1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

QUINN EMANUEL URQUHART & SULLIVAN, LLP 

 Robert P. Feldman (Bar No. 69602) 

 bobfeldman@quinnemanuel.com 

 David Myre (Bar No. 304600) 

 davidmyre@quinnemanuel.com 

 Eliyahu Ness (Bar No. 311054) 

 eliness@quinnemanuel.com 

555 Twin Dolphin Drive, 5th Floor 

Redwood Shores, California 94065-2139 

Telephone: (650) 801-5000 

Facsimile: (650) 801-5100 

QUINN EMANUEL URQUHART & SULLIVAN, LLP 

 Meredith M. Shaw (Bar No. 284089) 

 meredithshaw@quinnemanuel.com 

50 California Street, 22nd Floor 

San Francisco, CA 94111 

Telephone: (415) 875-6600 

Attorneys for Plaintiff 

Oakland Bulk & Oversized Terminal, LLC 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA, SAN FRANCISCO DIVISION 

OAKLAND BULK & OVERSIZED 

TERMINAL, LLC 

Plaintiff, 

vs. 

CITY OF OAKLAND, 

Defendant. 

 CASE NO. 3:16-cv-07014-VC

FIRST AMENDED COMPLAINT 

Plaintiff Oakland Bulk & Oversized Terminal, LLC (“OBOT” or “Plaintiff”) 

alleges as follows: 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 1 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 1 – 

NATURE OF THE ACTION 

1. Plaintiff OBOT brings this action to correct the Oakland City Council’s 

unconstitutional abuse of its power. 

2. OBOT seeks declaratory and injunctive relief against the enforcement 

of Oakland Ordinance No. 13385 (the “Ordinance”) and Resolution No. 86234 (the 

“Resolution”), which prohibit the transportation and export of coal and petroleum 

coke (“petcoke”) to and through OBOT’s rail and marine terminal currently in 

development on city land at the port of Oakland. The Ordinance and Resolution are 

unconstitutional under the Commerce Clause of the United States Constitution and 

preempted by United States statutes, including the Interstate Commerce 

Commission Termination Act, the Hazardous Materials Transportation Act, and the 

Shipping Act of 1984. 

3. In agreements including a Development Agreement dated July 16, 

2013, Oakland granted OBOT the right and obligation to re-develop land at the 

former Oakland Army Base. This includes the right to develop a rail and marine 

terminal on that portion of the former Oakland Army Base commonly known as the 

West Gateway (the “Terminal”). The Terminal would transfer shipments of bulk 

commodities from rail carriers to ships for export to foreign countries through the 

deep water port at the former Oakland Army Base. Bulk commodities are non-

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 2 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 2 –

containerized materials such as coal, iron ore, soda ash, copper, grain, limestone, 

petroleum, cement and gravel.1 

4. Bulk commodities will be delivered to the Port of Oakland rail yard by 

Class I rail carriers. To carry the bulk commodities from the rail yard to the 

Terminal, OBOT is constructing a rail line and will operate a rail carrier. This rail 

carrier is known as Oakland Global Rail Enterprise, LLC (“OGRE”), an affiliate of 

OBOT. 

5. OBOT is currently negotiating with Terminals and Logistics Solutions, 

LLC (“TLS”) with respect to the financing, construction, and operation of the 

Terminal. The TLS transaction would result in transportation of various bulk 

commodities to and through the Terminal. One bulk commodity that TLS may 

handle is coal, which would be shipped by rail from Utah to the Terminal for export 

by ship. 

6. As set forth more fully herein, coal and petcoke provide a substantial 

amount of this nation’s energy needs, are transported by rail throughout the United 

States and are exported in large quantities to other countries. 

7. In recent years, environmental groups have increased their opposition 

to coal and petcoke because of their impact on global climate change when burned 

for fuel. The Terminal will not burn coal; rather, coal will be transported to the 

Terminal by rail and loaded onto ships for export without any burning of coal. 

 

1

 The Cambridge Business English Dictionary defines “bulk goods” as “goods such as coal, 

grains, oil, or chemicals that are not packaged in any type of container and are stored, transported, 

and sold in large quantities.” (http://dictionary.cambridge.org/us/dictionary/english/bulk-goods, 

last visited December 7, 2016; see also http://dictionary.reference.com/browse/bulk, last visited 

December 7, 2016 (“bulk” defined as “goods or cargo not in packages or boxes, usually 

transported in large volume, as grain, coal, or petroleum”). 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 3 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 3 –

Nevertheless, facing pressures from environmental interest groups opposed to the 

use of coal globally, the Oakland City Council embarked on a campaign to ban the 

transport and export of coal and petcoke to and through Oakland—and specifically 

at the Terminal. 

8. The campaign culminated in 2016, with Oakland’s passing of the 

Ordinance and Resolution. The Ordinance and Resolution impose a complete ban 

on the transportation and export of coal and petcoke to and through the Terminal. 

9. The purpose and effect of the Ordinance and Resolution are to regulate 

the transport and export of coal and petcoke. 

10. The justifications for the ban imposed by the Ordinance and Resolution 

and the purported benefits of the Ordinance and Resolution are illusory. The 

Ordinance and Resolution impose a burden on interstate and foreign commerce, are 

clearly excessive in relation to the purported local benefits, are not based on 

evidence of a substantial danger to residents of Oakland and neighbors or users of 

the Terminal, and there are less restrictive measures that can and do control the 

purported health effects that are the purported basis of the Ordinance and 

Resolution. 

11. Accordingly, the Ordinance and Resolution violate the Commerce 

Clause of the United States Constitution, and are preempted by federal statutes 

including the Interstate Commerce Commission Termination Act, which vests the 

exclusive power to regulate rail transportation in the Surface and Transportation 

Board of the United States (not the City of Oakland); the Hazardous Materials 

Transportation Act, which vests the United States Secretary of Transportation (not 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 4 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 4 – 

the City of Oakland) with the authority to determine what materials warrant 

“hazardous” designations and restrictions or prohibitions in interstate and intrastate 

transportation; and the Shipping Act of 1984, which prohibits discrimination in 

shipping of the kind required by the Ordinance. Because the Ordinance and 

Resolution violate these federal laws, as described below the Ordinance and 

Resolution also breach the Development Agreement. 

12. The passage of the Ordinance and Resolution have materially and 

substantially harmed OBOT, including by diminishing the value of OBOT’s rights 

pursuant to the Development Agreement and diminishing the value of its investment 

in the West Gateway, imposing on OBOT substantial out-of-pocket costs to mitigate 

the harm from Oakland’s unconstitutional exercise of its power, and interfering with 

OBOT’s ability to attract partners and investments for the West Gateway project. 

13. OBOT thus respectfully seeks declaratory, injunctive, and any other 

appropriate relief against the application of the Ordinance and Resolution to the 

construction and operation of the Terminal. 

PARTIES

14. Plaintiff OBOT is a California limited liability company with a 

principal place of business located at 300 Frank H. Ogawa Plaza, Suite 340, 

Oakland, CA 94612. 

15. Defendant City of Oakland is a public entity and California charter city 

located in Alameda County, California (hereinafter, “Oakland” or the “City”). 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 5 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 5 – 

JURISDICTION AND VENUE 

16. This Court has subject-matter jurisdiction over the claims asserted in 

this action pursuant to 28 U.S.C. § 1331 (federal question) because Claim 1 of 

OBOT’s complaint asks this Court, pursuant to 42 U.S.C. § 1983, to interpret and to 

apply the Commerce Clause, and Claim 2 of OBOT’s complaint asks this Court, 

pursuant to 42 U.S.C. § 1983, to interpret and to apply the ICCTA, Hazardous 

Materials Transportation Act and Shipping Act of 1984. 

17. This Court has supplemental jurisdiction pursuant to 28 U.S.C. § 1367 

over the parallel claim for breach of contract asserted in Claim 3 of OBOT’s 

complaint because it arises out of the same case or controversy as Claims 1 and 2. 

18. Venue is proper in this District pursuant to 28 U.S.C. § 1391(b)(1) 

because Defendant City of Oakland is located within the District. This Court is also 

a proper venue pursuant to 28 U.S.C. § 1391(b)(2) because a substantial part of the 

events giving rise to the claim occurred in the District, where a substantial part of 

the property affected by the regulations at issue is also located. 

19. The relief requested is authorized pursuant to 28 U.S.C. §§ 2201 and 

2202 (declaratory judgment), 28 U.S.C. § 1651(a) (injunctive relief), and 42 U.S.C. 

§ 1983 (declaratory and injunctive relief available for Commerce Clause violations). 

INTRADISTRICT ASSIGNMENT 

20. Pursuant to Civil L.R. 3-5(b) and Civil L.R. 3-2(c)-(d), there is a basis 

for assigning this civil action to the San Francisco Division or Oakland Division, as 

a substantial part of the events giving rise to the claims occurred in Alameda 

County. 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 6 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 6 – 

FACTUAL BACKGROUND 

21. From 1944 to 1999, the waterfront area just south of the eastern 

entrance to the San Francisco-Oakland Bay Bridge was a U.S. Army facility known 

as the “Oakland Army Base”. The Oakland Army Base was a major generator of 

jobs and other economic benefits for the West Oakland region before its September 

30, 1999 closure pursuant to the U.S. Department of Defense’s Base Realignment 

and Closure Commission. Following its closure, approximately 200 acres of the 

Oakland U.S. Army Base were transferred to the adjacent Port of Oakland, while the 

remaining 170 acres known as the “Gateway Development Area” were transferred 

to the City of Oakland. 

22. Facing the loss of local jobs and other economic benefits from the 

closure of the Oakland Army Base, the City adopted a “Redevelopment Plan for the 

Oakland Army Base Development Project” to facilitate the “redevelopment, 

rehabilitation, and revitalization” of the Gateway Development Area (as amended, 

the “Redevelopment Plan”). Its “major goals” included, among other things, the 

“strengthening of the economic base of the community by the construction and 

installation of infrastructure” to “stimulate new development, employment, and 

social and economic growth”. To achieve its goals the Redevelopment Plan did not 

present “specific proposals,” but instead “present[ed] a process and a basic 

framework” within which the City could “fashion, develop, and proceed with . . . 

specific plans, projects and solutions”. The Redevelopment Plan granted the City 

authority to sell or lease real property in the Gateway Development Area for 

“redevelopment of [the] land by private enterprise”. 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 7 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 7 – 

23. In 2008, after numerous proposed projects for redevelopment of the 

Oakland Army Base failed, the City issued a Request for Qualifications seeking 

plans from private developers to “transform the [Gateway Development Area] into a 

mixed use commercial and/or industrial development”. 

24. Thirteen developers submitted proposals, including California Capital 

& Investment Group, Inc. (“CCIG”). CCIG is the sole member of OBOT. 

25. At all times, CCIG and then OBOT clearly communicated to the City, 

including in project documentation, its plan to build a rail and marine terminal for 

bulk and oversized cargo at the West Gateway. The City was aware that coal was 

one of the bulk commodities that could be transported through the Terminal. 

26. For example, in October 2011 a potential sublessee of the Terminal, 

Kinder Morgan, gave a presentation to City officials that discussed how coal 

constituted 34% of the “bulk tonnage” Kinder Morgan shipped. In June 2012, 

CCIG provided to city officials a video that included a depiction of coal shipments 

from a similar terminal in Long Beach, California. In January 2013, Port of 

Oakland officials exchanged emails about their discussion with Oakland City 

officials regarding the possibility for coal shipments at the Oakland Army Base. 

Finally, a May 2013 study commissioned by the Port of Oakland included coal in its 

“suggested list of commodities” that could be shipped from the Oakland Army Base. 

27. After dozens of duly noticed public hearings, two written agreements 

were executed with the City: (1) the Lease Disposition and Development 

Agreement (as amended, the “LDDA”) and (2) the Development Agreement 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 8 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 8 – 

Regarding The Property And Project Known As The “Gateway 

Development/Oakland Global”, effective July 16, 2013 (as amended, the “DA”). 

28. The LDDA was originally entered into by the City, the Oakland 

Redevelopment Successor Agency (“ORSA”) and Prologis CCIG Oakland Global, 

LLC (“Prologis/CCIG”). Prologis/CCIG is a joint venture between an affiliate of 

Prologis, Inc. and CCIG. On or about June 13, 2014, City, Prologis/CCIG and 

OBOT entered into that certain Partial Assignment and Assumption (West Gateway) 

of the Lease Disposition and Development Agreement (the “WGW Partial 

Assignment”) whereby OBOT succeeded to all of Prologis/CCIG’s rights and 

obligations under the LDDA with respect to the West Gateway. 

29. The DA was originally entered into between the City and 

Prologis/CCIG. Pursuant to Section 10.1 of the DA, Prologis/CCIG’s rights and 

obligations under the DA with respect to the West Gateway were automatically 

assigned to OBOT upon the execution of the WGW Partial Assignment by the City, 

Prologis/CCIG and OBOT confirming OBOT as a permitted assignee under the 

LDDA with respect to the West Gateway. 

30. Neither the LDDA nor the DA impose any restrictions preventing the 

transport of coal or petcoke through the Terminal. Neither agreement limit the type 

of bulk commodities that could be exported from the Terminal. As an Assistant 

City Administrator stated in a February 3, 2016 “Status Report On Coal”: 

In 2013, the City Council adopted a Development Agreement (DA) for the 

Bulk Commodities Terminal at the Army Base West Gateway Parcel. This 

agreement vested rights to the developer (CCIG) to operate the facility 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 9 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 9 – 

under the current set of laws at the time of adoption, with limited 

exceptions. No specific restriction or prohibition on coal was made part of 

that agreement. There is a narrow exception related to health and/or safety 

(Section 3.4.2 of the DA). (emphasis added). 

31. In particular, Section 3.4 of the DA specified that only “Existing City 

Regulations” as of the adoption of the DA would “govern the development of the 

Project and all Subsequent Approvals with respect to the development of the Project 

on the Project Site”. The only exception to this express contractual promise is 

Section 3.4.2 of the DA: the City could apply health and safety regulations adopted 

after July 16, 2013, to the Terminal only if (a) the application of any such health and 

safety regulation is “otherwise permissible pursuant to Laws”—”Laws” being 

defined to include the “Constitution of the United States, and any codes, statutes, 

regulations, or executive mandates thereunder”; and (b) the “City determines based 

on substantial evidence and after a public hearing that a failure to do so 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”.2 

32. Following the execution of the DA, OBOT invested years of effort and 

millions of dollars in planning the development of the Terminal. 

33. For example, OBOT has spent millions of dollars and thousands of 

man-hours removing existing structures at the project site, building the 

 

2

 Certain other narrow exceptions exist which allow the City to apply new regulations to the 

project, but none of those exceptions applies here. 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 10 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 10 – 

infrastructure required to support the anticipated Terminal (including the rail line to 

the Terminal), and implementing environmental safeguards for use both during 

construction and future operations at the Terminal. To date, OBOT and its affiliates 

have invested well in excess of $10 million on these development efforts. 

34. As part of the development process, OBOT began to search for a 

company to construct and operate the Terminal. In the spring of 2014, OBOT 

entered negotiations with TLS. 

35. The negotiations eventually resulted in a November 2014 Exclusive 

Negotiation Agreement and Sublease Option between OBOT and TLS (the 

“Sublease Option”). The Sublease Option granted TLS an exclusive option to 

sublease and operate the Terminal for a sixty-six (66) year period. Consistent with 

the City-approved DA and industry practice for such facilities, the Sublease Option 

did not restrict the shipment of coal or any other commodity to and through the 

Terminal. 

36. Beginning in 2014, facing political pressure including from 

environmental groups Oakland City Council members decided to prohibit the 

transportation and shipment of coal and petcoke to and through the Terminal before 

reviewing the evidence of its local health and safety impacts—or lack thereof—or 

holding a genuine public hearing. This is reflected in statements and events that 

took place after the execution of the DA and before the purported public hearings 

held in September 2015, and June 2016, including but not limited to the following: 

a. On June 17, 2014—two years before the Ordinance and Resolution of 

2016 were adopted—the Oakland City Council unanimously passed 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 11 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 11 – 

Resolution No. 85054, a “Resolution to Oppose Transportation of 

Hazardous Fossil Fuel Materials, Including Crude Oil, Coal, and 

Petroleum Coke, Along California Waterways, through Densely Populated 

areas, through the City of Oakland”. This resolution, which recited the 

Council’s opposition to the transportation of commodities including coal 

and petcoke through Oakland was introduced by Councilmembers Kalb, 

Gibson, McElhaney and Kaplan. Councilmembers Brooks, Gallo, Gibson, 

McElhaney, Kalb, Kaplan, Reid, Schaaf and then-President Kernighan 

voted in favor of the resolution. On information and belief, there was not 

even the semblance of study or a public hearing before this resolution was 

passed. 

b. On or about May 4, 2015—one year before the Ordinance and Resolution 

of 2016 were adopted—Oakland Councilwoman Lynette Gibson 

McElhaney released a signed press release entitled “OAKLAND SAYS 

‘NO!’ TO COAL SHIPMENTS AT THE OAKLAND ARMY BASE”. 

Therein, Councilwoman McElhaney stated: “Lynette Gibson McElhaney, 

President of the Oakland City Council, is unequivocal in her opposition to 

coal being exported from City-owned lands, ‘. . . . [I]t is not the type of 

economic development that we want - no thank you!’” Councilwoman 

McElhaney continued: “The Oakland City Council, and the Port Board of 

Commissioners have already taken stances against coal exports, 

specifically: • In February of 2014, the Board of Port Commissioners 

rejected a proposal to ship coal from one of their terminals. • In June of 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 12 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 12 – 

2014, Councilmember McElhaney and her colleagues passed a resolution 

opposing the transport of coal, oil, petcoke (a byproduct of the oil refining 

process) and other hazardous materials by railways and waterways within 

the City”. 

c. On or about May 14, 2015, Councilmember Abel J. Guillen posted on 

social media (under his Instagram moniker, “babocinco”) a photograph of 

a large banner stating: “NO COAL IN OAKLAND” with the caption: 

“No Coal in #Oakland! #savetheplanet #savetheearth #environment1st 

#environmentaljustice”.

d. On May 11, 2015, Oakland Mayor Libby Schaaf wrote to CCIG CEO, Phil 

Tagami: “I was extremely disappointed to once again hear Jerry Bridges 

[President of TLS] mention the possibility of shipping coal into Oakland at 

the Oakland Dialogue breakfast. Stop it immediately. You have been 

awarded the privilege and opportunity of a lifetime to develop this unique 

piece of land. You must respect the owner and public’s decree that we 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 13 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 13 – 

will not have coal shipped through our city. . . . Please declare definitively 

that you will respect the policy of the City of Oakland and you will not 

allow coal to come through Oakland. If you don’t do that soon, we will all 

have to expend time and energy in a public battle . . . .” 

37. After the foregoing events and statements, the City Council began the 

process of holding a series of sham public hearings on an ordinance to ban coal and 

petcoke from Oakland. The first such hearing took place in September, 2015. 

38. Among the parties who contributed to the September 2015 hearing was 

the Bay Area Air Quality Management District (“BAAQMD”). BAAQMD 

regulates non-vehicular sources of emissions into the air in the Bay Area. At the 

September 2015 hearing, BAAQMD’s representative did not support a ban on coal 

shipments but rather adopted a “neutral position”. 

39. BAAQMD encouraged the City Council “to implement all feasible 

mitigations” such as covering rail cars and conveyors involved in transporting coal. 

BAAQMD did not provide any evidence that coal or petcoke shipments posed a 

substantial health or safety danger or that a total ban was required for health and 

safety.

40. On May 3, 2016, the Oakland City Council passed a resolution 

acknowledging that analysis and review of the potential impacts of coal and petcoke 

required “multi-disciplined expertise” and “specialized and additional expertise” 

that the City Council and its staff did not have. 

41. Accordingly, the City Council retained private consultant 

Environmental Science Associates (“ESA”) to selectively review the record 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 14 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 14 – 

compiled to date and to create findings that would appear to support a finding of 

“health and/or safety impacts” of transporting bituminous coal, fuel oils, gasoline, 

crude oil and petcoke through the Terminal. 

42. The retention of ESA and the subsequent public hearing to review the 

ESA Report were a sham—an attempt by the City Council to give the appearance of 

weighing the evidence concerning coal and petcoke, even though the City Council 

had already decided to ban the transport of coal and petcoke through the Terminal. 

43. As Councilmember Kalb stated at the May 3 hearing, the retention of 

ESA was part of a “multi-pronged effort” in which ESA would work with City Staff 

and a staff person whom Kalb had hired on a temporary basis “to get us to a place 

hopefully by the end of June where we’d be able to take appropriate action and have 

the ability under the rules and under the provision of the development agreement to 

take serious action”. 

44. Councilmember Noel Gallo was even more direct at the May 3 hearing: 

he expressed concern that the retention of ESA would further delay the vote on 

banning coal and said that he was “ready to vote no on the coal”. 

45. On or about Thursday, June 23, 2016, ESA issued its “Report on the 

Health and/or Safety Impacts Associated with the Transport, Storage, and/or 

Handling of Coal and/or petcoke in Oakland, Including at the Proposed Oakland 

Bulk and Oversized Terminal in the West Gateway Area of the Former Oakland 

Army Base” (the “ESA Report”). 

46. On Friday, June 24, 2016, the City for the first time publicly released 

proposed drafts of the Ordinance and Resolution. At the same time the City also 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 15 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 15 – 

released an Agenda Report prepared by City staff (the “Staff Report”) that 

recommended the adoption of the Ordinance and Resolution and which was 

purportedly based on an evaluation of the ESA Report completed one day earlier 

and of public letters and opinions submitted to the City regarding coal and petcoke, 

including other reports purporting to analyze those submissions. 

47. On June 27, 2016, three days after the ESA Report was issued to the 

City (including two weekend days) the City Council held a hearing and voted to ban 

coal and petcoke in the Ordinance and Resolution. On information and belief, no 

city councilmember fully analyzed and understood the 163 page ESA report in that 

amount of time, and no city councilmember asked any questions of ESA at the June 

27 hearing. 

48. The ESA Report separated its findings with respect to the potential 

“health effects” of coal, “safety effects” of coal and “climate effects” of coal. With 

respect to the purported “health effects” of transporting coal, the ESA Report merely 

concluded that the rail transportation and storage and handling of coal, taken 

together, “could impact the health of adjacent neighbors from the expected increase 

into the ambient air in the form of total suspended particulates and fine particulates 

(TSP, PM10, and PM2.5) . . . .” (emphasis added). 

49. Even these speculations by ESA about what “could” happen are 

unsupported. Nothing in the ESA Report or any other report or submission 

purportedly evaluated by the City Council and its staff provides a basis for a ban on 

coal or petcoke by the City of Oakland. 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 16 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 16 – 

50. The ESA Report relies principally on estimates of particulate matter 

(“PM”) emissions resulting from the transportation of coal and petcoke. PM10 and 

PM2.5 are standard metrics for measuring PM found in the air. PM is not unique to 

coal and petcoke: a large number of other sources produce PM including, for 

example, windblown soil, vehicle exhaust, grain storage, and woodburning 

fireplaces. 

51. Thus, any activity—including shipping commodities other than coal 

or petcoke to and through the Terminal—could increase the levels of PM in the air. 

52. Neither the ESA Report nor any other report or submission purportedly 

evaluated by the City Council or its staff addresses whether coal and petcoke release 

more PM than other bulk commodities that might be shipped through the Terminal. 

53. The ESA Report divided its emission estimates between “Rail 

Transport” (the period when the coal would be in transit in a rail car) and “OBOT 

Operations” (the period when the coal would be unloaded, stored, transferred and 

transloaded into ships after arriving at the Terminal). These estimates are contained 

in Table 5.7 of the ESA Report: 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 17 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 17 – 

54. ESA’s estimates of “TSP” are irrelevant for all practical purposes: TSP 

is not regulated, and measurements of TSP are not relied upon in assessments of air 

quality, not even in the ESA Report. 

55. ESA’s estimates of PM10 and PM2.5 emissions from the unloading, 

storage, transfer and/or transloading of coal at the “OBOT Operations” were not 

supported by evidence. 

56. The Terminal and its emission controls have not yet been fully 

designed, much less constructed. Accordingly, it is impossible to specify the precise 

amount of possible emissions that might be associated with the proposed Terminal. 

57. Nonetheless, ESA did not provide a range of estimated potential 

emissions from the Terminal but instead purported to estimate the precise level of 

emissions. 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 18 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 18 – 

58. ESA provided no detail or back up or any indication of the numerical 

inputs it used to reach the values in Table 5-7. 

59. On information and belief, no set of inputs grounded in fact would 

support the values set forth in Table 5-7 of the ESA Report. 

60. ESA does not appear to have taken into account in Table 5-7 the 

emission levels of two terminals in California that transport coal or petcoke. 

61. The terminal at the Port of Pittsburg is a multiple commodity terminal, 

which stores and ships petcoke. ESA does not appear to have taken into account the 

Pittsburg terminal’s emission values in the values it reported in Table 5-7 of the 

ESA Report. ESA did not explain this omission. 

62. The terminal at the Port of Long Beach is a multiple commodity 

terminal, which stores and ships coal and petcoke. ESA does not appear to have 

taken into account the Long Beach terminal’s emission values in the values it 

reported in Table 5-7 of the ESA Report. ESA did not explain this omission. 

63. Consistent with the proposed design of the Terminal, the Pittsburg 

terminal and the Long Beach terminal are either totally enclosed or partially 

enclosed and otherwise covered. The reported emissions for these facilities are far 

lower than the values predicted by ESA for the Terminal. 

64. On information and belief, the Pittsburg terminal and the Long Beach 

terminal operate pursuant to permits from their respective Air Quality Management 

Districts. These Districts regulate air quality pursuant to delegation from the State 

of California. 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 19 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 19 – 

65. On information and belief, the Pittsburg terminal publicly reported 

emissions of 0.1 tons a year of PM10 and 0.1 tons a year of PM2.5; these emissions 

are based on a total throughput of 500,000 tons of petcoke per year. 

66. On information and belief, the Long Beach terminal publicly reported 

emissions of 0.8 tons per year of PM10 and 0.2 tons per year of PM2.5; these 

emissions are based on a total throughput of approximately 1.7 million tons of coal 

per year. 

67. The emissions rates in paragraphs 65 through 66 reflect emissions rates 

at similar enclosed and/or covered terminals, and are well below the emissions rate 

assumed in the ESA Report. 

68. The ESA Report does not contain any explanation about why the 

enclosures and/or covers of the Pittsburg or Long Beach terminals would not work 

at the Terminal. Neither the ESA Report nor any other report or submission 

purportedly evaluated by the City Council or its staff contains any explanation about 

why they did not assume emissions rates comparable to the Pittsburg and Long 

Beach terminals. 

69. The EPA has delegated certain regulatory authority regarding air 

quality to the states. The State of California has delegated regulatory responsibility 

for air pollution from non-vehicular sources to Air Quality Management Districts. 

In the nine county Bay Area, this regulatory body is BAAQMD. 

70. The ESA Report acknowledges that the “Bay Area Air Quality 

Management District (BAAQMD)” is “the regional agency responsible for air 

pollution control in San Francisco Air Basin (Bay Area) . . . . “ 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 20 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 20 – 

71. No BAAQMD rule or regulation requires a ban on the transportation of 

coal or the proposed activities at the Terminal. 

72. For any new source of emissions in the Bay Area, BAAQMD has 

established thresholds over which it considers an increase in emissions “significant”. 

With respect to PM10,BAAQMD considers a new source of emissions significant if 

it emits over 15 tons of PM10 per year. With respect to PM2.5,BAAQMD considers 

a new source of emissions significant if it emits over 10 tons of PM2.5 per year. 

73. On information and belief, the increase in PM emissions from the 

operations at the Terminal, whether or not coal and petcoke were permitted, would 

be approximately ten times less than what BAAQMD considers significant. 

74. Pursuant to BAAQMD Regulations, the Terminal would be required to 

obtain an operational permit. The permit would be conditioned on installation of 

Best Available Control Technology (BACT). On information and belief, BACT 

includes control measures such as enclosures, baghouses, wind screens, spillage 

control for conveyors, and water sprays. 

75. Storage domes and enclosed conveyors are currently used in coal and 

petcoke facilities, including in the Bay Area. The ESA Report so states and 

recognizes these mitigation measures would be regarded by BAAQMD as “Best 

Available Control Technology”. ESA does not state that it took these measures into 

account in calculating the values in Table 5-7. On information and belief, ESA did 

not do so. 

76. The installation of BACT will ensure that PM emissions at the 

Terminal are negligible. 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 21 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 21 – 

77. On or about October 5, 2015, BAAQMD wrote to the City Council: 

“Air District staff is available to meet with City staff and assist in the evaluation of 

Terminal Logistics Solutions’ proposed mitigation measures and discuss additional 

measures. As Air District staff stated at the Sept. 21 hearing, potential air quality 

emissions and impacts to public health from the proposed Project include fugitive 

dust and equipment engine emissions. Dust emissions can be reduced through 

aggressive containment of all aspects of material handling – rail cars, conveyers, 

storage piles, etc.” Such containment is planned for the Terminal and related 

activities. On information and belief, ESA did not take these containment measures 

into account in Table 5.7 and did not address or explain why it rejected BAAQMD’s 

views on these containment measures. 

78. On information and belief, neither the ESA Report nor any other report 

or submission purportedly evaluated by the City Council or its staff addresses or 

explains why BAAQMD’s permit requirements and the installation of BACT would 

be insufficient. 

79. The ESA Report failed to address that the South Coast Air Quality 

Management District (SCAQMD) adopted a regulation known as Rule 1158 at least 

in part to regulate the Long Beach terminal. Nothing in the ESA Report or any 

other report or submission purportedly evaluated by the City Council or its staff 

addresses, much less establishes, that there is any substantial danger to neighbors or 

users of the Long Beach terminal as it is operating today. Nothing in the ESA 

Report or other evidence addresses why the Terminal, if the requirements of Rule 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 22 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 22 – 

1158 were applied to it, would result in any substantial danger to neighbors or users 

of the Terminal or other residents of Oakland. 

80. The Pittsburg and Long Beach terminals are not the only facilities in 

California that handle coal or petcoke. As the ESA Report acknowledges, “In the 

San Francisco Bay area all of the five refineries produce petcoke” which is a 

“commonly exported commodity”. The ESA Report contains no indication of the 

emissions levels from these facilities. The ESA Report contains no indication of 

any adverse health consequences from these facilities. 

81. As set forth herein, the City is prohibited by the United States 

Constitution and federal law from regulating rail transportation. 

82. Even if the City could lawfully regulate rail transportation, ESA’s 

estimates for PM emissions from Rail Transport were explicitly based on an 

assumption of “uncontrolled air emissions of fugitive dust from open coal filled rail 

cars”. There was no basis for this assumption. 

83. In fact, potential coal dust emissions from rail cars transporting coal to 

the Terminal could be controlled by measures such as rail car covers and/or 

surfactants (spray-on adhesive coating that is routinely employed in rail transport for 

the purpose of preventing fugitive dust releases). ESA cited no evidence that such 

measures would not work. 

84. Further, on information and belief, even with respect to uncovered rail 

cars the rate of coal dust emissions decreases rapidly as the rail car begins to travel. 

As a result, PM emissions from a rail car travelling through Oakland would be 

significantly less than any such emissions at the departure point. 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 23 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 23 – 

85. On information and belief, ESA relied upon numerical values 

concerning emission rates for uncovered rail cars at the departure point and assumed 

that rate would be constant along the entire trip. The currently projected starting 

point for coal shipments to the Terminal is Utah—almost a thousand miles from 

Oakland. There was no basis for the ESA Report or any other report or submission 

purportedly evaluated by the City Council or its staff to use emissions rates at the 

departure point in Utah to predict emissions from trains moving in Oakland. 

86. Once operational, commodities will arrive at the Terminal from the 

interstate rail system as follows: 

a. “Class I” rail carriers will transport commodities to the Port of Oakland 

Rail Yard.

b. Once the commodities arrive at the Rail Yard, the Class I rail carriers 

will transport the commodities from the Rail Yard to the Terminal via the 

rail carrier known as OGRE. 

c. The rail cars that OGRE will move from the Rail Yard to the Terminal 

belong to the Class I rail carriers. 

d. OGRE will be paid by the Class I rail carriers to move these rail cars. 

e. At any time, the Class I carriers will be entitled to undertake the Rail 

Yard to Terminal transportation directly.

87. Once commodities arrive at the Terminal, they will be transloaded from 

the rail carrier through the Terminal to ships for shipment to other states or export to 

foreign countries. Transloading is an integral part of the interstate rail system. It 

includes handling the commodities, loading and unloading them, possibly storing 

them temporarily, and transferring them from the rail carrier through the terminal to 

the ships. 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 24 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 24 – 

88. With respect to the “safety effects” of coal and petcoke, the ESA 

Report asserted merely that fires have occurred at coal piles and in rail cars of 

unspecified contents in unspecified conditions, and that coal fires can present a 

danger to persons in close proximity to them, such as firefighters. The ESA Report 

identified no evidence, however, that a coal fire is likely to occur at the Terminal or 

in rail cars carrying coal to or through the Terminal in Oakland. 

89. The ESA Report provided no evidence of a coal fire ever occurring at 

any of the coal rail terminals cited in the Report. 

90. In particular, neither the ESA Report nor any other report or 

submission purportedly evaluated by the City Council or its staff contains any 

evidence that there has been a fire at the Long Beach Terminal or the Pittsburg 

terminal, which use covers and/or enclosures. 

91. ESA did not consider any evidence regarding mitigation measures for 

fire safety. 

92. With respect to the climate effects of coal and petcoke, the ESA Report 

commented on greenhouse gases solely because it was mentioned by public 

commenters during the public hearing process: “Because numerous public 

commenters noted the contribution of the greenhouse gas emissions of coal when 

combusted by the end user overseas, this study also includes a review of those 

comments”. 

93. The ESA Report states that air pollutants emitted from the use of coal 

and petcoke overseas may be carried over the ocean to Oakland. On information 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 25 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 25 – 

and belief, because of the relevant meteorological conditions, there will be no or 

negligible air quality impact to Oakland from the burning of coal overseas. 

94. The ESA Report states that the coal shipped through the Terminal and 

combusted overseas could increase greenhouse gas levels globally. On information 

and belief, the size of any increase in greenhouse gasses from the use of the 

quantities of coal that would be exported through the Terminal would be on the 

order of 0.01 percent (one one-hundredth of one percent) of the global total. 

95. The ESA Report concludes that the resulting incremental rise in sea 

level “would be experienced locally in Oakland”. Neither the ESA Report nor any 

other report or submission purportedly evaluated by the City Council or its staff 

contain any substantial evidence to support this conclusion. The size of the increase 

in global greenhouse gas levels, as alleged in the previous paragraph, would not be 

perceptible in Oakland. 

96. Apart from the ESA Report, the Staff Report (on which the Ordinance 

and Resolution purport to rely) purports to have evaluated a report by Zoe Chafe 

regarding the transportation of coal and petcoke (the “Chafe Report”). 

97. In or around November 2015, City Councilmember Kalb issued a 

solicitation and proposed scope of work entitled “Evaluation of Health and Safety 

Impacts of the Proposed Bulk Coal Terminal on the Former Oakland Army Base 

Adjacent to the Port of Oakland”. 

98. Councilmember Kalb’s solicitation resulted in the retention of Zoe 

Chafe to prepare a report that purported to review the evidence regarding coal and 

petcoke. 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 26 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 26 – 

99. As the November 2015 solicitation suggested, the retention of Chafe 

was an attempt to by the City Council to give the appearance of weighing the 

evidence concerning coal and petcoke, even though the City Council had already 

decided to ban the transport of coal and petcoke to and through the Terminal 

irrespective of the evidence. 

100. That solicitation made clear that a balanced and objective review of the 

evidence was not expected. The solicitation stated that the person to be retained 

would review the record from the September 2015 hearing on coal and petcoke and 

produce a document that would contain, if applicable, “a series of findings that can 

be used to support the application of public health or safety regulations pursuant to 

section 3.4.2 of the development agreement”. 

101. While Chafe was preparing her Report, and shortly before the Oakland 

City Council passed the resolution to retain ESA on May 3, 2016, Vice Mayor and 

City Councilmember Anne Campbell Washington received an email from her chief 

of staff that provided a path to the adoption of the Ordinance and Resolution. 

Among other things, the email stated that “The only way to vote on June 21 [to ban 

coal and petcoke] is if ESA process is dispensed altogether. We can rely on the 

report that Zoe Chafe is preparing and that independent public health panel will 

prepare”. 

102. The email to Councilmember Campbell was written on April 30, 2016; 

the Chafe Report was not completed until June 22, 2016. The fact that the City 

Council and its staff believed that it could “rely” on the Chafe Report before it was 

completed reflects that the Report was not an objective review of the evidence. 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 27 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 27 – 

103. The Chafe Report is not supported by substantial evidence. 

104. For example, with respect to purported health effects, the Chafe Report 

states that the Terminal presents a health risk because “[t]here is no safe level of 

exposure to PM2.5” and the Terminal will release PM2.5. As set forth in paragraph 

51 above, any operations at the Terminal or West Gateway would and currently do 

release PM2.5, whether or not involving coal or petcoke. 

105. The Chafe Report states that emissions from the burning of coal may 

cause cancer. As set forth in paragraph 7 above, there will be no burning of coal in 

connection with the Terminal. 

106. Chafe’s assertion that coal fires may expose people to carcinogenic 

toxins is based on studies regarding prolonged exposure to fumes from cooking food 

using solid fuels such as coal. These conditions are inapplicable to people in the 

vicinity of the Terminal, even assuming a coal fire occurred at some point. 

107. Chafe’s assertions regarding the health effects of coal on workers at the 

Terminal assume that conditions at the Terminal would be the same as those in a 

coal mine. There is no basis for this incorrect assumption. 

108. The conditions at the Terminal, like the conditions at the Pittsburg and 

Long Beach terminals, would not be similar to coal mines in any material respect. 

109. Workers at the Terminal will be equipped with protective equipment as 

required by the National Institute for Occupational Safety and Health including 

personal respiratory protection. Chafe assumes, without evidentiary support, that 

the protective equipment would not work. Neither the Chafe Report nor any other 

report or submission purportedly evaluated by the City Council or its staff cites any 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 28 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 28 – 

evidence that workers at the Long Beach and Pittsburg terminals do not use 

protective equipment or are otherwise exposed to health risks. 

110. Chafe asserts that PM will be released from the Terminal by “Rail cars 

being transported through Oakland”, “Rail cars in terminal (bottom-dump)”, “Open 

rail cars” and “Open storage areas”. 

111. There will be no “Open rail cars” and no “Open storage areas” at the 

Terminal, and any dust emitted from the “bottom-dump” railcars would be 

contained within the fully enclosed Terminal. 

112. With respect to coal fires and explosions, Chafe asserts that “even if 

safety protocols are followed” the transportation of coal to and through the Terminal 

presents a “substantial risk” of “substantial damage from fires and explosions”. 

Chafe did not cite any evidence regarding mitigation measures for fire safety or 

attempt to explain why those mitigation measures would not work. 

113. In particular, the Chafe Report contains no evidence that there has been 

a fire at the Long Beach or Pittsburg terminals, which use covers and/or enclosures 

and employ fire mitigation measures. 

114. The assertion in the Chafe Report and in other reports and submissions 

purportedly evaluated by the City Council or its staff that coal poses a substantial 

risk of fire/explosion during transport, including by spontaneous combustion, 

despite all safety precautions, contradicts the Secretary of Transportation’s 

designation of coal as safe for transportation. 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 29 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 29 – 

115. Chafe’s conclusions regarding the global climate effects of coal 

exported from the Terminal are not supported by evidence for the same reasons 

alleged in paragraphs 94 through 95 above. 

116. The purpose, intent and effect of the Ordinance and Resolution is to 

regulate the transportation by rail and by ship of coal and petcoke. 

117. By completely banning coal and petcoke activities at the Terminal, the 

Ordinance and Resolution make it impossible to ship or transport coal to or through 

Oakland for export. 

118. The fact that the Oakland City Council’s intent was to prohibit rail 

transportation and shipping of coal and petcoke is reflected in the ESA Report and 

other reports and submissions purportedly evaluated by the City Council or its staff. 

In particular, ESA’s estimated emissions of both PM10 and PM 2.5 from the “OBOT 

Operations” are only 13% of ESA’s estimated total emissions for “all activities 

associated with OBOT for the export of coal” (i.e., from “Rail Transport” and 

“OBOT Operations” combined). Other reports purportedly evaluated by the City 

Council or its staff similarly relied principally upon the estimates of PM emissions 

from coal and petcoke associated with rail transport and not from operations at the 

Terminal. 

119. The fact that the Oakland City Council’s intent was to prohibit rail 

transportation and shipping of coal and petcoke is also reflected by the exemptions 

from the scope of the Ordinance and Resolution of local coal and petcoke operations 

unrelated to transportation: specifically exempted from the ban are (a) noncommercial facilities located in Oakland, and (b) commercial manufacturing 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 30 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 30 – 

facilities located in Oakland where coal and petcoke are consumed on-site. The 

ESA Report states that these activities emit pollutants that can have impacts on 

health and on the environment and provides no basis for distinguishing between 

these activities and transportation activities. 

120. Oakland City Councilmembers expressly stated that they enacted the 

Ordinance and Resolution precisely to prevent the rail transportation and shipping of 

coal and petcoke to and through Oakland. For example: 

a. On June 28, 2016, shortly after the votes on Ordinance No. 13385 and 

Resolution No. 86234, Councilmember Abel Guillen posted a link to an 

article on social media declaring: “Oakland bans coal shipments”; 

b. In a July 31, 2016 email, Councilmember Rebecca Kaplan sought 

donations for her re-election campaign by touting her role in “banning the 

shipment and storage of coal”; 

c. In an August 23, 2016 post, Councilmember Lynette Gibson McElhaney, 

discussing her bid for re-election, similarly emphasized that during her 

time on the City Council, Oakland “**Banned coal exports”. 

121. The statements by these City Councilmembers, and others, reflect 

reality: If the Ordinance remains in place, no rail carrier will ship coal to Oakland 

for export because there would be no way to move the coal from the rail carrier to 

the ships. Since no rail carrier could bring coal to Oakland, ships likewise could not 

transport coal for export. 

122. The exclusive Sublease Option OBOT negotiated with TLS, as 

described in paragraph 35 above, was set to earn both OBOT and the City of 

Oakland millions of dollars over the 66-year life of the sublease. The transaction 

was based, in part, on TLS’s expectation that it could select the bulk commodities to 

be shipped to and through the Terminal without restriction. 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 31 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 31 – 

123. The passage of the Ordinance and Resolution significantly diminished 

the value of the Sublease Option, causing TLS not to exercise its option and instead 

to seek to renegotiate the payment terms of the proposed sublease at substantially 

less advantageous terms for OBOT. 

124. Accordingly, the passage of the Ordinance and Resolution have 

materially and substantially harmed OBOT, including by diminishing the value of 

OBOT’s rights pursuant to the DA and diminishing the value of its investment in the 

West Gateway, imposing on OBOT substantial out-of-pocket costs to mitigate the 

harm from Oakland’s unconstitutional exercise of its power, and interfering with 

OBOT’s ability to attract partners and investments for the West Gateway project, all 

of which threaten the viability of the Terminal. 

CLAIMS FOR RELIEF

FIRST CLAIM 

Unconstitutionality Under the Commerce Clause 

125. OBOT realleges and reincorporates by reference the allegations set 

forth in paragraphs 1 through 124, above. 

126. According to the U.S. Energy Information Administration (the “EIA”), 

more than one billion short tons of coal were produced by U.S. coal mines in 

aggregate in 2014. The U.S. is a substantial user of coal, both for electric power and 

a variety of other commercial, institutional, and industrial purposes. For example, in 

2015 more than 1.7 billion short tons of coal were used nationwide. 

127. On information and belief, coal is mined in 25 states of the United 

States (but not California), and nearly 70% of coal delivered in the United States is 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 32 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 32 – 

transported by rail for at least some portion of its journey. The Department of 

Transportation’s “Freight Facts and Figures” show that as of 2013, coal remained 

the sixth most shipped commodity by weight in the U.S., with more than 1.2 billion 

tons transported that year. 

128. The United States is also a large beneficiary of international trade in 

coal, reportedly exporting approximately 75 million short tons of coal in 2015 alone. 

On information and belief, more coal is exported from the West Coast of the United 

States than any other non-containerized commodity. 

129. The proper and efficient functioning of the system for transportation of 

commodities including coal and petcoke by rail requires a uniform transportation 

infrastructure and regulations throughout the country and would be defeated by a 

patchwork of local regulations. 

130. The Ordinance and Resolution significantly impair the federal interest 

in an efficient and uniform system of transportation of commodities in interstate and 

foreign commerce by effectively prohibiting all shipments of coal and petcoke to 

and through the Terminal. The loading, unloading, transloading, transferring, 

storage and/or other handling of coal and petcoke are necessary and inextricable 

parts of that uniform system of interstate shipment of coal and petcoke by rail and 

export by ship—particularly at a rail-to-ship terminal, where the primary function is 

to transfer bulk material such as coal and petcoke from rail to ship for international 

export. 

131. The Ordinance, as applied to the Terminal through the Resolution, 

imposes burdens on interstate commerce that are impermissible under the 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 33 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 33 – 

Commerce Clause. U.S. Const. art. I, § 8, cl. 3. The Ordinance burdens out-of-state 

miners, shippers, customers and carriers of coal and petcoke while protecting instate interests by banning the transportation of coal and petcoke through the 

Terminal and simultaneously exempting from the ban local operations within 

Oakland that handle, store, and/or consume coal and petcoke. 

132. The justifications for the ban imposed by the Ordinance and Resolution 

and the purported benefits of the Ordinance and Resolution are illusory. The 

Ordinance and Resolution impose a burden on interstate and foreign commerce, are 

clearly excessive in relation to the purported local benefits, are not based on 

evidence of a substantial danger to residents of Oakland and neighbors or users of 

the Terminal, and there are less restrictive measures that can and do control any 

fugitive dust emissions from the activities banned by the Ordinance and Resolution. 

133. As described herein, the passage of the Ordinance and Resolution have 

materially and substantially harmed OBOT, including by diminishing the value of 

OBOT’s rights pursuant to the DA and diminishing the value of its investment in the 

West Gateway, imposing on OBOT substantial out-of-pocket costs to mitigate the 

harm from Oakland’s unconstitutional exercise of its power, and interfering with 

OBOT’s ability to attract partners and investments for the West Gateway project. 

134. OBOT therefore seeks declaratory and injunctive relief finding that the 

Ordinance and Resolution are unconstitutional under the Commerce Clause of the 

United States Constitution. 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 34 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 34 – 

SECOND CLAIM 

Preemption Under the ICCTA, the Hazardous Materials 

Transportation Act, and the Shipping Act of 1984 

135. OBOT realleges and reincorporates by reference the allegations set 

forth in paragraphs 1 through 124, above. 

136. The Ordinance, as applied to the Terminal through the Resolution, is 

preempted by federal law. 

137. The Ordinance and Resolution are preempted by the Interstate 

Commerce Commission Termination Act (“ICCTA”), which vests the exclusive 

power to regulate rail transportation in the Surface and Transportation Board of the 

United States; the Hazardous Materials Transportation Act (“HMTA”), which vests 

the United States Secretary of Transportation with the authority to determine what 

materials warrant “hazardous” designations and restrictions or prohibitions in 

interstate and intrastate transportation; and the Shipping Act of 1984 which 

prohibits unreasonable discrimination against shippers, including by refusing to 

provide terminal services for reasons unrelated to transportation conditions. 

138. The ICCTA, 49 U.S.C. 10501 et seq., preempts the Ordinance and 

Resolution. 

139. The ICCTA vests the Surface and Transportation Board (“STB”) with 

exclusive jurisdiction over “transportation by rail carriers” and the operation of 

“spur, industrial, team, switching or side tracks, or facilities”. 49 U.S.C. § 10501(b). 

140. The ICCTA further provides that the remedies provided under ICCTA 

“with respect to regulation of rail transportation are exclusive and preempt the 

remedies provided under Federal or State law”. 49 U.S.C. § 10501(b) 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 35 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 35 – 

141. As set forth herein, the ICCTA preempts the Ordinance and Resolution 

because they impermissibly regulate services related to the movement of property 

by rail, including receipt, storage, handling, and interchange of property at the 

Terminal. 

142. The Ordinance and Resolution unjustifiably restrict and foreclose the 

foregoing activities by banning the loading, unloading, transloading, transferring, 

storage and/or other handling of coal or petcoke at the Terminal. 

143. The HMTA, 49 U.S.C. §§ 5101 et seq., preempts the Ordinance and 

Resolution. 

144. The HMTA vests the United States Secretary of Transportation 

(“Secretary”) with the exclusive authority to determine what materials warrant (and 

do not warrant) “hazardous material” designations and restrictions or prohibitions in 

interstate and intrastate transportation. 

145. 49 U.S.C. § 5103 states that the Secretary shall designate materials as 

hazardous when the Secretary determines that transporting the material in commerce 

in a particular amount and form may pose an unreasonable risk to health and safety 

or property. 

146. 49 U.S.C. § 5125 preempts states and political subdivisions of states 

from enacting any law or regulation that is an obstacle to accomplishing and 

carrying out the HMTA or regulations thereunder. 

147. 49 U.S.C. § 5125 further preempts any regulation that is “not 

substantively the same” as any provision of the HMTA or regulations promulgated 

under its authority with respect to “the designation, description, and classification of 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 36 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 36 – 

hazardous material” and “the packing, repacking, handling, labeling, marking, and 

placarding of hazardous material”. (emphasis added). 

148. The Secretary has not designated or classified coal as a hazardous 

material that must be prohibited from interstate or intrastate transport. The 

Secretary has designated coal, along with other flammable solids like paper, wood, 

and straw as materials that may require certain packaging, labelling and stowage 

restrictions when shipped by marine vessel, but which do not present an 

unreasonable risk of harm to health and safety when transported by rail and through 

terminals. 

149. The Secretary has designated “Coke, Hot” as a hazardous material 

forbidden from transport, 49 CFR 172.101, but otherwise has designated petcoke as 

a material that is safe to transport in interstate (and intrastate) commerce without 

unreasonable risk of harm to health or safety. 

150. In adopting the Ordinance and Resolution, Oakland has designated coal 

and petcoke as materials that must be banned from transportation through the 

Terminal because the City has determined that they pose a substantial risk to health 

and safety. By designating coal and petcoke as materials that present an 

unreasonable risk to health and safety when transported in interstate commerce to 

and through the Terminal, the Ordinance and Resolution usurp the exclusive 

authority granted to the Secretary and are an obstacle to accomplishing and carrying 

out the HMTA’s goals of national uniform standards regarding the designation and 

transportation of dangerous materials, and the HTMA’s purpose of avoiding a 

patchwork of state and local regulations. 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 37 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 37 – 

151. The Ordinance and Resolution are substantively different than the 

HMTA and regulations thereunder as to at least the designation, classification and/or 

handling of coal and petcoke. 

152. The Shipping Act of 1984, 46 U.S.C. §§ 40101, et seq., preempts 

and/or otherwise prohibits the Ordinance and Resolution. 

153. The Shipping Act provides that a “marine terminal operator may not—

(1) agree with another marine terminal operator or with a common carrier to 

boycott, or unreasonably discriminate in the provision of terminal services to, a 

common carrier or ocean tramp; (2) give any undue or unreasonable preference or 

advantage or impose any undue or unreasonable prejudice or disadvantage with 

respect to any person; or (3) unreasonably refuse to deal or negotiate.” 46 U.S.C. 

§ 41106. 

154. The operator of the Terminal will be a marine terminal operator. The 

Ordinance and Resolution preclude the operator of the Terminal from dealing with 

and providing terminal related services to shippers of coal and petcoke. 

155. It is unreasonable to refuse to provide terminal services for reasons 

unrelated to transportation conditions. Transportation conditions include the 

transportation needs of the cargo, competition from other carriers, insufficient cargo 

to warrant service at a particular port, or conditions at a port or other facility that are 

beyond the carrier’s control. Transportation conditions do not include local 

regulations based on public policy. 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 38 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 38 – 

156. Based on the City’s public policy against coal and petcoke, the 

Ordinance and Resolution require that operators of the Terminal refuse to provide 

terminal services to shippers of coal and petcoke. 

157. As described herein, transportation conditions cannot justify this 

discrimination against shippers that deal in coal and petcoke. 

158. The justifications for the ban imposed by the Ordinance and Resolution 

and the purported benefits of the Ordinance and Resolution are illusory. The 

Ordinance and Resolution impose a burden on interstate and foreign commerce, are 

clearly excessive in relation to the purported local benefits, are not based on 

evidence of a substantial danger to residents of Oakland and neighbors or users of 

the Terminal, and there are less restrictive measures that can and do control any 

fugitive dust emissions from the activities banned by the Ordinance and Resolution. 

159. As described herein, the passage of the Ordinance and Resolution have 

materially and substantially harmed OBOT, including by diminishing the value of 

OBOT’s rights pursuant to the DA and diminishing the value of its investment in the 

West Gateway, imposing on OBOT substantial out-of-pocket costs to mitigate the 

harm from Oakland’s unconstitutional exercise of its power, and interfering with 

OBOT’s ability to attract partners and investments for the West Gateway project. 

160. Based on the foregoing, OBOT seeks declaratory and injunctive relief 

finding that the Ordinance and Resolution, at least as applied to the Terminal, are 

preempted by federal law. 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 39 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 39 – 

THIRD CLAIM 

Breach of Contract 

161. OBOT realleges and reincorporates by reference the allegations set 

forth in paragraphs 1 through 124, above. 

162. In the DA, Oakland granted OBOT the vested right to develop and use 

(and/or sublease) the West Gateway property for a bulk commodities terminal 

subject to regulations existing as of the effective date of the DA, July 16, 2013. 

163. The adoption and enforcement of the Ordinance and Resolution breach 

the DA because section 3.4.2 of the DA permits the City to apply a health and safety 

regulation adopted after July 16, 2013, to the Terminal only if (a) the application of 

any such health and safety regulation is “otherwise permissible pursuant to Laws” 

(“Laws” being defined to include the Constitution of the United States, and any 

codes, statutes, regulations, or executive mandates thereunder), and (b) the 

regulation is based on substantial evidence of a substantial danger to health and 

safety. 

164. As set forth herein, the Ordinance and Resolution violate the United 

States Constitution and federal law. 

165. As set forth herein, the Ordinance and Resolution are not based on 

substantial evidence. 

166. The justifications for the ban imposed by the Ordinance and Resolution 

and the purported benefits of the Ordinance and Resolution are illusory. The 

Ordinance and Resolution impose a burden on interstate and foreign commerce, are 

clearly excessive in relation to the purported local benefits, are not based on 

evidence of a substantial danger to residents of Oakland and neighbors or users of 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 40 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 40 – 

the Terminal, and there are less restrictive measures that can and do control any 

fugitive dust emissions from the activities banned by the Ordinance and Resolution. 

167. As described herein, the passage of the Ordinance and Resolution have 

materially and substantially harmed OBOT, including by diminishing the value of 

OBOT’s rights pursuant to the DA and diminishing the value of its investment in the 

West Gateway, imposing on OBOT substantial out-of-pocket costs to mitigate the 

harm from Oakland’s unconstitutional exercise of its power, and interfering with 

OBOT’s ability to attract partners and investments for the West Gateway project. 

PRAYER FOR RELIEF

WHEREFORE, OBOT respectfully prays that this Court: 

A. Issue a declaratory judgment, pursuant to 28 U.S.C. § 2201, 42 U.S.C. 

§ 1983, and/or Rule 57 of the Federal Rules of Civil Procedure, that: 

i. the Commerce Clause of the United States Constitution prohibits 

Oakland from applying the Ordinance and Resolution to OBOT or 

the Terminal; 

ii. the ICCTA preempts Oakland from applying the Ordinance and 

Resolution to OBOT or the Terminal; 

iii. the HMTA preempts Oakland from applying the Ordinance and 

Resolution to OBOT or the Terminal; 

iv. the Shipping Act of 1984 preempts and/or otherwise prohibits 

Oakland from applying the Ordinance and Resolution to OBOT or 

the Terminal; and 

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 41 of 42
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

– 41 – 

v. Section 3.4 of the DA prohibits Oakland from applying the 

Ordinance and Resolution to OBOT or the Terminal. 

B. Issue a permanent injunction, pursuant to 28 U.S.C. § 1651, 42 U.S.C. 

§ 1983, and/or Rule 65 of the Federal Rules of Civil Procedure, enjoining Oakland 

from applying or enforcing the Ordinance and Resolution to OBOT or the Terminal; 

C. Award reasonable attorneys’ fees and costs; and 

D. Award such other legal or equitable relief available under the law that 

may be considered appropriate under the circumstances in light of the City of 

Oakland’s above alleged misconduct, including relief prohibiting the City from 

asserting that OBOT has breached the DA, the LDDA, and the Ground Lease for 

West Gateway, dated February 16, 2016, by any failure to perform resulting from 

the City’s misconduct. 

Dated: June 14, 2017 Respectfully submitted, 

QUINN EMANUEL URQUHART & 

SULLIVAN, LLP 

By: /s/ Robert P. Feldman

Robert P. Feldman 

 Attorneys for Plaintiff OBOT

 FIRST AMENDED COMPLAINT

Case 3:16-cv-07014-VC Document 74 Filed 06/14/17 Page 42 of 42