Oakland Faces Up to $674 Million Liability in Coal Terminal Lawsuit

Oakland, California – A recent federal bankruptcy court ruling has found the City of Oakland liable for "tortious interference" in a long-standing dispute over a proposed coal export terminal, potentially costing the city hundreds of millions of dollars. The decision, issued in October 2025 by U.S. Bankruptcy Judge Joan Lloyd, could obligate Oakland to pay between $230 million and $674 million in damages to Insight Terminal Solutions (ITS), a company involved in the terminal development. This financial blow comes as the city already grapples with structural deficits.

The lawsuit stems from Oakland's efforts to block the construction of a bulk cargo terminal at the former Oakland Army Base, intended to ship various goods, including coal, overseas. Despite an existing contract with developer Phil Tagami and his company, Oakland Bulk and Oversized Terminal (OBOT), and a sublease with ITS, city officials actively opposed the project. Judge Lloyd's ruling specifically cited actions by former Mayor Libby Schaaf, former City Councilmember Dan Kalb, and former City Attorney Barbara Parker, who were found to have interfered with the project.

The court noted that city leaders, including current Mayor Barbara Lee, publicly vowed to stop the terminal, which contributed to ITS being forced into bankruptcy. The city's actions, driven by public pressure and environmental concerns over coal transport, led to a breach of contract. "Such position has been reaffirmed and further propagated by Mayor Barbara Lee, who, as recently as March 2025, stated that she would stop a coal terminal from moving forward," the judge wrote.

The City of Oakland has expressed strong disagreement with the ruling. In a statement, Oakland's City Attorney's Office indicated that "The order is subject to an independent review of a federal district judge, and the City looks forward to that review." The exact amount of damages remains undetermined, and the city is expected to pursue an appeal. This legal setback represents a significant financial challenge, with potential damages representing a substantial portion of the city's annual expenditures.