The Edgemoor Port expansion, a project backed by hundreds of millions of dollars in funding, faces another legal challenge – this time targeting the Diamond State Port Corporation and its private partner Enstructure.
It comes on top of another lawsuit filed in July by Philadelphia port operators that challenges the validity of the project’s permits, filed against the United States Army Corps of Engineers.
The most recent suit, filed July 27, is brought by five Delaware taxpayers, who take issue with the port’s management over the last eight years. It claims that DSPC did not ask the general assembly for approval or update it with developments required under Delaware law. Darrell Baker filed the suit on behalf of the group. Baker is a lobbyist for the Philadelphia port operator, Holt. Holt does not appear to have a connection to this case.
Complaint arguesdeals withEnstructureinvalid
According to the complaint, when DSPC transferred operation of the Port from Gulftainer to Enstructure in 2023, it didn’t follow code that the organization, “not enter into any agreement to transfer, privatize, or lease all...of the Port of Wilmington to a single entity.”
It’s one of the key points that the complaint says needed the General Assembly's sign off through concurrent resolution. Because it didn’t get this sign-off, it makes the transfer to Enstructure invalid. And it claims that makes any agreements or revisions made since then void too.
For the DSPC to enter contracts and deals under Delaware code, its chair presents “terms of the financial agreement” to the state bond budget committee. After that, the bond committee members present the agreement to their house and senate colleagues. The General Assembly then has 30 days to approve or reject the agreement by concurrent resolution.
Instead of following this process, the claim alleges that DSPC “illegally” avoided those steps with language “hastily” added in the state’s fiscal year 2023 bond bill. The language overrode the DSPC process to enter or revise an agreement. Instead it required approval from the bond committee co-chairs, the Controller General, Senate President Pro Tem, and the Speaker of the House’s assent, rather than the full general assembly.
Other mismanagement from the complaint
The complaint alleges that DSPC failed to collect money owed by the project's previous manager, Gulftainer, which it contracted with in 2018.
The LLC fell behind its rent for the more than 110-acres of property under the concession agreement. A DSPC document said Gulftainer, “did not properly advance the Edgemoor project.”
The July court complaint said in 2021, the state fire marshal notified the state of more than 10 thousand tons of tires dumped on the Edgemoor site. Additionally in 2022, it said DSPC paid $2.9 million for Gulftainer's obligation to the International Longshoreman’s Association health plans, but was never reimbursed.
The complaint argues that DSPC should have informed lawmakers of these issues.
Judge recuses self
The filing attorney askedNew Castle County Superior Court Judge Sean Lugg to recuse himself from the case this week, because of the 25 years he worked in the civil and criminal divisions of the state’s Department of Justice before becoming a judge.
Baker’s letter to Lugg said the because the DOJ did not collect money Gulftainer owed the state for the tire cleanup and default on rent payments, the department could have a connection to the case. It said he should recuse himself, “and not be dragged in as a potential witness,” and avoid possible adverse rulings against his former work place and colleagues.
It added that given the lost funds, some members of the legislature are interested in discovery, depositions, and trial testimony from Delaware Department of Justice employees “and even possibly the Attorney General herself.”
DSPC’s legal representation responded that it was neither “warranted nor appropriate” that Lugg recuse himself.
Lugg did grant the request on July 30. It was reassigned to New Castle County Superior Court Judge Sheldon K. Rennie.
