Torbeck v. Zoon

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
VICTOR H. TORBECK; WBI
ENTERPRISES, INCORPORATED, formerly
known as Worldwide Biologicals,
Incorporated; NASHVILLE
BIOLOGICALS, INCORPORATED,
Plaintiffs-Appellants,
No. 96-1962
v.
KATHRYN ZOON, Ph.D.; THOMAS S.
BOZZO; GARY DYKSTRA; RONALD
CHESEMORE; GERALD V. QUINNAN;
DAVID KESSLER,
Defendants-Appellees.
Appeal from the United States District Court
for the District of Maryland, at Baltimore.
Alexander Williams, Jr., District Judge.
(CA-95-1761-AW)
Argued: May 7, 1997
Decided: August 29, 1997
Before WILKINSON, Chief Judge, MICHAEL, Circuit Judge,
and COPENHAVER, United States District Judge for the
Southern District of West Virginia, sitting by designation.
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Affirmed by unpublished per curiam opinion.
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COUNSEL
ARGUED: Philip Clyde Kimball, Louisville, Kentucky, for Appel-
lants. Paige Elizabeth Harrison, Associate Chief Counsel for Enforce-
ment, FOOD AND DRUG ADMINISTRATION, Rockville,
Maryland, for Appellees. ON BRIEF: Lynne A. Battaglia, United
States Attorney, Allen F. Loucks, Assistant United States Attorney,
Baltimore, Maryland, for Appellees.
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Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
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OPINION
PER CURIAM:
Plaintiffs-Appellants Victor Torbeck, Nashville Biologicals, Inc.
(NBI), and Worldwide Biologicals, Inc. (WBI) brought an action
against six current and former employees of the United States Food
and Drug Administration (FDA), seeking compensatory and punitive
damages for an alleged deprivation of their rights under the Fifth
Amendment's Due Process Clause. The district court determined that
the plaintiffs' complaint did not allege a violation of clearly estab-
lished rights and dismissed the action on the grounds of qualified
immunity. We affirm.
I.
NBI and WBI are corporations which engaged in the business of
collecting, storing, selling, and distributing human plasma and other
blood products. Torbeck was the Chief Executive Officer of these
companies as well as one of two shareholders. Defendants are all offi-
cers of the FDA, the agency in charge of regulating and licensing
plasma distributors. The complaint alleges that on May 5, 1992, one
of the defendants notified WBI that the WBI plasmapheresis center
in Fayetteville, North Carolina, had failed to pass an inspection and
would not be allowed to continue operating. Torbeck sent a letter on
May 21 requesting an abeyance of the suspension, but this request
was denied in a letter from defendant Kathryn Zoon, a director at the
FDA. According to the complaint, Zoon said that WBI would have its
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license permanently revoked but would have an opportunity to contest
this decision at a hearing. Plaintiffs claim to have requested both a
hearing and information regarding the revocation. However, the FDA
did not provide any of the information requested and did not schedule
a hearing. On March 22, 1993, the FDA announced an opportunity for
a hearing in the Federal Register but did not specify a date. See 58
Fed. Reg. 15351-53 (1993).
On April 29, 1994, Torbeck entered into a plea agreement for three
counts of violating the Federal Food, Drug, and Cosmetic Act, 21
U.S.C. § 301 et seq., and one count of making a false statement in
violation of 18 U.S.C. § 1001. As part of the agreement, Torbeck
agreed to the revocation of the WBI Fayetteville Center license.1
Concurrently with its investigation of WBI's Fayetteville Center,
the FDA was also investigating NBI's plasmapheresis center located
in Nashville, Tennessee. On September 30, 1992, the FDA suspended
the Nashville Center's license to operate. Torbeck requested an abey-
ance of the suspension, which was denied. On October 5, 1992, Tor-
beck requested in a letter to the FDA that the license be revoked
without a hearing.
Plaintiffs brought this action, pursuant to Bivens v. Six Unknown
Named Agents of the Fed. Bureau of Narcotics, 403 U.S. 388 (1971),
alleging that defendants had violated plaintiffs' constitutional rights
under the Fifth Amendment's Due Process Clause by failing to pro-
vide a hearing either before or promptly after the suspension of the
licenses. Defendants moved to dismiss under Fed. R. Civ. P. 12(b)(6),
asserting that they had qualified immunity from the suit. The district
court agreed and dismissed the action.
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1 The complaint did not discuss the plea agreement; it said nothing
about whether or how the WBI Fayetteville Center's license was ulti-
mately revoked. At oral argument before the district court, however,
plaintiffs acknowledged the plea agreement, and in their brief to this
court they discuss the agreement in their Statement of Facts. See Brief
for Appellants at 8.
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II.
Plaintiffs claim that defendants violated their rights under the Due
Process Clause by failing to provide the following: (a) a hearing prior
to the suspension of the licenses, (b) a hearing promptly after the sus-
pension of the WBI Fayetteville Center license, and (c) a hearing
promptly after the suspension of the NBI Nashville Center license.
We examine these claims in turn.
A.
In their complaint plaintiffs assert that defendants violated the Due
Process Clause by "not provid[ing] Plaintiffs with any meaningful
opportunity to be heard before shutting down the Fayetteville Center
and the Nashville Center." J.A. 24. However, plaintiffs conceded
before the district court that they had no right to a pre-suspension
hearing. J.A. 47. Plaintiffs cannot revive that argument here. In any
event, there are public health justifications for allowing FDA suspen-
sions to take effect immediately. See, e.g., Ewing v. Mytinger & Cas-
selberry, Inc., 339 U.S. 594, 598-600 (1950) (upholding seizures of
misbranded articles under the Food, Drug & Cosmetics Act); North
Am. Cold Storage Co. v. City of Chicago, 211 U.S. 306, 315-21
(1908) (upholding government authority to seize and destroy poten-
tially infected food).
B.
Plaintiffs claim that defendants violated their right to due process
by not providing a hearing within two years after the suspension of
the WBI Fayetteville Center license. The license was suspended on
May 5, 1992, and the FDA did not provide a hearing on that suspen-
sion within the next two years. On April 29, 1994, Torbeck voluntar-
ily agreed to rescind the license as part of a plea agreement.
Although we generally would have concerns about the constitution-
ality of a two-year delay in granting a post-suspension hearing for a
license to operate a business, we do not find that the district court
erred in granting the defendants qualified immunity. Defendants are
only liable for the violation of "clearly established statutory or consti-
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tutional rights of which a reasonable person would have known."
Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982). The due process
right to a prompt hearing carries no hard deadlines. See, e.g., Ritter
v. Cohen, 797 F.2d 119, 124 (3d Cir. 1986) ("[N]o fixed rule governs
the time in which a post-termination appeal must be decided."); Kelly
v. Railroad Retirement Bd., 625 F.2d 486, 490 (3d Cir. 1980)
("[T]here is no magic length of time after which due process require-
ments are violated."). The Supreme Court uses a three-factor balanc-
ing test for determining how long an agency can delay in affording
a post-suspension hearing and decision. See, e.g., Federal Deposit
Ins. Corp. v. Mallen, 486 U.S. 230, 242 (1988). We have recognized
that when the inquiry into the protections afforded by a constitutional
right "requires a ``particularized balancing' that is subtle, difficult to
apply, and not yet well defined," those protections will "only infre-
quently . . . be ``clearly established.'" DiMeglio v. Haines, 45 F.3d
790, 806 (4th Cir. 1995) (discussing constitutional protections
afforded to public employee speech).
Moreover, this case is unique in that plaintiffs did not continue to
contest the validity of the FDA's suspension after the two-year delay.
Instead, Torbeck voluntarily rescinded the license as part of a plea
bargain on criminal charges. Plaintiffs cannot now contend that the
license was improperly revoked when the license was voluntarily
rescinded as part of a bargain with the government. Cf. Vennes v. An
Unknown Number of Unidentified Agents, 26 F.3d 1448, 1452 (8th
Cir. 1994) ("By pleading guilty, [plaintiff] elected to forego the post-
deprivation process best suited to determining whether the agents in
fact violated his due process rights -- the criminal trial."). In order
to contest the validity of the suspension, plaintiffs needed to continue
their administrative appeal until the agency reached a decision. Plain-
tiffs' failure to exhaust the avenues of administrative relief has
waived their claim that the license was improperly revoked. Cf. Rana
v. United States, 812 F.2d 887, 890 (4th Cir. 1987) ("When an argu-
ment concerns procedural rights within the purview of agency exper-
tise, and a plaintiff fails to raise the argument before the agency,
courts will entertain the argument on appeal only if it is ``jurisdic-
tional' or if there are compelling reasons for its novelty."). Plaintiffs
conceded this point at oral argument.2
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2 We are not saying that plaintiffs needed to exhaust their administra-
tive remedies before bringing the current action, since the basis of plain-
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With these circumstances in mind we examine the underlying mer-
its of plaintiffs' claim. The three factors used by the Court in Mallen
for determining the constitutionality of a delay in a post-suspension
hearing are: "the importance of the private interest and the harm to
this interest occasioned by the delay; the justification offered by the
government for delay and its relations to the underlying governmental
interest; and the likelihood that the interim decision may have been
mistaken." Mallen, 486 U.S. at 242. As to the first Mallen factor, a
business whose license is suspended is not seriously harmed by a
delayed hearing if the validity of the suspension is not contested. We
agree with the district court that, since the license was "voluntarily
surrender[ed]," the delay in reaching a final determination was "harm-
less, at best." J.A. 51. As to the second factor, the government had an
interest in pursuing the possibility of a plea bargain before it granted
a hearing. A plea bargain is an opportunity to reach a mutually
acceptable compromise, and it also conserves government resources.
Finally, as to the third factor, we must consider the government's
decision to suspend the license to be correct, since Torbeck's agree-
ment to surrender the license waived the plaintiffs' claim to the con-
trary.
Thus, in looking at all the factors, we cannot conclude that the
defendants violated any clearly established constitutional rights.
Although we have concerns about the length of the delay in this case,
we believe that the special circumstances surrounding the surrender
of the license offer significant justification for that delay. Cf. Mallen,
486 U.S. at 242 ("For even though there is a point at which an unjusti-
fied delay in completing a post-deprivation hearing``would become a
constitutional violation,' the significance of such a delay cannot be
evaluated in a vacuum." (citations omitted)). Under all the circum-
stances here, we conclude that the defendants are entitled to qualified
immunity.
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tiffs' claim is that there was "an unreasonable or indefinite timeframe for
administrative action." McCarthy v. Madigan , 503 U.S. 140, 147 (1992).
However, plaintiffs should not have voluntarily rescinded the license if
they wished to challenge the validity of the suspension along with the
constitutionality of the delay. As their action now stands, plaintiffs can
challenge the delay in providing a hearing, but they cannot contend that
the original suspension or eventual revocation was unjustified.
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C.
Plaintiffs also contend that the defendants violated their right to a
post-suspension hearing for the NBI Nashville Center license. The
FDA suspended the license on September 30, 1992. On October 5,
1992, a mere five days later, Torbeck wrote a letter to the FDA agree-
ing to the revocation of the license. Plaintiffs certainly had no "clearly
established" due process right to a hearing within five days of the sus-
pension of the license. Plaintiffs claim that they were given "no other
choice" but to surrender their license "[b]ecause [the FDA] had
informed Victor Torbeck that NBI had no right to request an abey-
ance of the revocation of the subject licenses, and because Defendants
had denied WBI a hearing regarding the suspension and revocation of
the licenses pertaining to the Fayetteville Center." J.A. 22, 23. Even
if plaintiffs feared that the hearing would be delayed, however, they
were under no compulsion to voluntarily agree to the revocation of
the license. The actions of defendants (essentially, accepting the sur-
render of the license after five days) did not violate any clearly estab-
lished rights of the plaintiffs.
III.
We hold that the district court properly granted qualified immunity
to the defendants against the plaintiffs' due process claims. We there-
fore affirm the district court's dismissal of the plaintiffs' complaint
without leave to amend.
AFFIRMED
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