United States of America v. Tetra Tech EC, Inc.

Background

Tetra Tech EC, Inc. and Tetra Tech, Inc. were defendants in several lawsuits concerning work under a federal contract to remediate environmental contamination at the Hunters Point Naval Shipyard in San Francisco. Some cases were whistleblower actions under the False Claims Act, a federal law allowing certain claims that a person or company defrauded the government. Other cases were brought by property owners alleging damage from contamination near their homes.

Several property-owner cases had begun in California state court. Tetra Tech removed them to federal court, arguing in part that the shipyard was a federal enclave. The court sustained removal and denied the plaintiffs’ request to send the cases back to state court.

Recusal request

Tetra Tech argued that the remand order showed the court had prejudged whether Tetra Tech fraudulently billed the government for work it had not performed. Tetra Tech relied on a sentence stating that the Navy had paid substantial sums for work “they did not do, as plaintiffs allege.” It also relied on comments from a May 2018 sentencing hearing involving former Tetra Tech employee Justin E. Hubbard, who had pleaded guilty to falsifying records connected to the remediation work. Tetra Tech sought recusal under 28 U.S.C. § 455(a), which requires a judge to step aside when the judge’s impartiality might reasonably be questioned.

Court’s analysis

The court applied an objective standard: whether a reasonable, well-informed, thoughtful person knowing all the facts would reasonably question the judge’s impartiality. It also noted that a judge has a strong duty to continue serving when there is no legitimate reason for recusal.

The court concluded that the sentence in the remand order simply summarized the plaintiffs’ allegations. The words “as plaintiffs allege,” the court said, made clear that the sentence was not a finding that Tetra Tech had committed fraud or was liable under the False Claims Act.

The court likewise found that the sentencing-hearing comments did not show bias against Tetra Tech. Hubbard had admitted switching clean dirt with dirt from specified areas of the shipyard in violation of Navy testing protocols. The court questioned Hubbard about the circumstances of his conduct and his role because those facts were relevant to determining his punishment. The court expressly stated that it was not making factual findings, and said the discussion was not directed at the civil claims against Tetra Tech or at Tetra Tech’s potential liability. The court also said it had not required Tetra Tech to pay retesting expenses because of any wrongdoing by the company.

The court added that Tetra Tech had made a reasonable argument that its request based on the sentencing hearing was untimely. The hearing occurred in May 2018, and the transcript had been publicly available since April 30, 2019, but Tetra Tech did not explain its delay in seeking recusal.

Disposition

The court concluded that recusal was unwarranted and inappropriate. It stated that Tetra Tech had not shown a legitimate reason for recusal, that the court therefore had a duty to continue serving, and that the merits of the plaintiffs’ claims remained open and disputed. The court ordered that a jury-trial date would be set at a later case-management conference.