The long running legal saga over toxics cleanup of a former San Francisco naval base and Superfund site set for private mixed-use redevelopment has gained new complexities in recent weeks as consultant Tetra Tech EC on Nov. 17 sued the U.S. Environmental Protection Agency and U.S. Navy in federal district court, claiming the firm is not liable for expected costs to redo all of its previous site environmental analysis and remediation stemming from controversial test results in some areas. The firm challenges the agencies’ lack of evidence.
The U.S. Justice Dept. estimates those costs related to the former 400-acre Hunters Point site are $100 million and possibly more, said the Tetra Tech suit. An earlier government action against the consultant seeks triple damages and civil penalties, alleging the firm submitted false claims to the Navy for payment under $261 million in contracts for radiological testing and remediation between 2006 and 2012.
Multiple lawsuits have been filed related to Tetra Tech's environmental work to remediate chemical and radioactive toxics at the former naval shipyard, once a site for military atomic weapons testing support that was added to the federal Superfund program in 1989. They include whistleblower actions the U.S. government joined, a suit filed by major site developer Lennar Corp. and a class action by property owners who allege damage caused by contamination.
'Inconsistent and Unsupported'
In its latest challenge, Tetra Tech says the complete redo of analysis and remediation ordered by EPA and agreed to by the Navy, is wrongly based on the word of two former project managers, termed "rogue employees" by the firm, who pleaded guilty in 2017 to falsifying a few soil samples from some site locations.
In its suit, the firm said draft reports by other consultants subsequently hired to investigate "inconsistent and unsupported allegations" by whistleblowers about the firm’s results used unscientific criteria. “The draft reports were made public and have since become the center of a massive, unfounded controversy concerning Hunters Point,” Tetra Tech said.
Bowing to political pressure, EPA “arbitrarily decided that all investigation and remediation” had to be entirely redone, Tetra Tech said in its complaint. “EPA arrived at this conclusion even though the data itself and other reliable evidence did not support it.” EPA coerced the Navy to support the more extensive action “by threatening to withhold its approval to release [other] remediated parcels at Hunters Point for redevelopment,” the suit said.
Tetra Tech asked the court to declare unlawful a new site evaluation and work plan for one parcel prepared by the Navy and approved by EPA. The firm said the two agencies, among other things, violated federal procedures law by relying on unproven allegations and draft documents not included in the administrative record, ignoring reliable contrary evidence and violating applicable laws and regulations.
“EPA's decision was not driven by law or science,” Tetra Tech claimed. The agency “was trying to save face [amid] public allegations of negligent regulatory oversight.”
Tetra Tech has a lawsuit pending against the other environmental firms—which include the CH2M unit of Jacobs and Battelle— claiming they applied “arbitrary ... and inexplicable criteria” to review Tetra Tech’s work and incorrectly told EPA and the Navy that analyses potentially had been manipulated or falsified.
A federal magistrate judge has set Dec. 11 for a pre-settlement conference to identify common facts and legal issues across some pending Hunters Point cases. The judge will issue written orders for the three whistleblower false claims act cases dating from 2013 to 2016 and for a suit against the firm by developer Lennar, according to court documents.
In August, Lennar and affiliates agreed to pay $6.3 million to settle a class action by some homeowners, but Tetra Tech, also a suit defendant, has not agreed to settle. The developer also has a claim against Tetra Tech, which the firm asked the court to dismiss, and also sued the U.S. government earlier this year, seeking over $1 billion in damages for agencies’ alleged negligent supervision of the cleanup. Lennar has intended to build about 10,000 housing units and commercial projects on the former base.
EPA declined to comment to ENR on pending litigation and the Navy did not respond to requests for comment.
Tetra Tech continues as a Navy contractor in other types of services, announcing a $150 million contract on Nov. 17 from the U.S. Naval Facilities Engineering Command for architecture and engineering services. In September the company also received a $68-million EPA contract to provide extensive scientific and technical support services.
Publicly traded Tetra Tech told analysts it anticipates net revenue from U.S. federal clients to grow 5% in fiscal 2021, according to Zacks Equity Research. “The upside is likely to be driven by enhanced analytics used in the water and environmental programs,” said the investment research firm. It said the firm’s diversified business structure, healthy backlog and “sound business” from federal clients would aid performance, but pandemic impact on its international business, especially in the U.K. and Australia, are key bottom line risks ahead.