OAKLAND, Calif. (CN) – Wildfire victims claiming two engineering firms lied to the government about cleanup efforts may not see their class action move forward, after a federal judge said Thursday their racketeering claims do not pass muster.
Sonoma County property owners Craig Mason, Patricia Healey and Gary Goodrich sued Tetra Tech and AshBritt Environmental this past February, claiming the firms falsely reported to the Army Corps of Engineers that they had removed far more contaminated soil than they actually did while cleaning up the aftermath of the 2017 North Bay Wildfires and in turn received more money.
While leaving contaminated soil and debris untouched, the owners claim the firms ended up excessively excavating properties without conducting proper testing, destroying sidewalks, driveways and septic tanks in the process.
The claim’s success hinges on whether the plaintiffs were directly affected by the firms’ predicate act of sending daily mail and emailed correspondence with the government regarding the cleanup work.
U.S. Magistrate Judge Donna Ryu said she could not find anything linking the allegedly falsified reports with the harm to the property owners.
Representing the proposed class, attorney Shounak Dharap said racketeering covers “a very broad net,” and that the causation flows directly from the firms’ scheme to defraud the government. Civil racketeering almost solely involves mail and wire fraud.
“Without the mailings the scheme would never have come to fruition,” Dharap said. “They wouldn’t have been permitted to continue the conduct that resulted in the harm to the plaintiffs.”
Ryu asked, “What if they didn’t have to give reports at all? Your clients would still be hurt. If we took that piece away, I’m not sure how the harm fits into the reporting to the government.”
Dharap said it is a question of intent, which left Ryu wondering where she should draw the line.
Tetra Tech’s attorney James Vorhis told Ryu that he didn’t think the owners “are going to be able to get around this problem,” adding, “If this case can get through with this set of circumstances it’s going to mean almost anyone can allege a RICO violation and that’s not the purpose of the statute.”
AshBritt’s attorney Gayle Athanacio agreed. “There’s a disconnect between the supposed scheme and the alleged harm,” she’s said.
Ryu said she may not have jurisdiction without a viable racketeering claim, as it’s the only federal claim being alleged.
“I’m not sure if there’s any other basis for jurisdiction,” she said.