From Watts Up With That?

Essay by Eric Worrall

h/t Charles Park – A judge just cancelled an enormous judgement against the City of Oakland in California – but the reprieve may be temporary.

Oakland might not owe coal company hundreds of millions after new court ruling

A federal judge in Kentucky ruled a bankruptcy court’s judgment, which could have put the city on the hook for hundreds of millions of dollars, was improper. 

by Eli Wolfe Nov. 24, 2025, 4:37 p.m.

Things were looking bleak for Oakland last month after a Kentucky bankruptcy judge ruled that Oakland interfered with a coal developer’s efforts to build an export terminal, forcing them into insolvency. 

The judgment put Oakland on the hook for potentially hundreds of millions of dollars in damages – money the cash-strapped city would have virtually no way of covering without asking voters to approve new bond measures. It also handed a major victory to the coal company, Insight Terminal Solutions. On Monday, the New York Times published a gloomy article speculating that Oakland was headed toward bankruptcy. 

But the city won a reprieve on Friday after a federal district judge who reviewed the case found that the bankruptcy court overstepped its authority. 

In a two-page order, Judge Benjamin Beaton ruled that the bankruptcy court lacked authority to enter a final judgment on core disputes in the case. He also found that the judgment only dealt with liability, not damages, which means that it wasn’t really a “final” judgment. 

…

Oakland lost its other legal battle with developer Phil Tagami, who leads OBOT. A state court granted OBOT the right to keep and extend its lease to the city-owned land to restart the terminal project. Next Tuesday, the City Council will approve a partial settlement to pay OBOT $700,000 in attorney’s fees and costs. The city has also agreed to perform “certain administrative items” relating to the construction and development of the terminal. 

…Read more: https://oaklandside.org/2025/11/24/oakland-coal-company-bankruptcy-judgment-vacated/

Reading the rest of the article, the original judgement could have forced the city to issue bonds to cover their own recklessness. But the battle doesn’t appear to be over yet.

Oakland’s attempt to overturn their own lease to the coal terminal company signed in 2013 led to a substantial corporate bankruptcy, Insight Terminal Solutions, and the parties who took over the lease appear to be gearing up to recover costs and damages. In addition, Oakland’s administration appears to have learned nothing – they appear intent on pursuing further legal action, legal action which could incur even greater costs for the residents of Oakland.

The city’s climate crusade against coal appears to have substantial popular support from the residents of Oakland. I guess we’ll see how strong that support is if the city of Oakland is forced to appeal to voters to help pay all the legal costs and adverse judgements which could be coming their way.