Bayview Hunters Point Residents, et al. v. Tetra Tech EC, Inc., et al.

Opinion

1 2 3 6 7 BAYVIEW HUNTERS POINT Case No. 19-cv-01417-JD RESIDENTS, et al., 8 Plaintiffs, ORDER RE GOOD FAITH 9 SETTLEMENT DETERMINATION v. 10 TETRA TECH EC, INC., et al., 11 Defendants.

12 13 Defendants Tetra Tech EC, Inc. and Tetra Tech, Inc. (together, “Tetra Tech”) have agreed 14 to settle plaintiffs’ claims against them for a $1.5 million payment, and they ask that the Court 15 determine this settlement to have been made in good faith pursuant to California Code of Civil 16 Procedure Sections 877 and 877.6. Dkt. No. 371. The parties’ familiarity with the record is 17 assumed, and the request is granted. 18 The determination of a good faith settlement is guided by several factors, such as: 19 [A] rough approximation of plaintiffs’ total recovery and the settlor’s proportionate liability, the amount paid in settlement, the 20 allocation of settlement proceeds among plaintiffs, and a recognition that a settlor should pay less in settlement than he would if he were 21 found liable after a trial. Other relevant considerations include the financial conditions and insurance policy limits of settling 22 defendants, as well as the existence of collusion, fraud, or tortious conduct aimed to injure the interests of nonsettling defendants. 23 Finally, practical considerations obviously require that the evaluation be made on the basis of information available at the time 24 of settlement. “A defendant’s settlement figure must not be grossly disproportionate to what a reasonable person, at the time of the 25 settlement, would estimate the settling defendant’s liability to be.” 26 Tech-Bilt, Inc. v. Woodward-Clyde & Assocs., 38 Cal. 3d 488, 499 (1985) (cleaned up). 27 The Developer Defendants contest good faith, but they did not demonstrate that the 1 equitable objectives of the statute.” Id. at 499-500.1 To start, as the Developer Defendants 2 forthrightly acknowledge, there are no indications of collusion in reaching the settlement. Dkt. 3 No. 374 at 14. This absence is to be expected because the settlement emerged from multiple 4 conferences actively managed by a magistrate judge. The involvement of a judicial officer in 5 combination with representation of the parties by knowledgeable counsel, as was the case here, 6 provides considerable assurance with respect to “whether a settlement is within the reasonable 7 range permitted by the criterion of good faith.” Tech-Bilt, 38 Cal. 3d at 500. 8 Another significant indicator of good faith was plaintiffs’ counsel’s candid representation 9 at the hearing that he could “never” prove causation against Tetra Tech, and that most and 10 possibly all of the claims against Tetra Tech would not have survived summary judgment or a jury 11 trial. The Court probed these representations in detail during the hearing, and counsel provided 12 reasonable explanations for his assessment of the poor likelihood of success. Overall, counsel 13 identified good grounds for concluding that the $1.5 million settlement figure was proportionate to 14 plaintiffs’ stated inability to prove their case and establish Tetra Tech’s liability. 15 It is true, as the Developer Defendants note, that the Fifth Amended Complaint alleged 16 Tetra Tech’s liability to be in excess of $27 billion, Dkt. No. 374 at 6, but plaintiffs’ counsel 17 acknowledged that the dream of billions in damages went up in smoke in the face of the factual 18 record developed during discovery. This is not the first time that a party massively overstated the 19 value of its claims in a pleading, and it is not a reason to conclude the settlement was not in good 20 faith. So too for the Developer Defendants’ suggestion that the Sixth Amended Complaint had a 21 much greater focus on Tetra Tech vis-à-vis themselves. Id. at 6-7. As the Court concluded in 22 denying a good faith determination for the Developers Defendants’ own settlement, this focus was 23 the product of a collusive arrangement sponsored by the Developer Defendants through a self- 24 serving “common interest” agreement in place at the time that complaint was filed. See Dkt. 25 No. 314 at 3-4. Such suspect circumstances are not in evidence here. 26

27 1 In making this determination, the Court considers the record as a whole, including the Developer ] The Developer Defendants also did not demonstrate that the settlement between plaintiffs 2 || and Tetra Tech was “aimed to injure” the Developer Defendants’ interests. KS Resources Limited 3 || v. A.W.L.L. Group Inc., No. 2:11-cv-01517-JHN-JCG, 2012 WL 12888324 (C.D. Cal. Apr. 23, 4 ||} 2012), aff'd, 567 F. App’x. 561 (9th Cir. 2014). It bears mention that the Developer Defendants 5 || have a separate case for damages pending against Tetra Tech that is proceeding to trial. See Case 6 || Nos. 20-1481, 20-1485. 7 In light of these and the other factors set out in Tech-Bilt, 38 Cal. 3d at 499, the Court 8 || grants Tetra Tech’s good faith settlement determination motion. Dkt. No. 371. Plaintiffs’ motion 9 || for the approval of minors’ compromises, Dkt. No. 369, will be granted by separate order. 10 || Because all parties to the litigation have now settled all claims, the case will be administratively 11 closed pending the parties’ final dismissal of the action. %L IT IS SO ORDERED. 13 Dated: February 17, 2026 14 15 JAMES/PSNATO = 16 United tates District Judge 17

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