The opinion
1
2
3
4 UNITED STATES DISTRICT COURT
5 NORTHERN DISTRICT OF CALIFORNIA
6
7 UNITED STATES ex rel. JAHR et al., Case No. 13-cv-03835-JD
8 Plaintiff,
OMNIBUS ORDER RE MOTIONS TO
9 v. DISMISS, STRIKE AND AMEND
10 TETRA TECH EC, INC. et al.,
Defendants.
11
12 UNITED STATES ex rel. SMITH, Case No. 16-cv-01106-JD
13 Plaintiff,
v.
14
15 TETRA TECH EC, INC. et al.,
Defendants.
16
17 UNITED STATES ex rel. WADSWORTH Case No. 16-cv-01107-JD
et al.,
18
Plaintiff,
19
v.
20
TETRA TECH EC, INC. et al.,
21
Defendants.
22
23 The pending motions in these related False Claims Act (FCA) cases are resolved as
24 follows. The parties’ familiarity with the facts and record is assumed.
25
I. MOTIONS TO DISMISS RELATORS’ COMBINED THIRD AMENDED
COMPLAINT
26
27 The Court dismissed the relators’ Combined Second Amended Complaint (CSAC) in its
1 allegations pursuant to the first-to-file bar and public disclosure bar in the False Claims Act
2 (FCA), 31 U.S.C. § 3730. See Dkt. No. 283.1 Relator Anthony Smith and the Wadsworth relators
3 (Donald K. Wadsworth and Robert McLean) were granted leave to amend, and they have filed a
4 Combined Third Amended Complaint (CTAC). Dkt. No. 289.2
5 The Tetra Tech defendants (Tetra Tech) and the Shaw defendants (Shaw) have again
6 moved to dismiss Smith’s and the Wadworth relators’ claims in the CTAC. Dkt. Nos. 297, 296.
7 A. First Cause of Action - “Hunters Point PCB Hot Spot Soil Fraud 2006-2007”3
8 Tetra Tech’s suggestion that the relators’ first cause of action is precluded by the Court’s
9 prior order and the public disclosure bar, Dkt. No. 297-1 at 5, is not well taken. Tetra Tech reads
10 the qui tam complaint “at only the highest level of generality,” which our circuit has disapproved.
11 United States ex rel. Mateski v Raytheon Co., 816 F.3d 565, 578 (9th Cir. 2016) (cleaned up).
12 Tetra Tech points to news articles that disclosed that “soil at Hunters Point did not receive ‘proper
13 testing’ and purportedly did not go through the required ‘screening process.’” Dkt. No. 297-1 at 5.
14 But the relators’ complaint alleges in much greater detail that Tetra Tech, inter alia, “took actions
15 to have the conveyer belt system operate at excessive speeds, and at decreased radiological sensor
16 sensitivity levels,” and “TTEC supervisors had RCTs hand scan soil loads that were far in excess
17 of the thickness density for the radiological sensors contrary to the contract, and hand scanned at
18 speeds and distances that were greater than set forth.” CTAC ¶¶ 30, 36. Tetra Tech’s reference to
19 public disclosures of “general problems” does not support the preclusion under the public
20 disclosure bar of complaint allegations that present much more “specific allegations.” Mateski,
21 816 F.3d at 579.
22 Tetra Tech’s attempt to dismiss the relators’ allegations as precluded under the first-to-file
23 bar also fails. Tetra Tech says that the “Original Jahr complaint alleges ‘the same type of
24
1 Unless otherwise noted, all docket number references are to the ECF docket for Jahr, Case
25
No. 13-cv-03835-JD.
26
2 The Jahr relators are also parties to the CTAC, but they “bring no allegations and bring no claims
against any defendants other than as set forth in the USFAC that were initially alleged in the
27
August 19, 2013 JAHR complaint, Case Number CV-13-3835.” CTAC ¶ 27.
1 wrongdoing’ -- i.e., the improper screening of soil at Hunters Point,” but this is unsupported. Dkt.
2 No. 297-1 at 5-6 (citing ¶ 62 of the original Jahr complaint). Paragraph 62 had to do with the
3 scanning of “equipment leaving Hunters Point Naval Shipyard” including, for example, the failure
4 to scan “rented fencing [that] was used at Hunters Point” before returning it. See Dkt. No. 311-1,
5 Table 1 at 2-3. The relators’ first cause of action, on the other hand, refers to the scanning of soil.
6 Id. at 2-6. The scanning of equipment leaving the job site and soil at the site are not the same
7 thing. The first-to-file bar only stops “repetitive claims” which allege that the “defendant engaged
8 in the same type of wrongdoing.” United States ex rel. Lujan v. Hughes Aircraft Co., 243 F.3d
9 1181, 1187-88 (9th Cir. 2001). Tetra Tech has not shown that that applies here.
10 Tetra Tech’s cursory limitations argument also falls short. Dkt. No. 297-1 at 6. Under 31
11 U.S.C. § 3731(b), the relators’ claims are timely if they are brought within 6 years from the date of
12 the FCA violation, or within “3 years after the date when facts material to the right of action are
13 known or reasonably should have been known by the official of the United States charged with
14 responsibility to act in the circumstances, but in no event more than 10 years after the date on
15 which the violation is committed.” 31 U.S.C. § 3731(b)(1)-(2). As the Supreme Court has
16 clarified, the extended limitations period in § 3731(b)(2) is available in “relator-initiated suit[s]”
17 like this one in which “the Government has declined to intervene.” Cochise Consultancy, Inc. v.
18 United States ex rel. Hunt, 139 S. Ct. 1507, 1511-14 (2019). Tetra Tech’s sole support for the
19 argument that the relators’ claim is untimely even under § 3731(b)(2) is that on May 24, 2012, the
20 relators filed a state court complaint alleging both that there had been “improper practices relating
21 to remediation of radioactive material by Tetra Tech EC, Inc.,” and that these practices had been
22 “report[ed] to investigators of the United States Nuclear Regularly [sic] Commission.” Dkt.
23 No. 297-1 at 6 (quoting “Andrews Complaint ¶¶ 5-10”). On that basis, Tetra Tech asserts that “the
24 government knew or should have known the facts relevant to such violations by May 24, 2012,”
25 and so “[t]he limitations period . . . expired at the latest by May 24, 2015, ten months before
26 Smith’s complaint.” Id. Even assuming that the “Andrews Complaint” allegations can properly
27 be considered in this context, that the Andrews complaint alleged a supposed report to the United
1 § 3731(b)(2) that by the date that complaint was filed, the “facts material to the right of action”
2 were “known or reasonably should have been known by the official of the United States charged
3 with responsibility to act in the circumstances.” The limitations defense consequently is not
4 established “on the face of the [relators’] complaint,” nor by the “matters outside of the pleadings”
5 that Tetra Tech has pointed to. Jablon v. Dean Witter & Co., 614 F.2d 677, 682 (9th Cir. 1980).
6
B. Second Cause of Action - “Hunters Point Soil and Pipe Sample ‘Vicinity
7 Fraud’”
8 The relators’ second cause of action is also not precluded by the first-to-file bar. The
9 allegations in the Original Jahr Complaint that were identified by Tetra Tech, see Dkt. No. 297-1
10 at 6-7, and the allegations in the relators’ CTAC, see Dkt. No. 289 ¶¶ 41-57, allege “related but
11 distinct fraud claims.” United States ex rel. Hartpence v. Kinetic Concepts, Inc., 792 F.3d 1121,
12 1131 (9th Cir. 2015). The Original Jahr Complaint allegations identified by Tetra Tech focused
13 on the “towed array” detector device and the “fraudulent use of the towed array report in the
14 taking of soil samples”; improper soil sampling taken and supervised by Jane Taylor and Marie
15 Winder; destruction of radiation survey records that had results above release levels; and the
16 improper radiological survey of rented fencing that was to be returned. See Dkt. No. 311-1, Table
17 2. The relators’ second cause of action in the CTAC, on the other hand, focuses on “‘vicinity
18 fraud’ soil sampling,” i.e., the taking of soil samples “in the vicinity of the identified elevated
19 radiological areas but not from the actual elevated radiological identified spots”; and the
20 fraudulent scanning and sampling of removed sewer line and stormwater drain line pipes,
21 including by scanning only one portion of the pipe instead of the entire pipe and by performing
22 hand scans too fast and too far from the surface of the pipes. Id.
23 The soil sampling vicinity fraud allegations are, however, barred by the public disclosure
24 bar. Tetra Tech has proffered that an October 13, 2014 NBC Report disclosed that “TtEC
25 employees ‘collected [soil samples] from locations different than the ones specified’ so that less
26 radiation was measured.” Dkt. No. 297-1 at 7. In addition, a Nuclear Regulatory Commission
27 (NRC) investigation report that was disclosed to TtEC on February 11, 2016, discussed that TtEC
1 direction and obtaining a new sample from that location rather than from specified areas that were
2 physically marked and also identified on a map.” Id. at 7-8 (cleaned up). Relator Smith “does not
3 contest” that the NRC report “is a public disclosure that references ‘vicinity fraud’ soil sampling,”
4 and he requests leave to amend his original source allegations. Dkt. No. 304 at 8-9. He fails to
5 discuss the NBC news report at all. Smith has had many opportunities to amend. At this
6 advanced stage of the case, his request for further leave to amend is denied, and his soil sampling
7 vicinity fraud allegations are dismissed with prejudice pursuant to the public disclosure bar.
8 31 U.S.C. § 3730(e)(4)(A).
9 The pipe scanning allegations in the second cause of action will go forward.
10 C. Third Cause of Action - “Hunters Point Building Survey Scanning Fraud”
11 Tetra Tech’s request to dismiss the third cause of action under the first-to-file bar is denied.
12 Dkt. No. 297-1 at 8-9. As Tetra Tech acknowledges, relator Smith’s third cause of action “alleges
13 that Defendant TtEC improperly scanned buildings for radiological contamination by running
14 building scans too quickly and by manipulating the data generated by those scans.” Dkt. No. 327
15 at 6 (citing CTAC ¶ 61). Paragraph 62 of the Original Jahr complaint, on the other hand, had to
16 do with the improper scanning of “equipment leaving Hunters Point Naval Shipyard.” Dkt.
17 No. 311-1, Table 3 at 2. These are “distinct” frauds. Hartpence, 792 F.3d at 1131.
18 Even so, relator Smith’s third cause of action is too close to a claim in which the
19 Government has already intervened. Paragraphs 67 and 68 of the United States’ First Amended
20 Complaint in Intervention Against Tetra Tech EC, Inc., Dkt. No. 82, allege that “Tetra Tech
21 manipulated and falsified the building survey data that it provided to the Navy, rather than
22 providing actual radiation detection results from a full building survey. Tetra Tech falsified data
23 collected from radiological scans of buildings throughout Hunters Point, including but not limited
24 to Buildings 103, 113, 113A, 130, 146, 253, 272, 351, 351A, 365, 366, 401, 411, 439, and 810.”
25 Dkt. No. 82 ¶¶ 67-68. As the Court has stated, the Government will prosecute the action for its
26 intervened claims. Dkt. No. 283 at 5-6 (citing 31 U.S.C. § 3730). For that reason, the relators
27 were directed not to allege claims that duplicate or overlap with the Government’s intervened
1 proceed with the action, the person who initiated the action shall have the right to conduct the
2 action.”). The relators’ CTAC states that its third cause of action is alleging “fake[d] building
3 scans in ways in addition to and different from the fraud schemes” alleged by the Government,
4 Dkt. No. 289 ¶ 61, but that is not a fair characterization of the relators’ or the United States’
5 operative complaints. The third cause of action is dismissed with prejudice on that basis.
6 D. Fourth Cause of Action - “Hunters Point Copper Removal and Sale”
7 Dismissal is denied for the fourth cause of action. Tetra Tech points to the Court’s prior
8 ruling barring “claims that trucks left the site with potentially radioactive material without ever
9 passing through the portal monitor.” Dkt. No. 297-1 at 9-10 (cleaned up). But relator Smith’s
10 fourth cause of action has to do with something entirely different: “copper scavenging” and Tetra
11 Tech’s theft of copper and other valuable metals from Navy buildings. CTAC ¶¶ 65-68.
12 The first-to-file bar argument is denied for the same reason. The thrust of the Original
13 Jahr complaint allegations pointed to by Tetra Tech is that Tetra Tech allegedly failed to “screen
14 all trucks and their loads through the portal monitor,” Dkt. No. 297-1 at 10 (quoting Original Jahr
15 ¶¶ 55, 70), not that it engaged in the theft of copper and other valuable metals.
16 Tetra Tech’s cursory statute of limitations argument, id., is denied for the same reasons
17 discussed for the relators’ first cause of action above.
18 Tetra Tech improperly raised a new argument in its reply that “the purported theft of
19 copper is outside the scope of TtEC’s remediation contracts.” Dkt. No. 327 at 7. As the Court’s
20 Standing Order for Civil Cases indicates, reply papers may not raise new points that could have
21 been addressed in the opening brief. Standing Order ¶ 15. The Court declines to consider the
22 argument.
E. Fifth Cause of Action - “Treasure Island - Copper Removal and Sale While on
23 the Clock”
24 The fifth cause of action was alleged by relator Smith against Shaw. CTAC ¶¶ 73-78.
25 Shaw’s argument for dismissal under the statute of limitations, Dkt. No. 296 at 11-12, is denied.
26 Shaw argues that Smith cannot state a claim “[u]nder the six-year FCA statute of limitations,” id.,
27 but Cochise Consultancy, 139 S. Ct. 1507, held that the limitations period may be tolled under 31
1 And Shaw cites to no valid, controlling authority that supports its assertion that Smith was
2 required to “allege facts to plausibly establish that the Government did not know, or should not
3 have known, facts material to its alleged right of action before March 4, 2013.” Dkt. No. 296 at
4 12.
5 “A district court may dismiss a claim ‘[i]f the running of the statute [of limitations] is
6 apparent on the face of the complaint.’ However, a district court may do so ‘only if the assertions
7 of the complaint, read with the required liberality, would not permit the plaintiff to prove that the
8 statute was tolled.’” Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034, 1045 (9th Cir.
9 2011) (quoting Jablon, 614 F.2d at 682). The assertions of the CTAC do not rule out the
10 possibility that relator Smith will be able to prove that the statute was tolled under 31 U.S.C.
11 § 3731(b)(2), and Shaw has not submitted any materials outside of the pleadings that establish
12 otherwise. See Jablon, 614 F.2d at 682.
13 F. Sixth Cause of Action - “False Reports and Certification for Payment That
Radioactive Samples and Materials Had Been Properly Handled, Retained, or
14 Disposed”
15 Shaw argues that the sixth cause of action should be dismissed because it is based “on the
16 same core allegations that the Court dismissed.” Dkt. No. 296 at 5. This is not a fair
17 characterization of the sixth cause of action. It is true that paragraph 80 of the CTAC repeats the
18 background allegations in paragraph 72 of the CSAC, which the Court found to be precluded by
19 the public disclosure bar. See Dkt. No. 283 at 17. However, a more accurate description of relator
20 Smith’s sixth cause of action is that it expands on paragraphs 78 and 79 of the CSAC, Dkt.
21 No. 148 ¶¶ 78-79, which the Court did not find to be barred. See Dkt. No. 283 at 17 (finding as
22 barred Dkt. No. 148 ¶¶ 72-77, 80).
23 The public disclosures referenced by the Court had to do with “‘repeatedly digging, piling,
24 spreading and transporting dirt from sites contaminated with toxic chemicals,’ which materials
25 Shaw ‘had not tested . . . for radioactivity,’” and directing trucks to “remove radioactive and
26 chemically contaminated soil from one known toxic site, then transport and dump it on a site being
27 ‘cleaned.’” Id. (cleaned up). Smith’s sixth cause of action, on the other hand, focuses on the
1 did not properly segregate and control the radioactive samples but stored the samples in a manner
2 contrary to contract, established Standard Operating Procedures (SOP), and accepted industry
3 standards.”). Shaw’s request for dismissal pursuant to the prior order is denied.
4
G. Seventh Cause of Action - “Treasure Island - Fraudulent Radiological Scans
5 and Soil Samples”
6 For the seventh cause of action, Tetra Tech’s public disclosure bar argument, Dkt.
7 No. 297-1 at 10-11, is denied. The June 9, 2014 news article is too general in what it disclosed,
8 and is not a close enough match with the relator’s allegations in the CTAC. See 31 U.S.C.
9 § 3730(e)(4)(A); see also Mateski, 816 F.3d at 579. Similarly, even assuming that the Former
10 Naval Station Treasure Island Restoration Advisory Board (RAB) Meeting Minutes, Dkt. No. 297-
11 3, Ex. 5, qualify as one of the three specified disclosure channels in the FCA, the portion that
12 Tetra Tech highlighted clearly has to do with “air monitors” and “the air monitoring plan,” and not
13 with radiological scans and soil samples, as are the subject of the relator’s allegations. See Dkt.
14 No. 297-1 at 11 and Dkt. No. 297-3, Ex. 5 at 7, and compare with CTAC ¶¶ 87-90.
15 Shaw’s public disclosure bar argument, Dkt. No. 296 at 5-6, is also denied. The
16 disclosures in the news articles described in the prior order, Dkt. No. 283 at 17, are also not
17 similar enough to relator Smith’s allegations in the seventh cause of action. See 31 U.S.C.
18 § 3730(e)(4)(A); see also Mateski, 816 F.3d at 579.
19
H. Eighth Cause of Action - “Treasure Island Building 233 and Pandemonium
20 Site II Demolition and Disposal Contrary to Contract”
21 Relator Smith’s eighth cause of action against Shaw is dismissed with prejudice under the
22 public disclosure bar, 31 U.S.C. § 3730(e)(4)(A). The Court’s prior order found that news articles
23 from 2012 and 2014, disclosed these facts for Treasure Island: “Shaw Environmental &
24 Infrastructure Inc. received a notice of violation for repeatedly digging, piling, spreading and
25 transporting dirt from sites contaminated with toxic chemicals, which materials Shaw had not
26 tested for radioactivity.” Dkt. No. 283 at 17 (cleaned up). Smith’s eighth cause of action alleges
27 that Shaw “demolished Building 233 prior to the building being fully and properly scanned and
1 debris,” and “virtually all the demolition debris was put into intermodal containers as LLRW.”
2 CTAC ¶¶ 95-96. Shaw is also alleged to have taken “action to demolish and remove the concrete
3 and related structures that comprised the Pandemonium Site II” without properly scanning the
4 materials, and so “the excavated materials . . . were shipped off Treasure Island as non-
5 radiologically impacted wastes.” Id. ¶¶ 97, 99.
6 Relator Smith’s allegations are “substantially similar to those in the prior public
7 disclosures,” and the public disclosures are “close enough in kind and degree to have put the
8 government on notice to investigate the alleged fraud.” United States ex rel. Solis v. Millennium
9 Pharmaceuticals, Inc., 885 F.3d 623, 627 (9th Cir. 2018). Smith has made no allegations that he
10 is an original source under 31 U.S.C. § 3730(e)(4) for this cause of action. See CTAC ¶¶ 93-100.
11
I. Ninth Cause of Action - “Treasure Island - Soil Movement from Site 12 to
12 Site 6 Violated the Navy Contract”
13 Smith’s ninth cause of action has to do with “work at Site 12 including excavation of soil,
14 transportation of soil on Treasure Island, and the disposition of the excavated material from that
15 site.” CTAC ¶¶ 102-103. This cause of action, too, is precluded by the public disclosure bar. The
16 2012-2014 news articles disclosed that (1) Shaw was improperly “digging, piling, spreading and
17 transporting dirt from sites contaminated with toxic chemicals,” which materials Shaw had not
18 tested for radioactivity, and (2) Chicago Bridge and Iron “directed a truck to remove radioactive
19 and chemically contaminated soil from one known toxic site, then transport and dump it on a site
20 being ‘cleaned,’” all at Treasure Island. Dkt. No. 283 at 17 (cleaned up). These disclosures would
21 have “put the government on notice to investigate” the fraud alleged in Smith’s ninth cause of
22 action. Solis, 885 F.3d at 627. Smith has not made any allegations about being an original source,
23 see 31 U.S.C. § 3730(e)(4). The ninth cause of action is dismissed with prejudice.
24
J. Tenth and Eleventh Causes of Action - “Treasure Island - Softball Area Site
25 Improperly Excavated in Violation of Navy Contract” & “Treasure Island -
Excavation and Removal of Treasure Island Soil in Violation of Navy Contract
26 Requirements”
27 For the tenth and eleventh causes of action, relator Smith “acknowledges . . . that news
1 radioactivity.” Dkt. No. 306 at 11. Nevertheless, Smith claims that “[t]he public disclosure bar
2 does not preclude these causes of action because Smith is an ‘original source’ under the FCA.” Id.
3 Smith specifies that he should be deemed an original source under 31 U.S.C.
4 § 3730(e)(4)(B)(2). This portion of the FCA defines as an original source an individual “who has
5 knowledge that is independent of and materially adds to the publicly disclosed allegations or
6 transactions, and who has voluntarily provided the information to the Government before filing an
7 action under this section.” 31 U.S.C. § 3730(e)(4)(B)(2). Smith’s complaint allegations on this
8 score are more robust than Shaw gives him credit for, see CTAC ¶¶ 106, 115. Not nearly as
9 robust are Smith’s allegations that he provided this information to the Government before he filed
10 his FCA action. He vaguely states that he provided “information” to the Government in a
11 November 10, 2015 in-person meeting, and then goes on to definitively allege that he provided
12 “written information via email” on February 22, 2016. Id. The descriptions of the information
13 provided by email are cursory. Even so, Shaw’s original source allegations are overall sufficient
14 for these claims to go forward at this stage. Dismissal is denied.
15
K. Twelfth Cause of Action - “Treasure Island - False Shipment of LLRW Using
16 Manifests for Non-Rad Material”
17 Dismissal of the twelfth cause of action is similarly denied. The twelfth cause of action
18 takes aim at Shaw’s excavation of soil that was not properly scanned or tested for radiological
19 contamination; and the removal of soil from Radiologically Controlled Areas and shipment of the
20 soil in trucks from Treasure Island without proper scanning, sampling, or lab testing. CTAC
21 ¶¶ 118, 122. These allegations are substantially similar to the information that was publicly
22 disclosed in news articles, Dkt. No. 283 at 17. Even so, at this stage, Smith has adequately alleged
23 that he is an original source under 31 U.S.C. § 3730(e)(4)(B)(2). See CTAC ¶ 124.
24 L. Thirteenth Cause of Action - “Treasure Island - Fraud in Development and
Approval of the TI July 1, 2014 Final Historical Radiological Assessment
25 Supplement Technical Memorandum”
26 Tetra Tech’s request to dismiss the thirteenth cause of action under the public disclosure
27 bar, Dkt. No. 297-1 at 11-13, is denied. Tetra Tech fails to explain how YouTube postings of
1 appear that it does not. In addition, Tetra Tech’s own description of the 2014 local news media
2 article shows that it is not a public disclosure under the FCA for purposes of Smith’s thirteenth
3 cause of action. Tetra Tech says that the article “summariz[ed]” Tetra Tech’s presentation,
4 “discussing CDPH’s input, and linking to the YouTube videos.” Dkt. No. 297-1 at 12-13. It also
5 says that the article “clearly put the government on notice to investigate any allegations that TTI
6 had purportedly failed to provide the required notice period for the Memorandum.” Id. at 13.
7 Missing from Tetra Tech’s explanation, and from the article itself, Dkt. No. 297-3, Ex. 6, is any
8 “direct claim of fraud” or a disclosure of “facts from which fraud can be inferred.” Mateski, 816
9 F.3d at 570-71.
10 M. Fourteenth Cause of Action - “Conspiracies Under 31 U.S.C. § 3729(a)(1)(C)
to Commit Violations of 31 U.S.C. § 3729(a)(1)(A) and (B), and for Violations
11 of § 3729(a)(1)(A) and (B) Pursuant to Conspiracy”
12 The fourteenth cause of action is alleged by the Wadsworth relators against Tetra Tech.
13 CTAC ¶¶ 131-47. These allegations by the Wadworth relators are barred: (1) that individuals
14 were hired without due diligence, CTAC ¶¶ 133, 134; and (2) that TTEC and its subcontractors
15 intentionally avoided taking soil samples from the highest radioactive areas, and instead took them
16 from “lower radioactive areas,” id. ¶¶ 137, 140. These claims are repetitive of the Original Jahr
17 complaint, which already alleged that the “defendant engaged in the same type of wrongdoing.”
18 Lujan, 243 F.3d at 1187-88. They are dismissed with prejudice.
19 Other allegations called out by Tetra Tech in its motion to dismiss are not actually
20 allegations of fraud. See Dkt. No. 297-1 at 13-14 (taking aim at relators’ allegations that TtEC’s
21 Navy contract “required a ‘towed array’”; improperly taken “samples generated ‘false laboratory
22 results’”; results came from Hunters Point laboratory; Tetra Tech’s likely motivation for its
23 conduct). The first-to-file bar “stops repetitive claims” which allege that the “defendant engaged
24 in the same type of wrongdoing.” Lujan, 243 F.3d at 1187-88. These allegations are not subject
25 to that bar because they do not assert wrongdoing.
26 Tetra Tech has not otherwise offered any reason to dismiss the remainder of the
27 Wadsworth relators’ conspiracy allegations. See Dkt. No. 297-1 at 13-14. They will go forward.
1 N. Shaw Defendants’ Dismissal Arguments
2 Shaw also made some overarching dismissal arguments that are not specific to any
3 particular cause of action. Those arguments do not support the dismissal of any of relator Smith’s
4 surviving claims against Shaw. Shaw’s cursory first-to-file bar argument is much too general. See
5 Dkt. No. 296 at 9-10. Shaw has failed to establish that the original Jahr complaint, and Smith’s
6 claims against Shaw, allege the same material elements of fraud. See Lujan, 243 F.3d at 1187-88.
7 Shaw’s arguments about the government action bar and the effect of the Government’s
8 intervention in this case, Dkt. No. 296 at 10-11, have already been denied by the Court. See Dkt.
9 No. 283 at 4-8. And Shaw’s arguments for dismissal under Federal Rules of Civil Procedure 8
10 and 9, Dkt. No. 296 at 12-15, are also denied. The relators’ allegations are adequate under those
11 rules.
12
II. UNITED STATES’ MOTION TO STRIKE TETRA TECH EC, INC.’S
13 AFFIRMATIVE DEFENSES
14 In the United States’ intervened action, Tetra Tech EC, Inc. has filed an answer to the
15 United States’ first amended complaint, including an assertion of twenty-nine affirmative
16 defenses. Dkt. No. 315. The United States has moved to strike Tetra Tech’s defense nos. 1, 3-13,
17 15-21, and 24-28 under Federal Rule of Civil Procedure 12(f), on the ground that those defenses
18 “fail to satisfy the pleading requirements and are legally unsound and insufficient.” Dkt. No. 324
19 at 1. Rule 12(f) provides that the Court may “strike from a pleading an insufficient defense or any
20 redundant, immaterial, impertinent, or scandalous matter.”
21 The United States’ motion to strike defense nos. 3-4, 13, 16, 19, 21, and 27-28 because
22 they “impose unnecessary and substantial discovery and litigation burdens,” Dkt. No. 324 at 3, is
23 denied. The United States’ desire to “limit unnecessary discovery burdens,” id., is not a valid
24 basis for striking Tetra Tech’s affirmative defenses.
25 The following are not appropriate affirmative defenses and are stricken: nos. 1 (Failure to
26 State a Claim); 5 (No Falsity); 6 (No Scienter); 7 (No Corporate Liability); 8 (No Materiality); 17
27 (No Causation); and 18 (Failure to Plead with Particularity).
1 The United States’ request to strike Tetra Tech’s affirmative defenses “grounded in equity”
2 (nos. 3, 13, 16, 19, 27-28), Dkt. No. 324 at 4-7, is denied. The United States’ own arguments
3 show that these affirmative defenses are not precluded per se. The denial is without prejudice to
4 renewal of the dismissal request at a later stage of the case, as warranted.
5 The United States’ additional arguments, Dkt. No. 324 at 8-11, are denied. The request to
6 strike defense no. 13 (waiver) relies on the United States’ factual representation that “the DOJ
7 diligently investigated the relators’ allegations and intervened.” Id. at 8. That is not a proper basis
8 for a Rule 12 motion.
9 Dismissal of defense no. 28 (comparative fault) is denied. The United States presents no
10 controlling authority for its argument that “government negligence provides no defense to the
11 FCA.” Id. at 9.
12 The United States’ argument that nos. 4, 9, and 10 “have no bearing” on their claims, id. at
13 9, fails to establish that the defenses are “insufficient” or “redundant, immaterial, impertinent, or
14 scandalous” such that they should be stricken under Rule 12(f).
15 For the United States’ assertion that defense nos. 11-13, 15, 19-21, 24-25, and 28 should
16 be stricken because they “lack any factual predicate or legal explanation,” id. at 10-11, the
17 defenses are understandable on their face and the United States can inquire about them in
18 discovery.
19
III. UNITED STATES’ MOTION FOR LEAVE TO FILE A SECOND AMENDED
20 COMPLAINT
21 The United States requests leave to file a second amended complaint that “includes factual
22 updates and two additional claims, CERCLA and common law fraud, based on information
23 learned from discovery, including analysis by a scientific consulting firm.” Dkt. No. 342 at 1.
24 The proposed amendments are sufficiently related to the United States’ existing allegations. See
25 id. at 4-6.
26 The amendment request is granted under Rule 15(a)(2), which provides that the Court
27 “should freely give leave when justice so requires.” The United States is directed to file its second
1 Tetra Tech acknowledges that for the scheduling order in this case, “[t]he parties
2 || inadvertently omitted a deadline for amending pleadings.” Dkt. No. 345 at 4n.1. The Court
3 makes clear that the time to join other parties or to amend the pleadings is now closed. See Fed.
4 | R. Civ. P. 16(b)3).
5 The parties are in agreement that some additional discovery will likely be necessary in
6 light of the United States’ amendment. See Dkt. Nos. 345, 348. The parties are directed to meet
7 and confer. If a change to the case schedule is needed, the parties should make every effort to
8 || request any changes jointly.
9 IT IS SO ORDERED.
10 Dated: March 5, 2024
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12
JAMES JONATO
13 United fftates District Judge
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