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 Plaintiffs,

ORDER RE UNITED STATES’

9 v. SETTLEMENT AND RELATORS’

SHARES UNDER FALSE CLAIMS ACT

10 TETRA TECH EC, INC. et al.,

Defendants. 11 12 UNITED STATES ex rel. SMITH, Case No. 16-cv-01106-JD Plaintiff, 13 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 Plaintiffs, 19 v. 20 TETRA TECH EC, INC. et al., 21 Defendants. 22 23 The United States and Tetra Tech EC, Inc. have advised the Court of an agreement to settle 24 the first through fourth causes of action in the United States’ Second Amended Complaint in 25 Intervention. Dkt. No. 452, Ex. 1.1 The claims subject to the settlement are: (1) False Claims 26 Act: Presentation of False Claims (31 U.S.C. § 3729(a)(1)(A)); (2) False Claims Act: False 27 1 Statement Material to a False Claim (31 U.S.C. § 3729(a)(1)(B)); (3) Common Law Fraud; and 2 (4) Breach of Contract. Dkt. No. 372 ¶¶ 143-60. Tetra Tech EC has agreed to pay to the United 3 States $57,000,000, plus interest, to settle these claims. Dkt. No. 452, Ex. 1 at 3 ¶ 1. An 4 attachment to the agreement captioned, “United States’ Allocation of the Settlement Amount,” 5 states that $51,870,000 of the settlement amount is allocated to the “Soil Fraud Allegations,” and 6 $5,130,000 is allocated to the “Building Scan Fraud Allegations.” Id., Attachment A. 7 The United States has requested that the Court approve this settlement as “fair, adequate, 8 and reasonable under all the circumstances” under 31 U.S.C. § 3730(c)(2)(B). This order 9 addresses that request, as well as issues raised by the qui tam relators about the share of the 10 settlement that they should be awarded under 31 U.S.C. § 3730(d). 11

I. WHETHER RELATORS ARE ENTITLED TO A SHARE OF THE SEPARATE

12 CERCLA SETTLEMENT 13 The United States’ fifth cause of action in its Second Amended Complaint in Intervention 14 was a claim under CERCLA, 42 U.S.C. § 9607(a), for the recovery of response costs. Dkt. 15 No. 372 ¶¶ 161-78. The United States and Tetra Tech EC settled this claim separately and 16 submitted a proposed consent decree, which the Court has entered. See Dkt. Nos. 453, 503. 17 The consent decree includes a provision under which Tetra Tech EC agrees and is ordered 18 to pay to the U.S. Department of the Navy the sum of $40,000,000. Dkt. No. 503 at 5 ¶ 5. The 19 relators say that they “have a right to share in the CERCLA settlement” in addition to the separate 20 FCA settlement amount. Dkt. No. 487 at 5. 21 Not so. “The plain text of the False Claims Act confines qui tam plaintiffs to recoveries 22 only for claims seeking relief based on the type of fraud or falsehoods covered by that statute.” 23 Unites States ex rel. Kennedy v. Novo A/S, 5 F.4th 47, 49 (D.C. Cir. 2021). Because the CERCLA 24 claim is not a “type of claim cognizable under the False Claims Act” and does not have the 25 element that Tetra Tech EC engaged in “a false or fraudulent effort to obtain money or property 26 from the United States,” id., the relators do not have an entitlement to receive a share of the $40 27 million paid by Tetra Tech EC as part of the CERCLA consent decree.

II. APPROVAL OF THE FCA SETTLEMENT AS FAIR, ADEQUATE, AND

1 REASONABLE UNDER ALL THE CIRCUMSTANCES 2 The False Claims Act provides for the Court to approve the proposed FCA settlement as 3 “fair, adequate, and reasonable under all the circumstances.” 31 U.S.C. § 3730(c)(2)(B); see also 4 United States ex rel. Sharma v. Univ. of S. Cal., 217 F.3d 1141, 1143 (9th Cir. 2000) (“The FCA 5 provides that the district court must approve a proposed settlement in a qui tam case (in which a 6 party sues on behalf of the government)”). The United States asks the Court to so approve. Dkt. 7 Nos. 472, 476. 8 The request is declined on the record as it currently stands. It is true that, in a qui tam case, 9 the United States is “agreeing to compromise with respect to its own injuries only, not those of the 10 relator or other absent parties.” United States v. Everglades College, Inc., 855 F.3d 1279, 1288 11 (11th Cir. 2017), abrogated on other grounds by United States ex rel. Polansky v. Executive 12 Health Resources, Inc., 599 U.S. 419 (2023). As a consequence, the usual settlement approval 13 factors under Federal Rule of Civil Procedure 23 are of limited guidance in this context, and the 14 Court “must afford some degree of respect” to the government’s decision to settle. Id. at 1288-89. 15 Even so, “given the FCA’s mandate that [courts] review settlements for fairness, [courts] 16 cannot just rubber stamp the government’s justifications.” Id. at 1288-89. That in effect is what 17 the government asks for here. It did not explain in a meaningful way the rationale for entering 18 into this particular settlement, and presented only a quarter of a page of bromides that would apply 19 to any decision to settle a case. See Dkt. No. 472 at 5 (“The FCA Settlement is rationally related 20 to accomplishing several valid governmental purposes. These include the certainty of substantial 21 financial recovery ($57 million) weighed against the uncertainty of summary judgment, trial, and 22 appeals; the desire to avoid expending additional governmental resources; and the significant 23 deterrent message of a settlement of this magnitude to other contractors.”). This shortcoming is all 24 the more striking because it is not at all obvious that the settlement is fair and reasonable in light 25 of radiation remediation concerns and other serious circumstances present in this case. The 26 government will be given an opportunity to say more in a supplemental submission as detailed 27 below. 1 The government has also urged the Court to approve the FCA settlement before the issue 2 of the relators’ shares has been settled. See Dkt. No. 487 at 10 (“Determining the relator’s share is 3 not a precondition for finalizing the FCA Settlement. Because the relators do not contest its 4 fairness, the United States respectfully requests that the Court issue an order overruling objections 5 to the FCA Settlement and allowing performance of the Settlement Agreement.”). But the 6 government did not acknowledge, let alone substantively address, the question of what should 7 happen to the contested portion of the relators’ shares in the meantime. See James B. Helmer, Jr., 8 False Claims Act: Whistleblower Litigation Ch. 16.X. (7th ed. 2017) (“When a Dispute Arises 9 Over the Relator’s Share, What Happens to the Contested Portion of the Relator’s Share?”). This 10 issue should be tackled in the supplemental submission. 11 III. RELATORS’ SHARES OF THE SETTLEMENT PROCEEDS 12 The relators at issue are: Arthur R. Jahr, III, Elbert G. Bowers, Susan V. Andrews, and 13 Archie R. Jackson (Jahr relators); relator Anthony Smith; and relators Donald K. Wadsworth and 14 Robert McLean (Wadsworth relators). 15 The relators ask for a 23% share of the settlement proceeds “as a group, and any case 16 specific allocation deferred.” Dkt. No. 487 at 1. The United States suggests that the Jahr relators 17 should be awarded (as a group) 20% of the $51,870,000 allocated to the “soil sampling fraud,” and 18 that Smith, Wadsworth, and McLean are precluded from any award from this amount by “the first- 19 to-file rule.” Id. at 8. For the $5,1300,000 amount that the United States has allocated to 20 “building scan fraud,” the United States says that only relator Smith should receive a 20% award, 21 because none of the other relators alleged any facts related to building scan fraud at HPNS. Id. at 22 9-10. 23 The suggestions from both sides were hopelessly vague and deficient. Among the many 24 issues the parties failed to address are: 25 1) The analysis of the relators’ shares must be conducted on a claim-by-claim basis. See United States ex rel. Merena v. SmithKline Beecham Corporation, 205 F.3d 97, 106 (2d Cir. 2000). 26 The United States’ allocation of its settlement proceeds to “soil fraud allegations” and “building scan fraud allegations” is likely too general to be helpful here. See Dkt. No. 452, 27 Ex. 1, Attachment A. How should the settlement proceeds be allocated on a more detailed qui tam complaint? What is the evidentiary support for any proposed allocation? See Merena, 1 205 F.3d at 107. 2 || 2) To the extent the United States argues that any of the relators are barred from recovering an award by the first-to-file rule or any other FCA statutory bar, this too must be done on a claim- 3 by-claim basis and not in broad strokes, as the United States has done in its current filing. See 4 Dkt. No. 487 at 8-10. 3) Arguments about the extent to which any relators have “substantially contributed to the 5 prosecution of the action” (or failed to do so) under 31 U.S.C. § 3730(d)(1) must be made in a succinct manner with specific evidentiary support. The parties have failed to do so. The 6 relators’ 98-page “Statement of Relators’ Contribution to Prosecution of Action,” Dkt. 7 No. 490, is stricken, and the associated sealing motion is terminated, Dkt. No. A897 4) For any proposals that an award be made to any relators as a group, the proposing party must 8 address “whether the Court may properly award any recovery jointly to the pertinent relators, 9 or whether it must specify each relator’s award.” Merena, 205 F.3d at 108 n.11.

10 IV. NEXTSTEPS 11 The parties are directed to file by December 5, 2025, supplemental briefs directed to FCA «= 12 || settlement approval and the relators’ shares. While the parties are not limited to the issues raised

13 in this order, a failure to address an issue expressly highlighted by this order will be deemed a

14 || waiver. Each side may have up to 30 pages for their supplemental briefs, and the Court expects 15 the filings will be supported by declarations and other evidentiary submissions. If the relators © 16 || wish to make separate submissions, they may request the Court’s permission to do so but will need

= 17 to explain why a separate submission is necessary and appropriate. The relators may also request

18 || to file one combined brief for their common issues, with separate “add-on” briefs for any 19 || individual issues. 20 After receiving the submissions on December 5, 2025, the Court will call for responses or 21 set an evidentiary hearing, as warranted. 22 IT IS SO ORDERED. 23 Dated: November 7, 2025 24 25

JAME NATO

26 Unitedfftates District Judge 27 28 || 2 The relators’ proposed order, Dkt. No. 491, is also stricken.