Ninth Circuit then found that the district court’s factual findings regarding the inadequacies in Oakland’s determinations regarding particulate emissions and other harms associated with coal operations were not clearly erroneous. The Ninth Circuit did not address greenhouse gas emissions or global warming, which the district court had briefly discussed and rejected as a legitimate basis for the coal ban. The Ninth Circuit also held that the district court did not abuse its discretion in denying environmental groups’ motion to intervene as of right. The appellate court upheld the district court’s determination that the groups’ contention that the development agreement was invalid was outside the scope of their permissive intervention and also rejected their argument that the agreement’s restriction on new regulations was limited to land-use regulations. The dissenting judge would have reversed because in his view the trial court erred by admitting evidence about the health and safety effects of coal handling that was not submitted to the City.

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