Dimare Fresh, Inc. v. United States , 808 F.3d 1301 ( 2015 )

United States Court of Appeals
for the Federal Circuit
______________________
DIMARE FRESH, INC., DIMARE RUSKIN, INC.,
DIMARE JOHNS ISLAND, INC., BUTLER FARMS,
INC., CIRCLE C PRODUCE, LLC, FLOWERS
FARMS, LLC, GREGORY ENTERPRISES, LLC,
HIGH HOPE FARMS, LLC, HOPKINS FARMS, LLC,
FRED JACKSON, DBA JACKSON FARMS, DAN
JONES, JUNIPER TOMATO GROWERS, INC., JWM
FARMS, LLC, MOBLEY GREENHOUSE
INVESTMENTS, LLC, DALE MURRAY, GREG
MURRAY, DBA MURRAY FARMS, PATTERSON
FARM, INC., QUALITY PRODUCE, LLC, SK
ENTERPRISES OF NORTH FLORIDA, INC.,
TOWNSEND BROTHERS FARMS, INC., TWO
FEATHERS FARMS, INC., GARGIULO, INC., DMB
PACKING CORP., ARTESIAN FARMS
INCORPORATED, KUZZENS, INC., FARM OP, INC.,
WEST COAST TOMATO, LLC, MICHAEL BOREK
FARMS, LLC, EAST COAST BROKER’S AND
PACKERS, INC., A FLORIDA CORPORATION, C/O
GERARD A. MCHALE, JR. AS TRUSTEE, DIEHL
AND LEE FARMS, FRANK DIEHL, DBA FRANK
DIEHL FARMS, ORA DIEHL,
Plaintiffs-Appellants
v.
UNITED STATES,
Defendant-Appellee
______________________
2015-5006
______________________
2 DIMARE FRESH, INC. v. UNITED STATES
Appeal from the United States Court of Federal
Claims in No. 1:13-cv-00519-LJB, Senior Judge Lynn J.
Bush.
______________________
Decided: October 28, 2015
______________________
M. STEPHEN TURNER, Broad & Cassel, Tallahassee,
FL, argued for plaintiffs-appellants. Also represented by
DAVID K. MILLER.
ERIC LAUFGRABEN, Commercial Litigation Branch,
Civil Division, United States Department of Justice,
Washington, DC, argued for defendant-appellee. Also
represented by BENJAMIN C. MIZER, ROBERT E.
KIRSCHMAN, JR., FRANKLIN E. WHITE, JR.; DARETIA
HAWKINS, Office of the General Counsel, United States
Department of Health and Human Services, Washington,
DC.
WILLIAM S. BILENKY, MansonBolves, P.A., Tampa, FL,
for amici curiae The Florida Tomato Exchange, The
Florida Fruit and Vegetable Association.
BAYLEN LINNEKIN, North Bethesda, MD, for amici
curiae Keep Food Legal Foundation, Baylen Linnekin.
______________________
Before WALLACH, BRYSON, and HUGHES, Circuit Judges.
WALLACH, Circuit Judge.
Plaintiffs-Appellants (“Tomato Producers” or “Appel-
lants”) appeal the decision of the United States Court of
Federal Claims (“Claims Court”) dismissing their Amend-
ed Complaint pursuant to Rule 12(b)(6) of the Rules of the
United States Court of Federal Claims (“RCFC”). The
DIMARE FRESH, INC. v. UNITED STATES 3
Claims Court dismissed the Amended Complaint on the
ground that press releases issued by the Food and Drug
Administration (“FDA” or “Government”), which warned
consumers of a possible link between Appellants’ toma-
toes and an outbreak of Salmonella Saintpaul (“salmonel-
la”), did not effect a regulatory taking. See Dimare Fresh,
Inc. v. United States, 118 Fed. Cl. 455 (2014). For the
reasons set forth below, we affirm.
I. BACKGROUND
A. FDA Press Releases
Between April 23 and June 1, 2008, there were fifty-
seven reported cases of salmonellosis, an infection caused
by the salmonella bacteria. Subsequently, the FDA,
federal and state agencies, and food industry trade asso-
ciations began an investigation to determine the source of
the contamination. On June 3, 2008, the FDA issued a
press release alerting consumers that the salmonella
outbreak “appears to be linked” to the consumption of
“raw red plum, red Roma, or round red tomatoes.” 1 J.A.
1 The warning stated in relevant part:
The [FDA] is alerting consumers in New Mexico
and Texas that a salmonellosis outbreak appears
to be linked to consumption of certain types of raw
red tomatoes and products containing raw red to-
matoes. . . .
The specific type and source of tomatoes are under
investigation. However, preliminary data suggest
that raw red plum, red Roma, or round red toma-
toes are the cause. At this time, consumers in
New Mexico and Texas should limit their tomato
consumption to tomatoes that have not been im-
plicated in the outbreak.
J.A. 34.
4 DIMARE FRESH, INC. v. UNITED STATES
34. In that press release, the FDA also stated that “the
source of the contaminated tomatoes may be limited to a
single grower or packer or tomatoes from a specific geo-
graphic area” and that it was working “diligently . . . to
quickly determine the source and type of the contaminat-
ed tomatoes.” J.A. 34.
On June 7, 2008, the FDA released a second press re-
lease, informing the public that during the course of its
investigation, it used “traceback 2 and other distribution
pattern information” to identify specific geographic
sources where tomatoes were safe to consume. 3 (footnote
added). J.A. 35.
2 According to the FDA:
A traceback investigation is the method used to
determine and document the distribution and
production chain, and the source(s) of a product
that has been implicated in a foodborne illness in-
vestigation.
Guide to Traceback of Fresh Fruits and Vegeta-
bles Implicated in Epidemological Investigations, FDA,
http://www.fda.gov/ICECI/Inspections/InspectionGuides/u
cm109510.htm (last visited Aug. 13, 2015).
3 The warning stated in relevant part:
On June 5, using traceback and other distribution
pattern information, FDA published a list of
states, territories, and countries where tomatoes
are grown and harvested which have not been as-
sociated with this outbreak. This updated list in-
cludes: Arkansas, California, Georgia, Hawaii,
North Carolina, South Carolina, Tennessee, Tex-
as, Belgium, Canada, Dominican Republic, Gua-
temala, Israel, Netherlands, and Puerto Rico. . . .
DIMARE FRESH, INC. v. UNITED STATES 5
On June 13, 2008, the FDA conducted a media brief-
ing through its then–Associate Commissioner for Foods,
Dr. David Acheson. Dr. Acheson stated the FDA suspect-
ed the contaminated tomatoes had been shipped from
Florida or Mexico, and red plum, red Roma, and red round
tomatoes were “incriminated with the outbreak.” J.A. 40.
Dr. Acheson, however, emphasized that the FDA had only
issued a warning to consumers, and had not requested
that any producers voluntarily recall tomatoes because
the FDA had not “identified the particular source” of the
salmonella outbreak. J.A. 48. Dr. Acheson also stated
the FDA was still in the process of conducting an “ongoing
investigation,” and therefore the information gathered
thus far was to remain “confidential.” J.A. 42.
On July 17, 2008, the FDA issued a third press re-
lease announcing that “fresh tomatoes now available in
the domestic market are not associated with the current
outbreak.” J.A. 62. “As a result, the agency [] remov[ed]
its June 7 warning against eating certain types of red raw
tomatoes.” J.A. 62. Although the link between the sal-
monella outbreak and the Appellants’ tomatoes was
eventually disproved, the Tomato Producers allege that
all or almost all of the value of the perishable tomatoes
was destroyed due to a decrease in market demand for the
Appellants’ tomatoes. Appellants’ Br. 19.
B. The Tomato Producers’ Amended Complaint
FDA recommends that retailers, restaurateurs,
and food service operators not offer for sale and
service raw red Roma, raw red plum, and raw red
round tomatoes unless they are from the sources
listed above. Cherry tomatoes, grape tomatoes,
and tomatoes sold with vine still attached, may
continue to be offered from any source.
J.A. 35.
6 DIMARE FRESH, INC. v. UNITED STATES
The Tomato Producers are “growers, packers, and
shippers of tomatoes in Florida and South Georgia.”
Dimare, 118 Fed. Cl. at 456 (internal quotation and
citation marks). The Tomato Producers initially filed this
suit as a putative class action on July 29, 2013. Supple-
mental Appendix 1. 4 Upon the Government’s motion to
dismiss the Complaint, the Tomato Producers filed an
Amended Complaint on April 16, 2014, electing to remove
the class allegations and name additional parties to the
suit.
In the Amended Complaint, the Tomato Producers al-
lege the June 3 and June 7, 2008 FDA press releases were
harmful to their spring 2008 sales and that “[t]here was
no practical or legal opportunity to contest, controvert or
prevent the effect of the warnings.” J.A. 31. The Tomato
Producers also allege they “had [a] reasonable investment
backed expectation to realize the market value of their
tomatoes, but as a result of [the] FDA’s regulatory warn-
ings, all economic value was lost due to the collapse of the
market for their tomatoes.” J.A. 31. Finally, the Tomato
Producers assert that the “only value of the tomatoes was
prompt sale in bulk” and they “had a property right in
their healthy tomatoes, specifically the right to market
and sell them as healthy food.” J.A. 31. As a result, the
Tomato Producers claim that their “property right was
effectively rendered valueless by the FDA’s actions.” J.A.
31.
Although the Tomato Producers acknowledged they
were not mandated to quarantine their crops or prohibit-
ed from exercising their right to market or sell the toma-
toes, they nonetheless allege that because they “had no
practical alternative to preserve their tomatoes,” J.A. 31,
4 Pursuant to Federal Circuit Rule 30(f), the Gov-
ernment attached a supplemental appendix to its brief.
Appellee’s Br. 5 n.3.
DIMARE FRESH, INC. v. UNITED STATES 7
the FDA press releases “had the same burdensome effect
as quarantining or prohibiting sale of [their] tomato crop.”
J.A. 30. Accordingly, the Tomato Producers allege that
due to its practical effect on the market demand for
tomatoes, the FDA’s issuance of the press releases must
be recognized as a “regulatory taking of the [Tomato
Producers’] perishable tomatoes.” J.A. 32.
C. Procedural Posture and Jurisdiction
On May 5, 2014, the Government moved to dismiss
the Tomato Producers’ Amended Complaint pursuant to
RCFC 12(b)(6) for failure to state a claim upon which
relief can be granted. On September 18, 2014, the Claims
Court granted the Government’s motion and entered a
judgment dismissing the Amended Complaint. On Octo-
ber 9, 2014, the Tomato Producers filed a timely notice of
appeal. This court has jurisdiction under 28 U.S.C. §
1295(a)(3) (2012).
I. DISCUSSION
A. The General Principle Articulated by the Claims
Court Is Not Supported by Our Takings Jurisprudence
Whether the Claims Court properly dismissed a
“complaint for failure to state a claim upon which relief
could be granted is an issue of law which we review de
novo.” Cambridge v. United States, 558 F.3d 1331, 1335
(Fed. Cir. 2009) (citation omitted). To avoid dismissal for
failure to state a claim, a complaint must allege facts
“plausibly suggesting (not merely consistent with)” a
showing of entitlement to relief. Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 557 (2007); see also Cambridge,
558 F.3d at 1335. At this point in the proceedings, we
accept the Tomato Producers’ well-pleaded factual allega-
tions as true. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
Although we primarily consider the allegations in a
complaint, we are “not limited to the four corners of the
complaint.” 5B Charles Alan Wright & Arthur R. Miller,
8 DIMARE FRESH, INC. v. UNITED STATES
Federal Practice and Procedure § 1357 (3d ed. 2004). We
may also look to “matters incorporated by reference or
integral to the claim, items subject to judicial notice, [and]
matters of public record.” Id.
The Claims Court dismissed the Tomato Producers’
Amended Complaint because it concluded their “regulato-
ry takings claims are not plausible.” Dimare, 118 Fed.
Cl. at 459 (capitalization modified). In rendering this
decision, the Claims Court specifically identified three of
its cases from which it discerned the general principle
that “[a] regulatory takings claim is not plausible and
cannot proceed when the government action at issue has
no legal effect on the plaintiff’s property interest.” Id. at
460 (citing A-1 Cigarette Vending, Inc. v. United States, 49
Fed. Cl. 345 (2001), aff’d sub nom. Brubaker Amusement
Co. v. United States, 304 F.3d 1349 (Fed. Cir. 2002);
Flowers Mill Assocs. v. United States, 23 Cl. Ct. 182
(1991); NBH Land Co. v. United States, 576 F.2d 317 (Ct.
Cl. 1978)). The bright-line rule articulated by the Claims
Court does not reflect applicable precedent.
The Takings Clause of the Fifth Amendment guaran-
tees just compensation when private property is “taken”
for public use. U.S. Const. amend. V. “It protects ‘private
property’ without any distinction between different
types.” Horne v. Dep’t of Agric., 135 S. Ct. 2419, 2426
(2015). The “classic taking [is one] in which the govern-
ment directly appropriates private property for its own
use.” Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l
Planning Agency, 535 U.S. 302, 324 (2002) (brackets and
internal quotation marks omitted). The Tomato Produc-
ers do not allege, and their Amended Complaint does not
raise an allegation of, a “direct government appropriation
or physical invasion of [their] private property.” Lingle v.
Chevron U.S.A. Inc., 544 U.S. 528, 537 (2005); see also,
e.g., United States v. Pewee Coal Co., 341 U.S. 114 (1951)
(government seizure and operation of private coal mine);
United States v. Gen. Motors Corp., 323 U.S. 373 (1945)
DIMARE FRESH, INC. v. UNITED STATES 9
(government occupation of private warehouse). Therefore,
the Tomato Producers’ Amended Complaint could only be
read to support a regulatory takings claim.
Before the Supreme Court’s decision in Pennsylvania
Coal Co. v. Mahon, 260 U.S. 393 (1922), “the Takings
Clause was understood to provide protection only against
a direct appropriation of property––personal or real.
Pennsylvania Coal expanded the protection of the Takings
Clause, holding that compensation was also required for a
‘regulatory taking’––a restriction on the use of property
that went ‘too far.’” Horne, 135 S. Ct. at 2427 (citing Pa.
Coal, 260 U.S. at 415).
The Supreme Court has treated certain regulatory ac-
tions as “categorical” takings. A categorical taking occurs
when regulations “compel the property owner to suffer a
physical invasion of his property” or prohibit “all economi-
cally beneficial or productive use.” Lucas v. S.C. Coastal
Council, 505 U.S. 1003, 1015 (1992) (internal quotation
marks omitted). However, beyond those categories, the
Supreme Court has not “develop[ed] any ‘set formula’ for
determining when ‘justice and fairness’ require that
economic injuries caused by public action be compensated
by the government, rather than remain disproportionately
concentrated on a few persons.” Penn Cent. Transp. Co. v.
City of New York, 438 U.S. 104, 124 (1978). Instead, it
has relied on “ad hoc, factual inquiries into the circum-
stances of each particular case.” Connolly v. Pension
Benefit Guar. Corp., 475 U.S. 211, 224 (1986) (citations
omitted).
In engaging in these ad hoc, factual inquires, the Su-
preme Court has identified several factors bearing partic-
ular significance. In Penn Central, the Supreme Court
considered three factors: (1) “[t]he economic impact of the
regulation on the claimant”; (2) “the extent to which the
regulation has interfered with distinct investment-backed
expectations”; and (3) “the character of the government
10 DIMARE FRESH, INC. v. UNITED STATES
action.” Penn Cent. Transp. Co., 438 U.S. at 124; accord
Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1005 (1984);
PruneYard Shopping Ctr. v. Robbins, 447 U.S. 74, 82–83
(1980).
The general principle proffered by the Claims Court
does not accord with Supreme Court precedent. The
Supreme Court’s “Takings Clause jurisprudence has
generally eschewed ‘magic formula[s]’ and has ‘recognized
few invariable rules.’” Horne, 135 S. Ct. at 2437 (So-
tomayor, J., dissenting) (emphasis added) (quoting Ark.
Game & Fish Comm’n v. United States, 133 S. Ct. 511,
518 (2012)). The general rule that the government action
must have a “legal effect” on the property interest is not
one of those rules.
In urging courts to consider the “character of the gov-
ernment action,” the Supreme Court in Penn Central
recognized government action may impact property in
myriad ways and what is important is the nature or
substance of the government’s action, as opposed to the
precise form it may take. Penn Cent. Transp. Co., 438
U.S. at 124. Unlike takings cases concerning the physical
appropriation or government condemnation of property,
the Supreme Court has abjured the application of rigid
rules in its regulatory takings analysis. See Goldblatt v.
Town of Hempstead, 369 U.S. 590, 594 (1962) (“There is
no set formula to determine where regulation ends and
taking begins.”).
Moreover, the three cases cited by the Claims Court to
support its general principle can be distinguished on the
basis that, contrary to the case before this court, the
administrative agency lacked the authority to regulate
the property it “appropriated.” In A-1 Cigarette Vending,
owners and operators of tobacco vending machines filed
complaints against the United States, alleging the FDA
effected a temporary regulatory taking by promulgating
regulations, subsequently invalidated, which banned the
DIMARE FRESH, INC. v. UNITED STATES 11
sale of cigarettes and smokeless tobacco from most vend-
ing machines. 49 Fed. Cl. at 346–47. In rejecting the
tobacco vending machine owners’ complaint, the Claims
Court determined that because the Supreme Court in
FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120
(2000), ruled that the Federal Food, Drug, and Cosmetic
Act did not confer authority to the FDA to regulate tobac-
co, tobacco vending machine owners could not sound a
temporary regulatory takings claim. A-1 Cigarette Vend-
ing, 49 Fed. Cl. at 364 (The FDA “lack[ed] [the] authority
to regulate tobacco in the first instance”).
Similarly, in Flowers Mill, the Federal Aviation Ad-
ministration (“FAA”) issued a notice to a landowner,
stating his proposal to erect a building on land adjacent to
an airport would constitute hazard to air navigation.
23 Cl. Ct. at 184. The landowner subsequently alleged a
regulatory takings claim based on the FAA’s determina-
tion. Id. at 183. In rejecting the landowner’s claim, the
Claims Court found the FAA did not possess the regulato-
ry authority to prohibit the landowner from erecting the
building. According to the court, the determination was
“issued by an agency with no power to prohibit or limit
proposed construction.” Id. at 189.
Finally, in NBH Land, landowners adjoining a mili-
tary base filed a takings complaint against the govern-
ment based on the actions of military officials who
publicized the intent of army officials to request funds
from Congress to expand the base. 576 F.2d at 318. The
disclosure of this information resulted in many persons
changing their actions with respect to the land, thus
leading to pecuniary losses for many landowners. Id. The
Claims Court determined the actions of the military
officials did not constitute a compensable taking because
Congress rejected the expansion proposals, and the mili-
tary officials had no authority to act without approval of
the proposal. Id. at 318 (“Congress has never given
affirmative support or recognition of any sort to this
12 DIMARE FRESH, INC. v. UNITED STATES
project.”). According to the court, the government action
was “not expressly authorized or directed by Congress [or]
at least [] a natural consequence of Congressionally
approved measures.” Id. at 319.
The decisions in these cases cannot reasonably be ex-
trapolated to justify the general principle proffered by the
Claims Court. In all three cases, the court denied the
regulatory takings claims not because the government’s
action did not have any legal effect, but because the
agencies had no authority to regulate. An agency’s lack of
authority to regulate necessarily means its action cannot
have any legal effect. See A-1 Cigarette Vending, 49 Fed.
Cl. at 354 (“[A] takings claim cannot arise when an agen-
cy acts without congressional authority.”); United States
v. N. Am. Transp. & Trading Co., 253 U.S. 330, 333
(1920) (“In order that the government shall be liable it
must appear that the officer who has physically taken
possession of the property was duly authorized so to do,
either directly by Congress or by the official upon whom
Congress conferred the power.”); Fla. Rock Indus., Inc. v.
United States, 791 F.2d 893, 898 (Fed. Cir. 1986); Armijo
v. United States, 663 F.2d 90, 95 (Ct. Cl. 1981) (If the
government action is unauthorized, “the acts of the de-
fendant’s officers may be enjoinable, but they do not
constitute taking effective to vest some kind of title in the
government and entitlement to just compensation in the
owner or former owner”). However, the inverse is not
true. When agencies possess congressional authority to
regulate, we have recognized that agencies may engage in
actions suitable for a regulatory takings claim irrespec-
tive of the fact that the action does not have any legal
effect or impose a direct legal obligation on any party. See
A & D Auto Sales, Inc. v. United States, 748 F.3d 1142,
1154 (Fed. Cir. 2014) (stating that government action
absent a “statute, regulation, or direct order” may support
a regulatory takings claim).
DIMARE FRESH, INC. v. UNITED STATES 13
In A & D Auto Sales, former franchisees of General
Motors Corporation and Chrysler LLC brought a regula-
tory takings claim based on allegations the government
took their franchise contracts. Id. at 1147. The auto
dealers alleged that, as a condition of the bailout of these
companies during the recession and credit crisis of 2008 to
2009, the government required the auto manufacturers to
terminate their franchise agreement contracts. Id. In
determining whether coercive government action could
effect a regulatory takings claim, we determined that
“coercion . . . may create takings liability.” Id. at 1154.
Similarly, in Yuba Goldfields, Inc. v. United States, alt-
hough there was no statute, regulation, or direct order,
this court held that the government’s action in sending a
letter to the alleged holder of a mineral interest in gov-
ernment land, informing him that he had no extraction
rights and that his dredging or removal activity was
prohibited, could give rise to a regulatory takings claim.
723 F.2d 884, 885–86, 891 (Fed. Cir. 1983). Although the
letter in Yuba was not the product of any statutory or
regulatory authority, it threatened Mr. Yuba with legal
recourse had he continued to mine the minerals on the
land. Id. at 884. In finding that material fact issues
existed to satisfy a takings claim, we held that the Consti-
tution measures a taking of property not by “what [the]
government said it was doing, or what it later says its
intent was. . . . What counts is what the government did.”
Id. at 889–90 (emphasis added) (citing Hughes v. Wash-
ington, 389 U.S. 290, 298 (1967) (Stewart, J., concurring)).
Therefore, we reject the general principle proffered by the
Claims Court because it contravenes this court’s prevail-
ing precedent and unduly narrows the regulatory takings
jurisprudence.
B. Tomato Producers’ Amended Complaint Does Not
Raise a Regulatory Takings Claim
We turn next to whether there has been government
action sufficient to invoke a regulatory takings analysis
14 DIMARE FRESH, INC. v. UNITED STATES
under Penn Central. The precise issue is whether the
FDA’s press releases issued on June 3 and June 7, 2008,
together with the media briefing held on June 13, 2008,
constitute government action sufficient to effect a regula-
tory taking. It does not.
The Tomato Producers argue that the FDA’s authority
to issue the press releases was an “exercise of [its] regula-
tory authority.” Appellants’ Br. 18. Although the Tomato
Producers concede that the public warnings were not a
“formal order,” they nonetheless assert that the “actions
had the practical effect” of a formal order because they
“stopp[ed] all sales, purchases, and deliveries.” Id. In the
present case, the public warnings issued by the FDA via
the press releases and media briefing, although them-
selves not a regulation, were based on a regulation prom-
ulgated pursuant to 21 U.S.C. § 375(b), which allows the
FDA to publicize information regarding food, including
produce, when “in the opinion of the [FDA], imminent
danger to the health . . . of the consumer” exists. In
interpreting what constitutes “imminent danger” or
“hazard” to the public health, the FDA promulgated 21
C.F.R. § 2.5. Subsection (a) of that provision reads:
Within the meaning of the Federal Food, Drug,
and Cosmetic Act an imminent hazard to the pub-
lic health is considered to exist when the evidence
is sufficient to show that a product or practice,
posing a significant threat of danger to health,
creates a public health situation . . . that should
be corrected immediately to prevent injury. . . .
The imminent hazard may be declared at any
point in the chain of events which may ultimately
result in harm to the public health. The occur-
rence of the final anticipated injury is not essen-
tial to establish that an imminent hazard of such
occurrence exists.
21 C.F.R. § 2.5(a).
DIMARE FRESH, INC. v. UNITED STATES 15
The fact that the FDA’s actions are authorized by a
regulation promulgated pursuant to the publicity provi-
sion in 21 U.S.C. § 375(b) does not support the Tomato
Producers’ regulatory takings claim. “[A]n administrative
agency’s power to regulate in the public interest must
always be grounded in a valid grant of authority from
Congress.” Brown & Williamson Tobacco, 529 U.S. at 161
(emphasis added). For the purpose of establishing a
regulatory takings claim, what matters is whether the
FDA’s actions––the issuance of the press releases and
media briefing––resulted in a taking of the Tomato Pro-
ducers’ property.
The Tomato Producers point to no taking of their
property. What the Tomato Producers allege is that the
FDA’s June 2008 press releases and media briefing was
government action sufficient to effect a regulatory taking.
Appellant’s Br. 4–9. However, it appears the Tomato
Producers’ regulatory takings claim is conditioned on the
fact that the FDA was incorrect in its initial determina-
tion that the tomatoes were linked to the salmonella
outbreak. Whether the FDA was correct or not in taking
an action is academic to a regulatory takings analysis.
See Del-Rio Drilling Programs, Inc. v. United States, 146
F.3d 1358, 1362 (Fed. Cir. 1998) (“[I]f the actions of an
officer do not conflict with the terms of his valid statutory
authority, then they are the actions of the sovereign,
whether or not they are tortious under general law.”)
(citing Larson v. Domestic & Foreign Commerce Corp.,
337 U.S. 682 (1949)).
The problem with the Tomato Producers’ contention is
that it seeks to weave a regulatory takings claim, without
more, simply out of the fact that the FDA’s press releases
and media briefing impacted market demand for their
produce. However, any government action such as a
warning or report which provides information about a
good or service is bound to impact consumer demand in
the relevant market. Dissemination of information is
16 DIMARE FRESH, INC. v. UNITED STATES
critical to the adequate functioning of efficient markets.
The fact that the market chooses to incorporate all availa-
ble information, without more, cannot form the basis of a
regulatory takings claim. See Kirby Forest Indus., Inc. v.
United States, 467 U.S. 1, 15 (1984) (“[I]mpairment of the
market value of [] property incident to otherwise legiti-
mate government action ordinarily does not result in a
taking. . . . At least in the absence of an interference
with an owner’s legal right to dispose of his [property],
even a substantial reduction of the attractiveness of the
property to potential purchasers does not entitle the
owner to compensation under the Fifth Amendment.”); A-
1 Cigarette Vending, 49 Fed. Cl. at 357 (“The risks of the
market prior to an actual taking are traditionally borne
by the owner of the property, as ‘incidents of ownership’
and accordingly the reactions of third parties cannot be
considered as effecting a taking.”) (citing Danforth v.
United States, 308 U.S. 271, 285 (1939)).
Unlike A&D Auto Sales and Yuba, in the case before
us, there is not a prohibition or any coercive government
action restricting the Tomato Producers from selling,
disposing, or using their produce however they desire.
What Tomato Producers effectively request is for this
court to find that government action devoid of coercion,
legal threat, regulatory restriction, or any binding obliga-
tion may effect a regulatory taking. We will not.
Although the FDA’s press releases and media briefing
adversely impacted the market demand for the Tomato
Producers’ tomatoes, such actions are different from one
prohibiting supply, such as an FDA directive instructing
the Tomato Producers not to sell their tomatoes. The
latter forecloses the market entirely to the supplier.
Here, the FDA’s public warnings did not restrict the
Tomato Producers from selling their produce, nor did it
place any restriction on how they may use or dispose their
tomatoes. See Andrus v. Allard, 444 U.S. 51, 66 (1979)
(“The regulations challenged here do not compel the
DIMARE FRESH, INC. v. UNITED STATES 17
surrender of the artifacts, and there is no physical inva-
sion or restraint upon them.”). Therefore, the Tomato
Producers do not point to any stick in their bundle of
property rights that was removed by the FDA’s press
releases and media briefing. See id. (“[I]t is crucial [to a
determination of no regulatory taking] that [Appellants]
retain the rights to possess and transport their property,
and to donate or devise the[ir] pro[perty].”). Acceptance of
the Tomato Producers’ contentions would take us far
afield from the primary purpose of our takings jurispru-
dence––to determine whether a “restriction upon the use
of property . . . deprives the owner of some right thereto-
fore enjoyed.” Pa. Coal, 260 U.S. at 417 (Brandeis, J.,
dissenting). The right previously enjoyed by the Tomato
Producers––their ability to supply their tomatoes in the
relevant market––has not changed.
Furthermore this court has recognized that in the
context of the protection of public health and safety, “the
private interest has traditionally been most confined and
governments are given the greatest leeway to act without
the need to compensate those affected by their actions.”
Rose Acre Farms Inc. v. United States, 559 F.3d 1260,
1281–82 (Fed. Cir. 2009) (citing Jacob Ruppert, Inc. v.
Caffey, 251 U.S. 264, 303 (1920); Purity Extract & Tonic
Co. v. Lynch, 226 U.S. 192 (1912); N. Am. Cold Storage
Co. v. City of Chicago, 211 U.S. 306, 315 (1908)). Many
federal statutes concerning the protection of the public
health and safety expressly authorize federal agencies to
disseminate information or publicize reports similar to
the press releases and media briefing conducted by the
FDA under the publicity provision of 21 U.S.C. § 375(b).
See, e.g., 42 U.S.C. § 242o(b), Pub. L. No. 95-353, § 310, 88
Stat. 362 (1974) (authorizing the Secretary of the Health,
Education and Welfare, now knows as the Health and
Human Services, to “issue information related to public
health, in the form of publications or otherwise, for the
use of the public, and [to] publish weekly reports of health
18 DIMARE FRESH, INC. v. UNITED STATES
conditions . . . and other pertinent health information for
the use of persons and institutions concerned with health
services”); 15 U.S.C. § 1272(b), Pub. L. No. 86-613, § 13,
74 Stat. 372 (1960) (authorizing the United States Con-
sumer Product Safety Commission to “cause to be dissem-
inated information regarding hazardous substances in
situations involving, in the opinion of the Commission,
imminent danger to health”). In accordance with these
statutes, public warnings, reports or advisories such as
the FDA press releases and media briefings are frequent-
ly employed by administrative agencies. See generally
United States Department of Health and Human Ser-
vices, The Health Consequences of Smoking––50 Years
of Progress: A Report of the Surgeon General (2014),
eral (2014), http://www.surgeongeneral.gov/library/repor
ts/50-years-of-progress/full-report.pdf`` (comprehensive
report chronicling the destructive consequences of fifty
years of tobacco use in the United States); Infant Deaths
Prompt CSPC Warning About Sling Carriers for Babies,
United States Consumer Safety Product Commission
http://www.cpsc.gov/en/Newsroom/News Releases/2010/In
fant-Deaths-Prompt-CPSC-Warning-About-Sling-
Carriers-for-Babies/ (last visited Aug. 14, 2015) (news
release detailing the potential suffocation hazards sling
carriers may pose to babies).
We are not unsympathetic to the Tomato Producers’
predicament and we recognize that the FDA’s actions may
have inimical consequences on future parties. 5 However,
5 In its July 17, 2008 press release reversing initial
warnings against eating the Tomato Producers’ tomatoes,
the FDA stated that it possessed “evidence showing that
raw jalapeno and raw serrano peppers now available in
the domestic market may be linked” to the salmonella
outbreak. J.A. 62. However, on August 28, 2008, similar
to the warnings concerning Appellants’ tomatoes, the
DIMARE FRESH, INC. v. UNITED STATES 19
to the extent the publicity of adverse information may be
premature, misleading, incomplete or simply incorrect,
this issue extends well beyond our regulatory takings
jurisprudence, and application of it in this instance would
extend the Takings Clause beyond any recognition or
practicality. The creation of standards to hold agencies
accountable in this context should be left to Congress. See
Nathan Cortez, Adverse Publicity by Administrative
Agencies in the Internet Era, 2011 BYU L. Rev. 1371, 1371
(arguing that agencies should “retain wide discretion to
communicate with the public, but should be held account-
able if they abuse that discretion”); Ernest Gellhorn,
Adverse Publicity by Administrative Agencies, 86 Harv. L.
Rev. 1380, 1384 (1973) (“[L]osses which may result from
adverse agency publicity directed toward an entire indus-
try are likely to be great, and concentrated public atten-
tion heightens the need for carefully conceived and well-
articulated procedures.”).
CONCLUSION
In the instant case, because the Tomato Producers
have failed to raise a regulatory takings claim, we affirm
the dismissal of the Claims Court.
For the foregoing reasons, the decision of the Claims
Court is
AFFIRMED
FDA “lifted its advice to consumers to avoid eating jala-
peno and Serrano peppers grown, harvested or packed in
Mexico.” See Salmonella Saintpaul Out-
break, FDA, http://www.fda.gov/NewsEvents/PublicHealt
hFocus/ucm179116.htm (last visited Aug. 14, 2015).