A municipal ban on handling and storing coal at the proposed Oakland Bulk and Oversized Terminal does not violate the Commerce Clause and should be upheld, California Attorney General Xavier Becerra said.
Becerra filed an amicus brief Dec. 8 on behalf of the city of Oakland, which is being sued by the terminal developer. Oakland Bulk and Oversized Terminal's, or OBOT's, lawsuit claims the ban violates the Commerce Clause of the U.S. Constitution as well as federal laws that grant the power to regulate rail transportation to federal agencies, not state or local governments.
The Oakland City Council voted unanimously in June 2016 to prohibit coal at the terminal, a multicommodity port planned for the site of the former Oakland Army Base in California, citing potential health and environmental risks.
"The ordinance is a proper exercise of Oakland’s police powers and is not pre-empted by federal law or barred by the Constitution," Becerra wrote. "It is the city's response to the plight of its residents who will be subject to significant additional pollution from coal and who are currently already unfairly burdened by industrial pollution."
Becerra argued that the ban does not violate the Commerce Clause because it applies only to Oakland, not to other jurisdictions; it does not discriminate against outside interests in favor of competing local interests; and it does not unduly burden interstate commerce. Addressing the terminal's claim that the ban improperly usurps federal authority, he wrote that since OBOT is not a rail carrier, it does not fall under the jurisdiction of the Surface Transportation Board and can be regulated by state and local governments.
He also cited case law where state laws protecting public health and safety were upheld as long as they did not unreasonably interfere with rail transportation and said the same standard applies in this case.
A spokesman for Phil Tagami, president and CEO of California Capital and Investment Group, a corporate member of OBOT that is leading the development of the port, earlier told S&P Global Market Intelligence that Tagami would no longer comment on the pending litigation.