Judge Clears Navy Contractor’s $1.5 Million Settlement with Hunters Point Residents
•February 17, 2026
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Why It Matters
The approval signals that large environmental fraud claims can be trimmed to realistic values, shaping future liability negotiations for defense contractors. It also underscores the difficulty of proving causation in legacy contamination cases, influencing how municipalities and developers manage remediation risk.
Key Takeaways
- •Judge affirms $1.5M settlement with Tetra Tech residents
- •Settlement deemed good faith despite earlier $27B claim
- •Developers settled separately for $10.8M, trial continues
- •Plaintiffs receive minimum $230 each after signing releases
- •Case highlights challenges proving Navy contractor contamination liability
Pulse Analysis
Hunters Point’s legacy of nuclear testing and ship decontamination left a patchwork of radioactive hotspots that have haunted San Francisco’s Bayview neighborhood for decades. Tetra Tech, tasked with the site’s cleanup, faced accusations of falsifying soil samples to mask lingering contamination, prompting a class‑action lawsuit by thousands of residents. The legal battle highlighted the complexities of environmental remediation, where historical data gaps and technical uncertainties often collide with community health concerns, creating a fertile ground for high‑stakes litigation.
The settlement process unfolded over several years, beginning with a 2020 mediation that produced a proposed $1.5 million payout to residents. Judge James Donato rejected developer arguments that the figure was “out of the ballpark,” noting that plaintiffs had previously pursued a $27 billion demand that evaporated under factual scrutiny. While the residents’ claim was capped, developers Five Point Holdings and Lennar reached a separate $10.8 million agreement, yet their own lawsuits against Tetra Tech continue toward trial. The judge’s ruling emphasized that overstated claims do not automatically invalidate a settlement, provided the agreement reflects a realistic assessment of liability and damages.
Beyond the immediate payout, the case sets a precedent for how environmental fraud claims against defense contractors are evaluated. By confirming a modest settlement as good faith, the court signals to both industry players and claimants that proving causation and quantifying damages are paramount. Companies engaged in hazardous site remediation may now prioritize transparent sampling protocols and robust documentation to mitigate litigation risk. Meanwhile, affected communities gain insight into the realistic financial outcomes of large‑scale environmental lawsuits, shaping future negotiations and public‑policy discussions around legacy contamination remediation.
Judge clears Navy contractor’s $1.5 million settlement with Hunters Point residents
(CN) — A federal judge on Tuesday agreed that a $1.5 million settlement of claims brought by residents near the former Hunters Point Naval Yard in San Francisco against the defense contractor who has been cleaning up the heavily contaminated site was made in good faith.
U.S. District Judge James Donato rejected the arguments by real estate developers — who also had been sued by the residents and who agreed to settle for $10.4 million — that the settlement wasn’t “in the ballpark” given that the plaintiffs at one point had sought $27 billion from Tetra Tech for purportedly falsifying soil sample to hide the radioactive contamination of the site.
“Plaintiffs’ counsel acknowledged that the dream of billions in damages went up in smoke in the face of the factual record developed during discovery,” the judge said. “This is not the first time that a party massively overstated the value of its claims in a pleading, and it is not a reason to conclude the settlement was not in good faith.”
The judge, a Barack Obama appointee, also noted that, at a hearing last week, an attorney for the residents had acknowledged they could never prove causation against Tetra Tech and that most and possibly all of their claims against the Navy contractor wouldn’t have survived summary judgment or a jury trial.
In addition, Donato said, the real estate developers had their own claims for damages against Tetra Tech that are proceeding to trial.
An attorney for the developers didn’t immediately respond to a request for comment.
The residents’ lawsuit arose from accusations that Tetra Tech EC, a wholly owned subsidiary of Tetra Tech Inc., ordered workers to destroy post-cleanup soil samples that “had some of the highest radioactive readings” and replace them with samples from other areas of the site while avoiding “radioactive hot spots.”
The Hunters Point shipyard in San Francisco’s Bayview neighborhood was home to top-secret nuclear tests from 1946 to 1969 and a place where ships returning from hydrogen bomb tests were decontaminated, both potential sources of radioactive waste.
The plaintiffs also named real estate developers Five Point Holdings LLC and the Lennar Corporation as defendants.
The case was referred to a mediator for settlement in 2020. The parties accepted the mediator’s proposal for settlement in October. Claims against the developers were settled separately for $10.8 million.
The plaintiffs include 6,500 individuals who opted in to the lawsuit. Under the agreement, those who want to participate in the settlement will be required to submit a release waiving their rights to sue Tetra Tech and its subsidiaries for any settled claims.
The $1.5 million award will be split among qualified plaintiffs, with a minimum estimated individual recovery of $230. Each plaintiff will also be required to pay their own attorneys’ fees.
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