                FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT


OAKLAND BULK & OVERSIZED                Nos. 18-16105
TERMINAL, LLC,                               18-16141
               Plaintiff-Appellee,
                                           D.C. No.
                 v.                     3:16-cv-07014-
                                              VC
CITY OF OAKLAND,
             Defendant-Appellant,
                                           OPINION
                and

SIERRA CLUB; SAN FRANCISCO
BAYKEEPER,
  Intervenor-Defendants-Appellants.

      Appeal from the United States District Court
        for the Northern District of California
       Vince Chhabria, District Judge, Presiding

      Argued and Submitted November 12, 2019
              San Francisco, California

                  Filed May 26, 2020
2                 OBOT V. CITY OF OAKLAND

Before: Carlos T. Bea and Kenneth K. Lee, Circuit Judges,
        and Lawrence L. Piersol, * District Judge

                     Opinion by Judge Lee;
                    Dissent by Judge Piersol


                          SUMMARY **


                       Breach of Contract

    The panel affirmed the district court’s judgment
following a bench trial holding that the City of Oakland
breached an agreement to have Oakland Bulk & Oversized
Terminal develop a commercial rail-to-ship terminal on the
site of a shuttered U.S. Army base near the bay.

    After an announcement that coal would be transported
through the terminal, the City held public hearings, passed
an ordinance and adopted a resolution that barred coal at the
facility, citing a provision in the parties’ agreement that
allowed it to impose new regulations if “substantial
evidence” showed that a project would be “substantially
dangerous” to “health and safety.” The district court held a
bench trial and found that the City’s health and safety
determination about coal was “riddled with inaccuracies,
major evidentiary gaps, erroneous assumptions, and faulty
analyses.” The district court determined that the City

    *
      The Honorable Lawrence L. Piersol, United States District Judge
for the District of South Dakota, sitting by designation.
    **
       This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
                OBOT V. CITY OF OAKLAND                      3

breached the agreement with Oakland Bulk & Oversized
Terminal (OBOT) when it passed the resolution barring coal,
and it declared the resolution invalid.

    In determining the appropriate standard of review on
appeal, the panel held that it would review the case as a
breach of contract dispute rather than an administrative law
proceeding, and therefore it would give deference to the trial
court’s factual findings. The panel rejected the City’s
contention that the district court erred by applying the
traditional rules that govern a breach of contract case rather
than adhering to administrative law review principles. The
panel therefore held that the district court owed no deference
to the City’s factual determinations and did not err in
considering extra-record evidence beyond what was
presented at the public hearings.

    The panel held that the district court did not clearly err
in finding that the City lacked substantial evidence of a
substantial danger to health or safety when it enacted its
resolution barring coal. Specifically, the panel held that the
district court did not err in finding that: (1) the City’s
estimates of dust emission from the transported coal were
unreliable; (2) the report showing that OBOT’s proposed
coal operation would cause particulate matter to exceed state
standards was flawed; (3) the evidence the City relied on to
show that any volume of coal emission was harmful did not
credibly establish a substantial danger; and (4) the City’s
evidence pertaining to the risk of coal fire was speculative,
contradicted by the record and lacking consideration of the
fire department’s oversight. The panel found that the other
expert evidence in the record suffered from the same flaws
that the district court plausibly identified in its findings of
fact.
4                OBOT V. CITY OF OAKLAND

    The panel considered two alternative arguments brought
by Intervenors Sierra Club and San Francisco Baykeeper.
The panel held that the Intervenor’s proposed interpretation
of Section 3.4.2 of the agreement, as limiting only the City’s
regulation of land use, was inconsistent with the language of
the agreement as a whole. The panel held that the plain
language of the agreement manifested a clear intent of the
parties to freeze all existing regulations, not just land use
regulations. The panel further found that the district court
acted within its discretion in declining to consider
Intervenors’ additional attempt to void the agreement.
Finally, the panel held that the district court did not abuse its
discretion in denying intervention of right.

    Dissenting, District Judge Piersol stated that it was error
for the trial court to admit and consider evidence pertaining
to the health and safety effects of coal handling and storage
upon nearby residents that was not submitted to the City.
Judge Piersol stated that based on the entire record before
the City, a reasonable mind might accept as adequate the
City’s conclusion that coal handling and storage at the
terminal would pose a substantially dangerous threat to the
health and safety to community members. Accordingly,
Judge Piersol would reverse the district court’s judgment and
remand.
               OBOT V. CITY OF OAKLAND                   5

                       COUNSEL

Stacey M. Leyton (argued), James M. Finberg, and Andrew
Kushner, Altshuler Berzon LLP, San Francisco, California;
Barbara J. Parker, City Attorney; Maria S. Bee, Chief
Assistant City Attorney; Jamilah A. Jefferson, Senior
Deputy City Attorney; Office of the City Attorney, Oakland,
California; for Defendant-Appellant.
Colin C. O’Brien (argued), Adrienne Bloch, Heather M.
Lewis, and Marie E. Logan, Earthjustice, San Francisco,
California; Jessica Yarnall Loarie and Joanne Spalding,
Sierra Club, Oakland, California; Daniel P. Selni, Los
Angeles, California; for Intervenor-Defendants-Appellants.

Robert P. Feldman (argued) and Andrew P. March, Quinn
Emanuel Urquhart & Sullivan LLP, Redwood Shores,
California; William B. Adams and Meredith M. Shaw,
Quinn Emanuel Urquhart & Sullivan LLP, New York, New
York; for Plaintiff-Appellee.

Tamara S. Galanter and Sara A. Clark, Shute Mihaly &
Weinberger LLP, San Francisco, California; Carol R. Victor,
East Bay Regional Park District, Oakland, California; for
Amicus Curiae East Bay Regional Park District.

Xavier Becerra, Attorney General; Christie Vosburg,
Supervising Deputy Attorney General; Scott Lichtig and
Suma Peesapati, Deputy Attorneys General; Office of the
Attorney General, San Diego, California; for Amicus Curiae
State of California.

Jonathan C. Evans, Center for Biological Diversity,
Oakland, California, for Amici Curiae West Oakland
Environmental Indicators Project, Asian Pacific
Environmental Network, No Coal in Oakland, West Oakland
6              OBOT V. CITY OF OAKLAND

Neighbors, Communities for a Better Environment, and
Center for Biological Diversity.

James R. Williams, County Counsel; Greta S. Hansen, Chief
Assistant County Counsel; Susan P. Greenberg, Deputy
County Counsel; Office of the County Counsel, County of
Santa Clara, San José, California; for Amicus Curiae
California State Association of Counties.
Kenneth J. Rumelt, Vermont Law School, Environmental &
Natural Resources Law Clinic, South Royalton, Vermont,
for Amici Curiae Arthur Chen, Wendel Brunner, Wendy J.
Parmet, Julia Walsh, Claire Broome, Thomas McKone, and
John Swartzberg.

Kenneth B. Bley, Cox Castle & Nicholson LLP, Los
Angeles, California, for Amicus Curiae California Building
Industry Association.

Michael B. Kimberly and Matthew A. Waring, Mayer
Brown LLP, Washington, D.C.; Katie Sweeney, National
Mining Association, Washington, D.C.; Ellen Steen and
Travis Cushman, American Farm Bureau Federation,
Washington, D.C.; Peter C. Tolsdorf and Leland P. Frost,
Manufacturers’ Center for Legal Action, Washington, D.C.;
Richard Moskowitz, American Fuel & Petrochemical
Manufacturers, Washington, D.C.; for Amici Curiae
National Mining Association, National Association of
Manufacturers, American Farm Bureau Federation, and
American Fuel & Petrochemical Manufacturers.
                OBOT V. CITY OF OAKLAND                      7

                         OPINION

LEE, Circuit Judge:

    In a bid to revitalize the site of a shuttered U.S. Army
base near the bay, the City of Oakland agreed to have
Oakland Bulk & Oversized Terminal, LLC (“OBOT”)
develop a commercial terminal there. But amid public
backlash after the announcement that coal would be
transported through the terminal, Oakland moved to block
coal there, citing a provision in the agreement that allows it
to impose new regulations if “substantial evidence” shows
that the project would be “substantially dangerous” to
“health and safety.”

    At the San Francisco federal courthouse just miles across
the bay from the site of the proposed terminal, the district
court held a bench trial on whether Oakland breached its
contract with OBOT. The court ruled against Oakland,
finding that its health and safety determination about coal
was “riddled with inaccuracies, major evidentiary gaps,
erroneous assumptions, and faulty analyses.”

    The City of Oakland and Intervenors Sierra Club and San
Francisco Baykeeper appeal the district court’s ruling. We
have jurisdiction under 28 U.S.C. § 1291. A key legal issue
is whether we defer to the district court’s factual findings or
the City’s health and safety findings. Because this is a
breach of contract dispute — and not an administrative law
proceeding — we must defer to the district court’s factual
findings, which were not clearly erroneous. We affirm.
8                OBOT V. CITY OF OAKLAND

                      BACKGROUND

I. Oakland contractually agrees to have a former Army
   base developed into a commercial terminal.

     After the Oakland Army Base closed in 1999, the City of
Oakland acquired some of its land. The City initiated a
redevelopment plan in West Oakland to counter the physical
and economic blight caused by closure of the base. As part
of this plan, the City in 2012 entered into a Lease Disposition
and Development Agreement with OBOT’s predecessor-in-
interest. 1 This agreement envisioned the development of a
rail-to-ship terminal on the West Gateway portion of the
closed base, which lies south of the Bay Bridge Toll Plaza
and west of West Oakland.

    In 2013, Oakland and OBOT entered into a Development
Agreement (the “Agreement”), which gave OBOT the “right
to develop the Project in accordance with . . . the City
Approvals and the Existing City Regulations.” Under
California law, development agreements are intended to
assure that, “upon approval of the project, the applicant may
proceed with the project in accordance with existing
policies, rules and regulations.” Cal. Gov. Code § 65864(b).
In other words, governmental regulations are frozen in
recognition that a private party is investing substantial
resources for the development project. This eliminates the
“lack of certainty” that can “discourage investment in and
commitment to comprehensive planning which would make
maximum efficient utilization of resources.” Id. § 65864(a).
To that end, California Government Code Section 65866(a)
provides that “those rules, regulations, and official policies

    1
      OBOT and its predecessor-in-interest, Prologis CCIG Oakland
Global, LLC, are together referred to here as “OBOT.”
               OBOT V. CITY OF OAKLAND                   9

in force at the time of execution” continue to apply to the
project under a development agreement. Id. § 65866(a).

    Consistent with this regulatory framework, the
Agreement froze existing regulations as to OBOT’s
proposed terminal, except to provide under Section 3.4.2
that:

       City shall have the right to apply City
       Regulations adopted by City after the
       Adoption Date, if such application (a) is
       otherwise permissible pursuant to Laws
       (other than the Development Agreement
       Legislation), and (b) 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.

(emphasis added). Importantly, the Agreement did not limit
the types of bulk goods that could be shipped through the
terminal. And prior to its execution, Oakland had some
indication that coal was one of the potential commodities
that might be handled.

II. Amid backlash at coal being shipped through the
    terminal, Oakland moves to block the proposed plan.

   In 2014, OBOT agreed to sublease the terminal to
Terminals and Logistics Solutions, LLC (“TLS”), a
subsidiary of a Utah coal company. TLS intended to ship
commodities, including western bituminous coal from Utah,
10             OBOT V. CITY OF OAKLAND

through the terminal. TLS delivered a letter to the City
outlining its plan for the terminal.

    Once word spread that coal would be shipped through
the terminal, public and political pressure mounted against
this plan due to concern that coal dust would affect the air
quality of West Oakland residents and those working at the
terminal. In September 2015, Oakland held an initial public
hearing to assess the potential health and safety effects of
OBOT’s proposed coal operations. In connection with the
hearing, the city received: (i) an expert report by HDR
Engineering supporting the project; (ii) expert reports by
Dr. Phyllis Fox and Sustainable Systems Research, LLC
opposing the project; and (iii) numerous comments from the
public.

   Following the hearing, Oakland solicited additional
comments and evidence. It retained Environmental Science
Associates (“ESA”) to analyze the evidence and evaluate the
health and safety risks from the proposed coal operations.
Separately, a councilmember also commissioned Dr. Zoe
Chafe to prepare a report.

    In June 2016, Oakland held a second public hearing. In
connection with this hearing, Oakland received expert
reports by ESA, Dr. Chafe, and the Public Health Advisory
Panel (“PHAP”), all opposed to the project. The ESA report
— a highly technical 160-page expert report — was publicly
released one business day before the hearing.

    Following the hearing, Oakland enacted Ordinance No.
13385 (the “Ordinance”), which categorically barred bulk
material facilities in Oakland from maintaining, loading,
transferring, storing or handling any coal. The City then
invoked Section 3.4.2 of the Agreement and adopted
Resolution No. 86234 (the “Resolution”), which applied the
                OBOT V. CITY OF OAKLAND                     11

Ordinance specifically to OBOT’s terminal. The passage of
the Ordinance and Resolution thus barred coal at the
terminal, even though the Agreement itself did not prevent
it.

III.   OBOT sues Oakland for breach of contract, and
       the district court rules against Oakland after a
       bench trial.

    OBOT sued Oakland in December 2016, alleging that
the City breached the Agreement, and that the Ordinance and
Resolution violated the Commerce Clause and were
preempted by federal law. Shortly after Oakland filed a
motion to dismiss, Sierra Club and Baykeeper moved to
intervene. The district court denied intervention of right, but
granted permissive intervention limited to “defending
against the developer’s claims,” which did “not include the
right to bring counterclaims, the right to bring cross-claims,
or the right to prevent the case from being dismissed on a
stipulation between the developer and the City.”

    The court denied Oakland’s and Intervenors’ motions to
dismiss. Following expedited discovery, the court denied
the parties’ cross-motions for summary judgment on the
breach of contract claim. The court scheduled a bench trial,
and took the constitutional and federal preemption claims
under submission pending resolution of the breach of
contract claim.

    At trial, the court heard testimony from experts and other
witnesses proffered by both sides. Following post-trial
briefing, the court issued its findings of fact and conclusions
of law. The court found that Oakland lacked substantial
evidence that the proposed coal operations posed a
substantial health or safety danger. As the court put it, the
record is “riddled with inaccuracies, major evidentiary gaps,
12              OBOT V. CITY OF OAKLAND

erroneous assumptions, and faulty analyses, to the point that
no reliable conclusion about health or safety dangers could
be drawn from it.” The court, as a result, determined that
Oakland breached the Agreement when it passed the
Resolution, and it declared the Resolution invalid.

               STANDARD OF REVIEW:

       Deference to the Trial Court or to the City?

    Standard of review is pivotal to the outcome of this
appeal: Should this court review this case as a breach of
contract dispute in which we must give deference to the trial
court’s factual findings — or as an administrative law
proceeding in which the City’s health and safety findings are
afforded deference?

    Appellants contend that the district court erred by
applying the traditional rules that govern a breach of contract
case. According to Appellants, the district court should have
instead adhered to administrative law review principles by
limiting evidence to the record before the city council when
it enacted the disputed Resolution and by giving special
deference to the City’s health and safety determinations.
Appellants argue that this deferential standard of review is
mandated both by the terms of the Agreement and as a matter
of law. We disagree.

    Section 3.4.2 of the Agreement provides that Oakland
may apply a new regulation to OBOT only if the City
determines, based on “substantial evidence,” that the
absence of the regulation will result in a condition
substantially dangerous to health or safety. The district court
found that “substantial evidence” refers only to the amount
of evidence required to make a health and safety
determination (e.g., “substantial evidence” vs. “clear and
                OBOT V. CITY OF OAKLAND                    13

convincing evidence”). In contrast, Appellants assert that
the parties, in using the phrase “substantial evidence,”
incorporated a judicial standard of review used in
administrative law proceedings into Section 3.4.2. This
interpretation of the Agreement is untenable for several
reasons.

     First, the plain language of Section 3.4.2 does not
support Appellants’ position. See Cal. Civ. Code § 1638
(“The language of a contract is to govern its interpretation,
if the language is clear and explicit, and does not involve an
absurdity.”). It refers to “substantial evidence,” not
“substantial evidence review.” Moreover, the provision
states that “substantial evidence” must guide the City’s
determination to apply new regulations to OBOT. Nowhere
in Section 3.4.2 does it state that “substantial evidence” is
the standard of review that governs a court’s determination
of a claim of breach. And using the term “substantial
evidence” to describe the quantum of evidence makes sense:
The parties agree that “substantial evidence” has an
established meaning under California law as evidence that is
“reasonable in nature, credible, and of solid value.” Put
another way, the term “substantial evidence” in the
Agreement means that the City must rely on evidence that is
“reasonable in nature, credible, and of solid value” in
determining whether (in this case) transportation of coal
through the terminal poses a substantial danger to health or
safety. It does not speak to the judicial standard of review.

    Second, other parts of the Agreement show that, where
the parties intended to impose parameters on litigation, they
did so expressly. For example, Section 14.14 provides that
any challenge to a “termination, modification, or
amendment” of the Agreement must be by administrative
mandamus under California Code of Civil Procedure Section
14              OBOT V. CITY OF OAKLAND

1094.5(c) — a statutory provision that invokes “substantial
evidence” judicial review. See Cal. Code Civ. P. § 1094.5(c)
(“Where it is claimed that the findings are not supported by
the evidence, in cases in which the court is authorized by law
to exercise its independent judgment on the evidence, abuse
of discretion is established if the court determines that the
findings are not supported by the weight of the evidence. In
all other cases, abuse of discretion is established if the court
determines that the findings are not supported by substantial
evidence in the light of the whole record.”). Section 14.14
also limits venue for such actions to the Superior Court of
the County of Alameda. Section 3.4.2, in telling contrast,
contains no language about the terms of potential litigation.
See Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970, 975
n.2 (9th Cir. 2010) (“[T]he whole of a contract is to be taken
together, so as to give effect to every part, if reasonably
practicable, each clause helping to interpret the other.”)
(quoting Cal. Civ. Code § 1641).

    And third, contracting parties cannot dictate to a federal
court the standard of review that governs a case. See
Kyocera Corp. v. Prudential-Bache Trade Servs., Inc.,
341 F.3d 987, 1000 (9th Cir. 2003) (“[P]rivate parties lack
the power to dictate how the federal courts conduct the
business of resolving disputes.”) (citing K & T Enters., Inc.
v. Zurich Ins. Co., 97 F.3d 171, 175 (6th Cir. 1996) (“The
parties, however, cannot determine this court's standard of
review by agreement. Such a determination remains for this
court to make for itself.”) (other citations omitted). Thus,
even if the parties intended to impose a “substantial
evidence” standard of review under Section 3.4.2 — which
the language of the Agreement does not support — they
lacked the authority to do so. See id.
                OBOT V. CITY OF OAKLAND                    15

    We next consider whether “substantial evidence”
judicial review applies here as a matter of law. Because we
are aware of no California Supreme Court case that
addresses whether administrative law review principles
apply to a breach of contract action challenging an
administrative decision, we must predict how that court
would decide this issue. See Gravquick A/S v. Trimble
Navigation Int’l Ltd., 323 F.3d 1219, 1222 (9th Cir. 2003)
(“In the absence of a controlling California Supreme Court
decision, the panel must predict how the California Supreme
Court would decide the issue, using intermediate appellate
court decisions, statutes, and decisions from other
jurisdictions as interpretive aids.”).

    Two California Court of Appeal decisions provide useful
guidance. In Shaw v. Regents of University of California,
the defendant university contended that, because the plaintiff
was challenging an administrative decision by a state
agency, the trial court erred in performing “a straightforward
contract analysis” rather than applying the deferential
mandamus standard of review. 58 Cal. App. 4th 44, 51
(1997). The Court of Appeal rejected this argument, holding
that because “mandamus is not an appropriate remedy for
enforcing a contractual obligation against a public entity,”
the trial court “correctly applied contract principles in
resolving the parties’ [contract] dispute.” Id. at 52.

    Similarly, in 300 DeHaro Street Investors v. Department
of Housing & Community Development, the Court of Appeal
reaffirmed that the deferential mandamus framework does
not apply to a contract action. 161 Cal. App. 4th 1240
(2008). There, the plaintiff alleged that a state agency’s
denial of a requested rent adjustment breached a regulatory
contract with the agency. Id. at 1243–48. Rejecting the
agency’s arguments, the court held that mandamus rules did
16              OBOT V. CITY OF OAKLAND

not apply because “plaintiff does not challenge a mere
administrative decision, but an administrative decision
concerning a provision of a contract to which the plaintiff
and defendant were parties.” Id. at 1254–57.

    Our court previously confronted facts similar to those
here in a case that applied Arizona law. In Pure Wafer Inc.
v. City of Prescott, the plaintiff entered into a development
agreement with the City of Prescott for the construction of a
metal refinishing plant. 845 F.3d 943, 946 (9th Cir. 2017).
The development agreement protected the plaintiff from
future changes to certain city regulations, most pertinently
permitting the discharge of up to 100 mg/L of fluoride. Id.
at 947. When the city later passed an ordinance limiting
companies to 16.3 mg/L of fluoride discharge, the plaintiff
sued for breach of contract. Id. at 949–50. Following a
judgment in favor of the plaintiff after a bench trial, we
reviewed the trial court’s findings of fact for clear error. Id.
at 953–58. Notably, we did not apply administrative law
standard of review principles and did not give deference to
the city. Id.

    Tellingly, all of the cases cited by Appellants discuss the
prevailing standard of review in a mandamus (or similar)
context, which is not at issue here. See, e.g., W. States
Petroleum Assn. v. Superior Court, 9 Cal. 4th 559, 564
(1995) (“We granted review to determine whether evidence
not contained in the administrative record is admissible in a
traditional mandamus action[.]”). The relevant issue here is
whether that standard extends by law to the breach of
contract context. Appellants offer no authority on this point,
and provide no meaningful counter to the sensible
delineation articulated in Shaw and 300 DeHaro Street
Investors between the judicial treatment of mandamus
actions and contract disputes.
                OBOT V. CITY OF OAKLAND                    17

    Moreover, showing deference to the government in this
type of breach of contract dispute would unfairly tilt the
scales towards the government. See Tonkin Constr. Co. v.
Cty. of Humboldt, 188 Cal. App. 3d 828, 831–32 (1987) (“A
contract between a governmental body and a private party is
to be construed by the same rules which apply to the
construction of contracts between private persons, and the
public entity is bound in the same manner as an individual.”)
(citations omitted).

     Indeed, deferring to a government agency’s findings
would effectively create an escape hatch for the government
to walk away from contractual obligations if political winds
shift or if it faces an unexpected public backlash against a
deal negotiated with a private party. Through self-serving
regulatory findings insulated by judicial deference, the
government would stack the odds in its favor in any ensuing
litigation. The house (of government) would always win,
and private parties would be left to the whims of a regulatory
roulette. Cf. United States v. Winstar Corp., 518 U.S. 839,
895 (1996) (“[A]llowing the Government to avoid
contractual liability merely by passing any ‘regulatory
statute’ would flout the general principle that, ‘when the
[Government] enters into contract relations, its rights and
duties therein are governed generally by the law applicable
to contracts between private individuals.’”) (citation
omitted). Such a rule would undermine California’s public
policy and statutory mandate that regulations should
generally remain frozen after approval of a development
project to avoid uncertainty that can “discourage investment
in and commitment to comprehensive planning which would
make maximum efficient utilization of resources.” Cal.
Gov. Code § 65864(a).
18                 OBOT V. CITY OF OAKLAND

    In light of these factors, and in the absence of
contravening authority, we determine that the California
Supreme Court would not apply administrative law review
principles as a matter of law to a contract action challenging
an administrative decision. The district court thus owed no
deference to the City’s factual determinations here and did
not err in considering extra-record evidence beyond what
was presented at the public hearings. 2

    Since this action was decided by bench trial, we review
the district court’s factual findings for clear error and its
conclusions of law de novo. See Navajo Nation v. U.S.
Forest Serv., 535 F.3d 1058, 1067 (9th Cir. 2008). “[W]hen
an appellate court reviews a district court’s factual findings,
the abuse-of-discretion and clearly erroneous standards are
indistinguishable.” United States v. Hinkson, 585 F.3d 1247,
1259 (9th Cir. 2009) (citation omitted). A district court
abuses its discretion if “application of the correct legal

     2
       The dissent suggests that the Agreement barred the district court
from considering extra-record evidence for any purpose. No such
blanket restriction exists in the Agreement. Rather, Section 3.4.2 focuses
the breach of contract inquiry on whether the City relied on evidence that
was “substantial,” without limiting the tools a reviewing court may use
to make that assessment.

     The district court struck a proper balance by considering extra-
record evidence, “to a limited extent,” for the sole purpose of “shed[ding]
light on the adequacy of the evidence that was actually before the City
Council.” In other words, it was strictly employed to evaluate the
credibility of the record evidence, not to supplement the record with new
information regarding the safety of OBOT’s proposed coal operations.
That careful balance was appropriate because the 160-page ESA expert
report — which was the key scientific report relied upon by the City —
was issued one business day before the City voted on the Ordinance,
depriving OBOT of an adequate opportunity to respond to the ESA
report’s analysis and conclusions.
                OBOT V. CITY OF OAKLAND                     19

standard was (1) ‘illogical,’ (2) ‘implausible,’ or (3) without
‘support in inferences that may be drawn from the facts in
the record.’” Id. at 1262 (citation omitted).

                       DISCUSSION

I. The District Court Did Not Clearly Err in Finding
   That Oakland Breached the Contract.

    The sole issue presented by OBOT’s breach of contract
claim is whether Oakland enacted the Resolution, under
Section 3.4.2 of the Agreement, based on “substantial
evidence” of a condition “substantially dangerous” to the
health or safety of OBOT’s terminal users or adjacent
neighbors. The parties agree that the district court correctly
defined “substantial evidence” as evidence that is
“reasonable in nature, credible, and of solid value.”

    The district court found that Oakland lacked “substantial
evidence” under Section 3.4.2 because the record it relied on
was “riddled with inaccuracies, major evidentiary gaps,
erroneous assumptions, and faulty analyses, to the point that
no reliable conclusion about health or safety dangers could
be drawn from it.” And because we are reviewing factual
findings after a trial, we must give those findings substantial
deference. We cannot reverse merely because we would
have reached a contrary conclusion based on the evidence.
See Minidoka Irrigation Dist. v. Dep’t of Interior, 406 F.3d
567, 572 (9th Cir. 2005). Rather, we can reverse only if the
district court’s findings are clearly erroneous to the point of
being illogical, implausible, or without support in inferences
from the record. See Hinkson, 585 F.3d at 1251. In
reviewing the trial record in its entirety, we determine that
the district court’s factual findings were not clearly
erroneous.
20              OBOT V. CITY OF OAKLAND

     A. State Emissions Standards

    The parties focus heavily on whether OBOT’s coal
operations would exceed California’s “threshold of
significance” of 10 tons per year of particulate matter 2.5
(“PM 2.5”) emissions. Cal. Code Regs. tit. 17, § 70200. In
layman’s terms, the issue is whether the amount of dust from
the transported coal would surpass state standards.
Appellants rely on the City’s ESA expert report, which
concluded that the project would exceed California’s
standard by generating over 20 tons of PM 2.5 emissions
annually: 6 tons from rail transport, 11.7 tons from staging,
and 2.7 tons from terminal operations. The district court,
however, plausibly found these emissions estimates to be
unreliable based on five flaws in ESA’s analysis.

        1. Covers and Surfactants

    The court determined it was a “big mistake” for ESA,
Oakland’s expert, not to consider OBOT’s proposed control
measures that would potentially mitigate the dust from the
transported coal. Specifically, the court pointed to two
measures that OBOT had committed to using: (i) rail car
covers that envelop the transported coal; and (ii) chemical
dust suppressants (“surfactants”) to keep the coal intact
during rail transport and staging. These steps would mitigate
the coal dust that would otherwise flow into the air,
according to OBOT. But ESA refused to consider these two
mitigation measures in calculating estimated emissions from
the coal.

    Appellants offer two justifications for ESA’s decision
not to factor these controls into its emissions calculations.
First, they contend there was no guarantee that OBOT would
actually employ rail covers or surfactants. OBOT, however,
had represented to the City in writing that it was prepared to
                OBOT V. CITY OF OAKLAND                      21

enter into a contract with Oakland that mandated the use of
both covers and surfactants, with the penalty of a default
being the termination of OBOT’s ground lease. This
evidence provided the district court with a reasonable basis
to conclude that the absence of a guarantee did not justify the
wholesale disregard of these control measures in ESA’s
analysis.

    Second, Appellants argue that no credible scientific
evidence supports the efficacy of covers or surfactants. The
district court, however, reasoned that the “lack of existing
data about the effectiveness of a new technology . . . is not
enough to assume them away.” The record adequately
supports this finding, particularly with respect to surfactants.
In a study cited by ESA, the BNSF Railway Company
concluded that surfactants generate a coal dust suppression
rate of 75% to 93%. ESA, however, dismissed the study
based on certain data reporting deficiencies (e.g., track
gradient and weather conditions), coal type used, and the
degradation of chemicals in transit. But as the district court
noted, given the magnitude of the potential impact of
surfactants, ESA should have employed a reasonable
estimate that accounted for its criticisms of the existing data.
Simply downgrading a possible 75%–93% mitigation effect
to 0% created a major flaw. The court’s refusal to accept
ESA’s rejection of the mitigation effect is precisely the kind
of evidence weighing a trier of fact is supposed to do.

       2. Coal Type and Threshold Friction Velocity

    The district court also determined that ESA selected the
wrong coal type in its emissions calculation for the staging
phase, which resulted in an incorrect “threshold friction
velocity” being used as an input. In less technical terms,
some types of coal are “dustier” than others, and Oakland’s
expert selected the wrong (i.e., dustier) coal in estimating the
22              OBOT V. CITY OF OAKLAND

emissions. The potential swing in the resulting emissions
number — from 11.7 tons to 0.68 tons per year — could
single-handedly have brought ESA’s total emissions
calculation within California’s “threshold of significance” of
10 tons per year.

    Sufficient evidence in the record supports the court’s
conclusion. OBOT’s expert credibly testified that a different
coal type from the one selected by ESA would have more
closely resembled the coal that OBOT planned to transport.
ESA’s selection, in contrast, reflected coal that had “been
crushed under heavy equipment, bulldozers, et cetera.” Not
surprisingly, such crushed coal emits much more dust than
other types of coal. Appellants do not contend that this
testimony was rebutted in the record, but instead argue that,
in a battle of experts, the court should have deferred to the
city’s experts under a “substantial evidence” review akin to
that used in administrative proceedings.              Because
“substantial evidence” judicial review does not apply here,
Appellants’ argument fails. We hold that the district court
did not clearly err in finding that ESA erred in its selection
of coal type. See United States v. Elliott, 322 F.3d 710, 715
(9th Cir. 2003) (“Where there are two permissible views of
the evidence, the factfinder’s choice between them cannot be
clearly erroneous.”) (citation omitted).

       3. Rate of Emission During Rail Transport

    The district court further criticized ESA’s calculation of
rail transport emissions because it assumed constant wind
and train speeds for the entire trip between Utah and
Oakland, rather than accounting for local conditions.
OBOT’s expert opined that factoring in local conditions
would have reduced ESA’s emissions estimates for rail
transport from 6 tons to 0.1 tons per year. Appellants’ only
response to this is that one of its other experts (PHAP)
                OBOT V. CITY OF OAKLAND                     23

accounted for local wind and train speeds in its analysis. But
this only further undermines the validity of ESA’s emissions
estimates, as it reinforces that ESA could and should have
employed those variables. The court therefore did not
clearly err in this finding.

       4. Best Available Control Technology for Terminal
          Operations

    The district court identified an apparent calculation error
in ESA’s emissions estimates for terminal operations.
ESA’s report acknowledges that this calculation should
account for the use of best available control technology,
which would reduce terminal emissions by up to 99% (or
2.43 tons annually). But ESA’s own spreadsheets appear to
indicate that, instead of using the reduced figure, ESA
errantly applied the pre-reduction number.

    Appellants do not attempt to explain this discrepancy.
They contend instead that, notwithstanding the apparent
inconsistency, the court should have deferred to ESA’s
calculations, and that even if this error occurred, it was
relatively small in impact. As discussed above, the court
owed no such deference to Oakland’s experts. And while
subtracting 2.43 tons per year would not by itself bring
ESA’s calculations down to a state-compliant level, it is not
insignificant and has an incremental effect on ESA’s
credibility. Based on this record, it was not clear error for
the court to conclude that ESA’s calculation error for
terminal operations further undermined the reliability of its
overall analysis.

       5. Air District Authority to Regulate

    It is undisputed that ESA’s calculations did not account
for regulations that the Bay Area Air Quality Management
24                OBOT V. CITY OF OAKLAND

District might impose on OBOT. Appellants argue,
however, that the record offers no evidence to suggest that
the Air District would apply any meaningful emissions-
reducing regulations to the terminal.

    It was not unreasonable for the district court to conclude
that ESA should have at least considered the potential
impact of Air District regulation. In relative terms, we view
this as a less significant critique of the ESA report. But in
conjunction with the four other significant flaws in ESA’s
analysis, the record provides ample support for the district
court to have plausibly concluded that ESA failed to present
credible evidence that OBOT’s proposed coal operations
would exceed California’s “threshold of significance” for
PM 2.5 emissions.

     B. State and National Air Quality Standards

    Appellants contend that the PHAP report shows that
OBOT’s proposed coal operations would also cause the PM
2.5 concentration in West Oakland to exceed the state and
national Ambient Air Quality Standard of 12 micrograms per
cubic meter (μg/m3), averaged over three years. PHAP first
extrapolated from an Air District study that found the current
PM 2.5 concentration in West Oakland to be 11.5 μg/m3. It
then applied the findings of a separate study of coal-carrying
rail cars near the Columbia River Gorge in Washington
State, and concluded that the transport of coal for OBOT’s
operations would increase the PM 2.5 concentration in West
Oakland between 0.25 and 0.625 μg/m3 — bringing the
resulting total near or above the state and national standard. 3


     3
      Appellants reference in passing the World Health Organization
standard of 10 μg/m3. But given that, according to PHAP, West Oakland
                   OBOT V. CITY OF OAKLAND                            25

    The district court found PHAP’s analysis to be flawed
because it carried over data and assumptions from a
dissimilar situation. Specifically, in incorporating the
Washington State study, PHAP did not sufficiently account
for local conditions, controls, or the fact that the study
assessed a “far dustier” type of coal. The court’s overall
assessment is plausible. Under PHAP’s conclusion that the
PM 2.5 concentration will increase by 0.25 to 0.625 μg/m3,
a majority of that range would keep West Oakland compliant
with the state and national standard. It was therefore
reasonable for the court to determine that PHAP’s use of a
“far dustier” type of coal in its calculation rendered it
unreliable in showing a likely violation of the standard —
particularly given, as discussed above, the significant
potential impact of threshold friction velocity (which
correlates to coal type) on the resulting emissions result.4
See Husain, 316 F.3d at 839 (where evidence is “a close
call,” the district court, “as the trier of fact, was in the best
position to determine which of two plausible explanations
was correct”).




already exceeds that figure, it is unclear how to assess a substantial
danger in relation to the WHO standard (not to mention that both
California and the EPA have implemented a different standard).

    4
      Appellants also briefly reference reports that indicated OBOT’s
operations would cause daily exceedances of the national standard. The
court did not clearly err in rejecting that evidence for failure to
“meaningfully estimate” the number of exceedances that would result,
given that the standard allows for seven exceedances per year. As the
court noted, the expert reports are vague on this point, and do not engage
in any meaningful analysis.
26                 OBOT V. CITY OF OAKLAND

     C. Impact of Incremental Emissions

    The district court rejected Appellants’ argument that any
emission of coal particulate matter poses a substantial danger
to health. The court determined that this view renders
meaningless the word “substantial,” which the court
assigned the dictionary definition of “considerable
importance, size, or worth.” The court further reasoned that,
because this definition is inherently relative, a contextual
standard is needed to assess whether the “substantial”
threshold has been crossed.

    Appellants counter, based on jury instructions given at a
products liability trial, that “substantial” should be defined
as “real and not insignificant.” Operating under this
definition, Appellants argue that there is substantial evidence
of a real danger from any incremental increase of coal
particulate emissions in West Oakland. They also contend
that the court improperly required a comparison to other
sources of emissions in Oakland.

    Under California law, “words of a contract are to be
understood in their ordinary and popular sense, rather than
according to their strict legal meaning; unless used by the
parties in a technical sense, or unless a special meaning is
given to them by usage, in which case the latter must be
followed.” Cal. Civ. Code § 1644. Unlike “substantial
evidence,” the phrase “substantially dangerous” has no
special meaning in the civil context. 5 This is underscored by

     5
       In the criminal context, “substantial danger” is commonly defined
as “a serious and well-founded risk.” See, e.g., People v. Superior Court
(Ghilotti), 27 Cal. 4th 888, 895 (2002). There is no indication that the
parties intended to adopt the criminal law formulation of that phrase. In
any event, this definition is more similar to the one articulated by the
district court than that urged by Appellants.
                OBOT V. CITY OF OAKLAND                     27

the fact that Appellants reached to a decades-old products
liability jury instruction, which has not resurfaced in later
cases. Since there is no indication of any “technical sense”
or “special meaning” in which the phrase was used, the
district court was correct to adopt the ordinary dictionary
definition.

    Appellants misconstrue the district court’s requirement
of a baseline for comparison. While the court did suggest
comparisons to neighboring sources of emissions, these
were simply illustrative examples of how Oakland could
have identified credible evidence of a substantial danger.
Much as Appellants tied their other evidence to state and
national regulatory standards, the court plausibly determined
that some type of reasonable guidepost was needed to
understand if a theorized danger was “substantial.”

     The portions of the expert reports that Appellants rely on
are vague. For example, Dr. Chafe’s report opines that
“[t]here is no safe level of exposure to fine coal dust
particles,” without offering a means of measuring whether
the safety threat posed by OBOT’s operations would be
substantial. ESA similarly — and unhelpfully — states that
“[i]f baseline concentrations of particulate matter are high,
then any contribution from coal dust and coal train engines
is likely to cause health effects.” PHAP offers the more
specific data point that a one microgram per cubic meter
increase in PM 2.5 correlates to a 1.6% increase in
cardiovascular disease mortality, but does not provide any
meaningful alternative to the EPA benchmark at which a
finding a substantial danger could reasonably be made.
Based on this record, the court did not clearly err in finding
that the evidence Oakland relied on to show that any volume
of coal emissions is harmful did not credibly establish a
substantial danger.
28               OBOT V. CITY OF OAKLAND

     D. Risk of Coal Fire

    Appellants rely on four sources for their contention that
substantial evidence showed that the risk of fire from
OBOT’s coal operations would pose a substantial danger:
reports from ESA, Dr. Chafe, PHAP, and Dr. Fox. City OB
at 59–61. The district court, however, found this evidence
to be “speculation,” contradicted by the record, and lacking
consideration of the fire department’s oversight. The record
contains sufficient support for the court’s findings such that
they are not clearly erroneous.

    The district court could have reasonably determined
ESA’s fire risk analysis to be unreliable based on evidence
that its report was curated in a results-driven manner. Much
of the fire risk section was written by ESA’s subcontractor,
Steve Radis. But the report conspicuously omits Mr. Radis’
draft statement that “[m]ajor fires at coal terminals are not
common or widespread,” and instead notes only that
“[m]ajor fires have occurred at terminals located in Los
Angeles, Scotland, and Australia.” The report’s value in
establishing substantial danger was further diminished by its
admission that many of the fires that do occur are “related to
specific coal compositions that are known to have a higher
tendency for spontaneous combustion, such as Powder River
Basin coal from Montana and Wyoming” (as opposed to the
bituminous coal OBOT plans to transport).

    Dr. Chafe opines that bituminous coal “is highly
volatile” and thus “easier to set alight than anthracite with its
low volatile matter content.” But the National Fire
Protection Association’s rating of bituminous coal as a low
fire risk casts doubt on Dr. Chafe’s statements. This is, in
fact, the very rating relied on by the fire department when
responding to emergencies. The court’s decision not to
                OBOT V. CITY OF OAKLAND                     29

credit Dr. Chafe’s report as credible evidence of a fire risk
was therefore plausible. See Elliott, 322 F.3d at 715.

    The vagueness of the other two reports’ descriptions of
fire risk undermines their probative value. PHAP makes
generalized statements, such as “[i]t is not uncommon for
coal to self-heat and begin burning,” “spontaneous
combustion also is possible,” and “[t]here is a non-negligible
risk of explosion and/or fire.” But the report provides no
means of estimating the likelihood of such an event, from
which an assessment of the substantiality of danger could be
made. Similarly, Dr. Fox states that transporting coal in
covered rail cars “could facilitate spontaneous combustion.”
Dr. Fox acknowledges that ventilated tops would reduce the
risk, but then dismisses this mitigation factor based on the
unsupported contention that ventilated tops are “too
expensive.” Viewed in light of the record as a whole — in
particular, considering contrary evidence of bituminous coal
as a low fire risk and the completely ignored element of the
fire department’s oversight of OBOT’s fire safety plan —
the court did not clearly err in determining that these reports
did not rise to the level of substantial evidence of a
substantial danger.

   E. Other Expert Evidence in the Record

    Appellants contend that, in addition to the evidence
discussed above, the record before Oakland when it passed
the Resolution contained other, independently substantial
evidence of a substantial danger. This evidence, however,
suffers from the same flaws that the district court plausibly
identified in its findings of fact.

    Dr. Chafe Report: Dr. Chafe extensively discusses the
danger to health arising from coal dust exposure, but does so
at a generalized level. She does not estimate the emissions
30              OBOT V. CITY OF OAKLAND

that would be created by OBOT’s proposed operations, nor
the resulting impact on air quality for West Oakland or the
terminal. And while the report contends there is “no safe
level of exposure to fine coal dust particles,” it provides no
way to meaningfully assess whether a “substantial” danger
would be created by OBOT. Similarly, while Dr. Chafe
opines that bituminous coal is “highly volatile,” she does not
discuss the likelihood of an explosion or fire other than to
state it is “non-negligible.”

    Dr. Fox Report: Dr. Fox warns that “about 18,200
tons/yr [of coal dust] could be released within the state.” But
she dismisses the mitigating impact of surfactants, despite
acknowledging they can be at least 85% effective, on the
basis that their use has “not been proposed by” OBOT —
which is contradicted by the record. She also provides no
calculation for the relevant West Oakland area. And her
report offers no estimate of the particulate matter (as
opposed to coal dust) that would be emitted, except to state
generally that there would be “[i]ncreased emissions of
diesel particulate matter.”

    Sustainable Systems Report: Sustainable Systems
similarly dismisses surfactants and fails to provide any
estimate of particulate matter emissions. Instead, like
Dr. Fox, Sustainable Systems limits its calculations to coal
dust generally. Notably, Oakland’s expert ESA determined
that Sustainable Systems used incorrect inputs in its
calculations, and had to revise Sustainable Systems’ coal
dust estimates downward.

    Dr. Bart Ostro: The substance of Dr. Ostro’s testimony
to the city council was entirely encompassed within the
PHAP report, which we discussed above. Dr. Ostro, like
PHAP, referenced the Washington State study to opine that
OBOT’s proposed operations would have a harmful impact
                OBOT V. CITY OF OAKLAND                    31

on the air quality of West Oakland. Dr. Ostro made the same
mistake of failing to account for the different coal type used
in the Washington State study, and unlike PHAP did not
even appear to factor in local wind or train speeds. His
testimony was therefore less reliable than PHAP’s report,
which the court plausibly found lacked credibility.

    Based on this record, we determine that the district court
did not clearly err in finding that Oakland lacked substantial
evidence of a substantial danger to health or safety when it
enacted the Resolution.

   F. California Government Code Section 65866

     Intervenors separately assert two alternative arguments,
based on California Government Code Section 65866, that
no breach occurred. The district court correctly rejected the
first argument and acted within its discretion in declining to
reach the latter.

       1. Interpretation of Section 3.4.2

    Section 3.4.2 provides that “City shall have the right to
apply City Regulations adopted by City after the Adoption
Date, if . . .” (emphasis added). Intervenors contend that,
unless the phrase “City Regulations” in the agreement is
limited to land use regulations, Section 3.4.2 runs afoul of a
limitation in Government Code Section 65866 that
development agreements may freeze only land use
regulations. Intervenors thus urge that, to harmonize Section
3.4.2 with California law, “City Regulations” in the
Agreement should be (re)defined as land use regulations.

    Intervenors’ proposed interpretation of Section 3.4.2 is
inconsistent with the language of the Agreement as a whole.
The Agreement expressly defines “City Regulations” as the
32              OBOT V. CITY OF OAKLAND

“General Plan of City, the Oakland Army Base
Redevelopment Plan (as amended prior to the Adoption
Date), Oakland Army Base Reuse Plan (as amended prior to
the Adoption Date), and all other ordinances, resolutions,
codes, rules, regulations and policies in effect as of the
time in question.” (emphasis added). Not in Section 3.4.2,
the definitions section, or anywhere else in the Agreement
does the phrase “City Regulations” distinguish between land
use and non-land use regulations.

    While California law states that a “contract must receive
such an interpretation as will make it lawful,” this mandate
applies only “if it can be done without violating the intention
of the parties.” Cal. Civ. Code § 1643. The plain language
of the Agreement manifests a clear intent by the parties for
Section 3.4.2 to freeze all existing regulations, not just land
use regulations. In addition, as the district court aptly noted,
Oakland expressly invoked Section 3.4.2 in enacting the
Resolution, putting to rest any possible ambiguity as to
intent.

       2. Validity of Section 3.4.2

    The district court declined to consider Intervenors’
argument that, to the extent Section 3.4.2 applies to non-land
use regulations, it is invalid because it conflicts with
Government Code Section 65866. The court determined this
argument to be outside the scope of Intervenors’ permissive
intervention, which was limited to “defending against the
developer’s claims and will not include the right to bring
counterclaims [or] cross-claims.”

    Under Federal Rule of Civil Procedure 24(b), the district
court’s authority “to grant or deny an application for
permissive intervention includes discretion to limit
intervention to particular issues.” Dep’t of Fair Employment
                OBOT V. CITY OF OAKLAND                      33

& Hous. v. Lucent Techs., Inc., 642 F.3d 728, 741 (9th Cir.
2011) (citations omitted). We review limitations imposed
on permissive intervention for abuse of discretion. See id. at
742.

    Intervenors contend they are permitted to argue for the
invalidity of the Agreement within the terms of their limited
scope of intervention because this is a defense to OBOT’s
breach of contract claim. Intervenors’ attempt to void the
Agreement, however, can be construed as an affirmative
cross-claim against Oakland for unconstitutionally
contracting away its police powers. See Hollywood Park
Land Co., LLC v. Golden State Transp. Fin. Corp., 178 Cal.
App. 4th 924, 946 (2009). Given the wide latitude that Rule
24(b) grants in dictating the terms of permissive
intervention, the district court did not abuse its discretion in
determining Intervenors’ argument to be outside their
permitted scope of intervention. See Lucent Techs., 642 F.3d
at 741 (citing Columbus–Am. Discovery Grp. v. Atl. Mut.
Ins. Co., 974 F.2d 450, 469 (4th Cir. 1992) (“When granting
an application for permissive intervention, a federal district
court is able to impose almost any condition.”)).

II. The District Court Did Not Abuse Its Discretion in
    Denying Intervention of Right.

   Intervenors argue that the district court erred in failing to
grant intervention of right in this action. We disagree.

    Federal Rule of Civil Procedure 24(a)(2) entitles
intervention of right when an applicant: (i) timely moves to
intervene; (ii) has a significantly protectable interest related
to the subject of the action; (iii) may have that interest
impaired by the disposition of the action; and (iv) will not be
adequately represented by existing parties. Fed. R. Civ. Pro.
24(a)(2); Prete v. Bradbury, 438 F.3d 949, 954 (9th Cir.
34              OBOT V. CITY OF OAKLAND

2006) (citation omitted). We review de novo the district
court’s denial of intervention of right. United States v. Alisal
Water Corp., 370 F.3d 915, 918 (9th Cir. 2004).

     Adequacy of representation is the sole element at issue
here. To establish inadequate representation, Intervenors
needed to make a “very compelling showing” because: (1) a
governmental entity (Oakland) was already acting on behalf
of their interests in this action: and (2) Intervenors and
Oakland share the same ultimate objective of upholding the
Ordinance and Resolution. See Arakaki v. Cayetano,
324 F.3d 1078, 1086 (9th Cir. 2003) (a “very compelling
showing” is required to rebut a “presumption of adequacy”
when “the government is acting on behalf of a constituency
it represents” or when the applicant and existing party “have
the same ultimate objective”).

    None of Intervenors’ four arguments satisfy this
heightened threshold. First, Intervenors contend that their
narrower interest — a focus on health, safety and
environmental protections, as opposed to Oakland’s broader
concerns that include such matters as the City’s finances and
its contractual relationship with OBOT — rebuts the
presumption of adequacy. But this alone is insufficient. See
Prete, 438 F.3d at 957–58 (applicant must proffer sufficient
“evidence” to show that government will take undesirable
legal position). Intervenors failed to offer persuasive
evidence, at the time of their motion to intervene, that
Oakland’s broader interests would lead it to stake out an
undesirable legal position. The presumption of adequacy
thus remained intact.

     Second, Intervenors argue that Oakland was neither
positioned nor willing to make all of Intervenors’ arguments.
Intervenors identify two such arguments. They point
initially to the fact that Intervenors moved to dismiss
                OBOT V. CITY OF OAKLAND                     35

OBOT’s Commerce Clause claim, while Oakland did not.
But Oakland later incorporated Intervenors’ Commerce
Clause arguments at the summary judgment stage,
conclusively establishing its willingness and ability to take
that position. Intervenors also reference Oakland’s decision
not to join their post-trial argument attacking the validity of
the Agreement. Intervenors, however, failed to identify this
potential argument at the time of their motion, and may not
do so for the first time after trial. See Janes v. Wal-Mart
Stores Inc., 279 F.3d 883, 887 (9th Cir. 2002).

    Third, Intervenors assert that their prior lawsuit seeking
to compel Oakland to perform a CEQA environmental
review of a potential coal terminal rebuts the presumption of
adequacy. This ground for intervention, however, applies
when an issue in the earlier litigation is also the reciprocal
subject of the action in which the applicant seeks to
intervene. See, e.g., Idaho Farm Bureau Fed’n v. Babbitt,
58 F.3d 1392, 1398 (9th Cir. 1995) (environmental groups
granted intervention because the challenged agency rule was
promulgated only as a result of the groups’ earlier lawsuit
against the agency). Whether Oakland needs to engage in a
CEQA review is irrelevant to the issues in this case, and
therefore has no bearing on adequacy of representation.

    Finally, Intervenors state that their expertise in
environmental issues warrants intervention of right. We
rejected a similar argument in Prete. 438 F.3d at 958–59
(specialized knowledge insufficient absent evidentiary
showing that government could not obtain that knowledge
through discovery or experts). Because Intervenors cannot
show that Oakland was unable to acquire the requisite
specialized knowledge to represent Intervenors’ interests,
they cannot rebut the presumption of adequacy.

                         * * * * *
36               OBOT V. CITY OF OAKLAND

    In affirming, we do not opine on the ultimate issue of any
alleged health or safety impact of OBOT’s proposed plan.
Nor do we judge the economic or environmental merits of
the Agreement to develop a commercial terminal that may
house and transport coal. Rather, we affirm, under a clearly
erroneous standard of review, the district court’s bench trial
ruling that Oakland breached the Agreement.

     AFFIRMED.



PIERSOL, District Judge, dissenting:

     I respectfully dissent.

I. Background

     A. The Development Agreement

    After Congress closed the Oakland Army Base, the City
of Oakland initiated redevelopment planning. In 2012, the
City revised its redevelopment plan for the 34 acres (“the
Project Site”) with that analysis never considering the
possibility of coal at the terminal. In fact, in December 2013,
Phil Tagami, an OBOT principal, assured community
members that coal was not part of the redevelopment plan.
In a newsletter, he stated that “It has come to my attention
that there are community concerns about a purported plan to
develop a coal plant or coal distribution facility . . . . This is
simply untrue.” In July 2013, the City and OBOT’s
predecessor-in-interest signed a “Development Agreement”
formalizing its right to develop the Project Site into “a ship-
to-rail terminal designed for the export of non-containerized
bulk goods and import of oversized or overweight cargo.”
                OBOT V. CITY OF OAKLAND                    37

The Development Agreement did not mention coal or any
specific commodity.

    The Development Agreement was adopted pursuant to
the Development Agreement Legislation which permits a
city or county to “enter into a development agreement” with
any property owner “for the development of the property.”
Cal. Gov’t Code § 65865. The statute “allows a city or
county to freeze zoning and other land use regulation
applicable to specified property to guarantee that a developer
will not be affected by changes in the standards for
government approval during the period of development.”
Santa Margarita Area Residents Together v. San Luis
Obispo Cty., 84 Cal. App. 4th 221, 226–27 (Cal. Ct. App.
2000). Under the words of the statute,

       Unless otherwise provided by the
       development agreement, rules, regulations,
       and official policies governing permitted uses
       of the land, governing density, and governing
       design, improvement, and construction
       standards and specifications, applicable to
       the development of the property subject to the
       development agreement, shall be those rules,
       regulations, and official policies in force at
       the time of execution of the agreement. A
       development agreement shall not prevent a
       city . . . from applying new rules, regulations
       and policies which do not conflict with those
       rules, regulations, and policies applicable to
       the property as set forth herein. . . .

Cal. Gov’t Code § 65866(a).

  The Development Agreement that was executed by
OBOT’s predecessor-in-interest froze in place local land use
38              OBOT V. CITY OF OAKLAND

regulations that existed at the time the Development
Agreement was signed. An exception to the regulations
freeze was provided in Section 3.4.2 of the Development
Agreement which specifies that the City:

        [S]hall have the right to apply City
        Regulations adopted by [the] City after the
        Adoption Date [of the Development
        Agreement], if such application (a) is
        otherwise permissible pursuant to Laws
        (other than the Development Agreement
        Legislation), 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.

Development Agreement 3.4.2.

     B. Public Input

    After it became clear in April 2015 that the terminal was
going to be devoted to the storage, handling and loading of
coal, the City announced a public hearing, the first step in a
nearly year-long public process to assess the health and
safety consequences of handling and storing coal at the
terminal. Before the September 21, 2015, public hearing,
OBOT submitted to the City a “Basis of Design” describing
the basic framework for the terminal, and submitted a report
by HDR Engineering claiming that coal dust pollution from
coal-filled rail cars and terminal operations would be
“negligible.” Intervenors submitted expert reports prepared
by Dr. Phyllis Fox and Sustainable Systems Research, LLC.
                OBOT V. CITY OF OAKLAND                     39

The Fox report identified flaws in the HDR report proffered
by OBOT and concluded that the terminal would cause
adverse health and environmental impacts. The Sustainable
Systems Research report estimated potential air emissions
from coal-filled rail cars waiting to be unloaded, finding they
would emit hundreds of tons of coal dust annually.

    Nearly 600 people requested to speak at the hearing.
Many, including prominent health and air pollution experts,
testified that a coal terminal would endanger nearby
residents of West Oakland. Dr. Muntu Davis, Public Health
Director of Alameda County, testified that West Oakland
already “had lots of sources of pollution” and that the
residents there had “poor health outcomes” and existing
“issues with air quality.” Likewise, Dr. Bart Ostro, former
chief of the air pollution epidemiology section for the
California EPA and author of over 100 peer-reviewed
studies on the health effects of air pollution, foresaw
“significant increases in coal dust” and stated that those
increases would “affect the public health of the people of
Oakland.” A local dockworker—formerly a nurse—
explained that she stopped accepting coal trans-loading jobs
at the Port of Stockton because of the negative impacts of
coal dust on her health.

    At the hearing’s conclusion, the City Council voted
unanimously to solicit additional public comments,
requested more evidence from stakeholders, and instructed
City staff to review and summarize the evidence submitted.
City staff subsequently sent follow-up questions to
interested parties and, in October 2015, received responses
from OBOT, labor organizations, environmental groups
including Intervenors, the Alameda County Public Health
Department, the Bay Area Quality Management District, the
U.S. EPA, and the East Bay Regional Park District.
40              OBOT V. CITY OF OAKLAND

    In early 2016, the City negotiated a contract with the
consulting firm Environmental Science Associates (“ESA”)
to analyze the health and safety impacts of storing and
handling coal in West Oakland. The City Council approved
the ESA contract on May 3, 2016. ESA issued its report on
June 23, 2016.

    Contemporaneous with the City Council retaining ESA,
Councilmember Dan Kalb commissioned Dr. Zoë Chafe,
Ph.D., MPH, to analyze and summarize findings on the
potential health impacts and safety risks posed by OBOT’s
proposed terminal. Dr. Chafe issued her report on June 22,
2016.

    The City accepted additional comments in June 2016,
including a detailed report by the Public Health Advisory
Panel, a coalition of prominent Bay Area physicians and
public health experts. Fifteen other physicians, scientists,
and public health professionals endorsed the Panel report.
The Director of the Alameda County Public Health
Department also concurred with the Panel’s conclusions.

     C. Health and Safety Impacts on West Oakland
        Residents

    On June 24, 2016, City staff published a detailed agenda
report that analyzed the public comments received during
months of public review. The report recommended that the
City Council adopt an ordinance to prohibit storage and
handling of coal at bulk material facilities and terminals in
Oakland, and a resolution applying the ordinance to the
Project Site. The agenda report described and attached the
ESA report. It also discussed the Chafe report, the Public
Health Advisory Panel report, and other evidence submitted
to the City—including OBOT’s Basis of Design.
                OBOT V. CITY OF OAKLAND                    41

    All three major reports agreed that terminal activities
would generate fugitive coal dust. The dust would include
significant amounts of the harmful and sometimes deadly air
pollutant PM2.5. Further, the Chafe and Public Health
Advisory Panel reports found that coal dust emissions would
contain toxic components like mercury and arsenic. All
three reports discussed the enhanced risks of fire or
explosion at OBOT’s proposed terminal, given coal’s
potential to spontaneously combust. Finally, the three
reports warned that these health and safety risks were even
more consequential because of the terminal’s proximity to
West      Oakland—where        residents    were    already
disproportionately burdened with high levels of pollution,
elevated cancer risks, poor birth outcomes, frequent
emergency room visits for asthmatic children, and shorter
lifespans. A study cited by the agenda report found that
individuals born in West Oakland have a life expectancy that
is 15 years less than individuals born in the more affluent
neighborhoods within Oakland Hills.

   D. Adoption of Ordinance and Resolution

   On June 27, 2016, after a final public hearing, the City
Council unanimously enacted Ordinance No. 13385
(“Ordinance”), which states that owners and operators of a
“Coal or Coke Bulk Material Facility shall not . . . Store or
Handle any Coal or Coke.” The Council also unanimously
approved Resolution No. 86234 which applied the
Ordinance to OBOT. The City Council found, “based on
substantial evidence in the record,” that failing to apply the
Ordinance to OBOT would result “in a condition
substantially dangerous” to the “health and/or safety” of
nearby community members.
42               OBOT V. CITY OF OAKLAND

     E. OBOT Files Lawsuit

    OBOT filed a lawsuit against the City in federal court for
a claimed breach of contract. It alleged that the City violated
Sections 3.4.1 and 3.4.2 of the Development Agreement
when it applied the new Ordinance to the Project Site.
OBOT alleged that the City breached the Development
Agreement because the City’s determination was not based
on “substantial evidence” that the handling and storage of
coal at bulk material facilities within the City posed a
substantially dangerous threat to the health or safety of
community members.

    The district court denied the parties’ cross-motions for
summary judgment and scheduled a bench trial on the breach
of contract claim to assess whether there was “substantial
evidence” in the record before the City supporting its
determination. The district court conducted a three-day
bench trial beginning on January 16, 2018. At trial, OBOT
was permitted to present lengthy extra-record testimony
from three experts. These experts not only offered critiques
of the City’s methods, evidence, and conclusions, but were
also allowed to address the relevance and significance of
new extra-record exhibits. Before, during, and after trial, the
City objected to the district court admitting and considering
extra-record evidence introduced by OBOT at trial. The City
argued that this evidence would enable OBOT to improperly
contradict the City’s administrative record with information
that the Council had no opportunity to review. The City
raised this issue in its pre-trial brief, its pre-trial objection,
lodged a continuing objection at the outset of trial, and
renewed the objection after trial.

   On May 15, 2018, the district court issued Findings of
Fact and Conclusions of Law. The court invalidated the
Resolution as a breach of the Development Agreement,
                   OBOT V. CITY OF OAKLAND                             43

concluding that “the record before the City Council [did] not
contain enough evidence to support the City Council’s
conclusion that the proposed coal operations would pose a
substantial danger to people in Oakland.” Although the
court acknowledged that the City’s decision “may only be
justified on the basis of evidence that was before the City
Council at the time the decision was made,” it significantly
relied on extra-record evidence produced by OBOT in
rendering its decision. The court’s opinion focused on
OBOT’s critiques of the ESA report and largely did not
address other evidence amassed and reviewed by the City.

II. Analysis

    Section 3.4.2 of the Development Agreement allowed
the City to apply new land use regulations 1 to the Project site
if the “City determines based on substantial evidence and
after a public hearing” that failure to do so would pose a
substantially dangerous threat to the health and safety of
residents. The Development Agreement itself limits the
consideration of what is substantial evidence to what
evidence came before the City before it adopted the
Ordinance.

    Instead of the trial court’s review of the City’s
determination being based on the evidence before the City in
its public proceedings, the trial court allowed OBOT to
present a variety of experts to contradict and otherwise point
out flaws in the evidence that was put before the City. In
addition to holding public hearings, the City considered

    1
      The Ordinance at issue in this case concerns the health and safety
impacts of a particular land use—the storage and handling of coal in bulk
materials facilities within the City. Virtually all the evidence before the
City Council and the court dealt with health and safety issues.
44              OBOT V. CITY OF OAKLAND

evidence submitted by community members and experts on
this issue. There was every opportunity for OBOT to present
its own experts in the proceeding as others had done
throughout the City’s almost year-long review. OBOT
contends that it did not have a time to respond to the ESA
report in particular, but OBOT never sought to do so, nor
requested that it be allotted more time to respond. Instead,
OBOT sued the City for breach of contract in federal court.

    This case is styled as a breach of contract action. Section
3.4.2 of the Development Agreement (the contract in this
case) circumscribes what evidence is to be considered by the
district court in determining whether the City was in breach
of the Agreement. Per its terms, whether the City breached
the Development Agreement depends on whether there was
substantial evidence before the City in its proceedings
regarding the Ordinance and Resolution.

    Circumscribing by contract the evidence to be
considered by the trial court renders this case analytically
similar to an appeal challenging an administrative
determination. There are limited exceptions allowing extra-
record evidence in an administrative appeal. See Fence
Creek Cattle Co. v. U.S. Forest Service, 602 F.3d 1125, 1131
(9th Cir. 2010). Those exceptions do not apply in this case
given the language of the Development Agreement limiting
the district court’s review to that before the City.

    Even if any administrative appeal exceptions to the
consideration of extra-record evidence were to apply, none
would be applicable here. In a mandamus action challenging
air quality regulations, the California Supreme Court upheld
a trial court’s decision limiting evidence to the
administrative record. W. States Petroleum Ass’n v.
Superior Crt., 9 Cal. 4th 559, 579 (Cal. 1995). Much like
OBOT in this case, the plaintiff in Western States Petroleum
                   OBOT V. CITY OF OAKLAND                              45

Association sought to introduce extra-record evidence to
show that the administrative agency had not considered “all
relevant factors” in rendering its decision and to question the
accuracy of the evidence relied upon by the agency. Id.
at 577. The California Supreme Court rejected the plaintiff’s
arguments, stating that they were “nothing more than a thinly
veiled attempt to introduce conflicting expert testimony to
question the wisdom and scientific accuracy of the
[agency’s] decision.” Id. at 578. The California Supreme
Court concluded that “extra-record evidence can never be
admitted merely to contradict the evidence the
administrative agency relied on in making a quasi-legislative
decision or to raise a question regarding the wisdom of that
decision.” Id. at 579.

     In the present case, it was error for the trial court to admit
and consider evidence pertaining to the health and safety
effects of coal handling and storage upon nearby residents
that was not submitted to the City. To allow otherwise
subverts the public proceedings of governmental entities and
makes their hearings a mere warm-up for when the heavy
artillery is brought out in a trial. 2 In the present case, once

    2
      The district court recognized, at least in theory, that even in this
breach of contract action, the “substantial evidence” standard is
“deferential” to the City. In its opinion, the district court stated that it
must confine its review to “whether the record before the City contained
substantial evidence that the proposed coal operations would pose a
substantial danger to health and safety” and may not substitute its own
determination for that of the City’s. Where the district court erred was
when it admitted extra-record evidence to supplement and contradict the
evidence that was before the City in rendering its decision.

     The majority opinion does away with any deference to the City’s
determination. Because this action is styled as a breach of contract
action, the majority concludes that the “district court [ ] owed no
deference to the City’s factual determinations [ ] and did not err in
46                 OBOT V. CITY OF OAKLAND

such evidence was allowed to be introduced, the trial court
became a factfinder on various subjects of conflicting expert
testimony. The Development Agreement did not provide
for, nor does it allow the presentation of such evidence.
Based on the entire record before the City, “a reasonable
mind might accept as adequate,” see Braewood
Convalescent Hosp. v. Workers’ Comp. Appeals Bd., 34 Cal.
3d 159, 164 (Cal. 1983), the City’s conclusion that coal
handling and storage at the terminal would pose a
substantially dangerous threat to the health and safety to
community members. Accordingly, I would reverse the
district court’s judgment and remand.




considering extra-record evidence beyond what was presented at the
public hearings.” Whether an action is styled as a breach of contract
action, a mandamus action, a declaratory action, or an administrative
appeal, the majority’s conclusion allows OBOT (or any other party to a
development agreement) to contest (using evidence that could have been
submitted to the City, but was not) the applicability of a government
regulation that was passed after the City conducted public hearings and
took evidence. Under such precedent, there is little incentive for a party
to a development agreement to participate, other than nominally, in the
public proceedings. It may as well, as OBOT largely did, wait and sue
the City in federal court for a breach of contract and litigate de novo,
evidence of health and safety effects which should have been offered in
the public proceedings.
