Developer Sues Tetra Tech and Feds Over Hunters Point Project

(CN) – Land developer Five Point Holdings hit Tetra Tech and the U.S. government with separate lawsuits for special damages Thursday for their roles in the Hunters Point Naval shipyard scandal.

The former Hunters Point shipyard near San Francisco in October 2018. (Nicholas Iovino / CNS)

The Tetra Tech scandal over allegations that the company falsified soil tests in an environmental cleanup project at the former shipyard has been ongoing for over two years.

Five Point Holdings, a developer on the project, brought both lawsuits Thursday in the Northern District of California. The company has been named in several complaints alongside Tetra Tech, which was responsible for cleaning the site.

The first focuses on the alleged activities of Tetra Tech itself and the other directs allegations against the federal government that it was its negligence that allowed the fraud to happen in the first place.

In the lawsuit brought against Tetra Tech, Five Point Holdings and CP Development Co. claim that Tetra Tech fraudulently falsified widespread information in connection to the company’s involvement in cleaning up a former Navy shipyard in San Francisco.

The company was contracted to provide detailed and legitimate environmental surveys of the ongoing reconstruction project and ultimately be able to green-light the decontaminated status of a 400-acre site where around 10,000 homes were set to be constructed. The company was reportedly paid over $250 million for their work on the project.

A representative for Tetra Tech argued that in fact the work done covered only a portion of the shipyard and that portion does not include the area developed by Five Point Holdings. In addition, the company did not have the authority to give the project the go-ahead, with that authority resting with government regulators.

In their lawsuit, Five Point Holdings claims that Tetra Tech instead opted to falsify much of the critical information they were contracted to provide, most notably by destroying legitimate soil samples taken from the site and replacing them with samples that were known to contain only clean and uncontaminated soil.

The suit claims that because Five Point Holdings acquired an interest in the redevelopment of the Hunters Point project prior to learning about the alleged fraud by Tetra Tech, the company’s name has been repeatedly invoked in several lawsuits stemming from the dispute – despite Five Point Holdings having nothing to do with the actual environmental restoration of the project.

“As a result of this fraudulent conduct at the Shipyard, Plaintiff Five Point and its Chief Executive Officer (Emile Haddad) have been named as defendants in numerous lawsuits against Tetra Tech, even though they had absolutely nothing to do with remediation at the site and did not know the extent of the fraudulent activities of Tetra Tech (or the impact of such activities on the Shipyard transfer schedule) until those activities became public in May 2018,” the complaint states.

In response, Andrew Stroud with the Hanson Bridgett law firm wrote, “Tetra Tech EC was retained to provide remediation services for a portion of the entire Hunters Point remediation project, under the direct supervision of the U.S. Navy. Indeed, the area in which Tera Tech EC performed remediation services does not even include the area that has been developed by Five Point Holdings.”

In suggesting that the government was ultimately responsible for contamination and clean-up at the shipyards, both sides shared some common ground.

The plaintiff land developer says that the United States shares a portion of the blame in this scandal as well. In the suit brought against the federal government, the company alleges that the government had an obligation to properly oversee and supervise Tetra Tech as the restoration project was carried out, and yet failed to recognize and halt the alleged activity.

The developer’s suit notes that while the federal government did go on to prosecute former Tetra Tech employees for their roles in the scandal, as well as continuing to pursue False Claims Act violations against Tetra Tech on behalf of the Navy, such actions are not enough to make up for its negligence.

“This is too little too late by the United States; the United States failed to properly supervise Tetra Tech for years pursuant to its contractual, statutory and other legal obligations to do so,” the complaint states.

Five Point Holdings says that as a result of both parties’ conduct, the company has been unable to secure a transfer of the shipyard property and the government has not provided them with any timeline as to when the transfer will take place.

Five Point Holdings is requesting compensatory and special damages from both Tetra Tech and the United States, and specifically requests that Tetra Tech be required to pay punitive and exemplary damages as punishment for their alleged conduct.

Neither party immediately responded to request for comment by press time Thursday evening.

Nine other entities filed similar claims against Tetra Tech and the federal government Thursday, also in San Francisco federal court.

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