Seaside Farm, Inc. v. United States

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 15-2562
SEASIDE FARM, INC.,
Plaintiff - Appellant,
v.
UNITED STATES OF AMERICA,
Defendant - Appellee.
Appeal from the United States District Court for the District of
South Carolina, at Beaufort. C. Weston Houck, Senior District
Judge. (9:11-cv-01199-CWH)
Argued: October 26, 2016 Decided: December 2, 2016
Before WILKINSON, NIEMEYER, and SHEDD, Circuit Judges.
Affirmed by published opinion. Judge Wilkinson wrote the
opinion, in which Judge Niemeyer and Judge Shedd joined.
ARGUED: Daniel A. Speights, SPEIGHTS & RUNYAN, Hampton, South
Carolina, for Appellant. Michael Shih, UNITED STATES DEPARTMENT
OF JUSTICE, Washington, D.C., for Appellee. ON BRIEF: A. G.
Solomons, III, SPEIGHTS & RUNYAN, Hampton, South Carolina, for
Appellant. William B. Schultz, General Counsel, Daretia M.
Hawkins, Senior Attorney, UNITED STATES DEPARTMENT OF HEALTH AND
HUMAN SERVICES, Washington, D.C.; Elizabeth H. Dickinson, Chief
Counsel, Michael Shane, Associate Chief Counsel for Enforcement,
UNITED STATES FOOD AND DRUG ADMINISTRATION, Washington, D.C.;
Benjamin C. Mizer, Principal Deputy Assistant Attorney General,
Mark B. Stern, UNITED STATES DEPARTMENT OF JUSTICE, Washington,
D.C.; William N. Nettles, United States Attorney, Barbara
Bowens, Assistant United States Attorney, OFFICE OF THE UNITED
STATES ATTORNEY, Columbia, South Carolina, for Appellee.
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WILKINSON, Circuit Judge:
This case involves a Federal Tort Claims Act (“FTCA”),
28 U.S.C. §§ 1346(b), 2671-2680, suit by a tomato farmer against
the United States. Seaside Farm, Inc., alleges that the Food and
Drug Administration negligently issued a contamination warning
in response to an outbreak of Salmonella Saintpaul that devalued
Seaside’s crop by $15,036,293.95. The district court held that
FDA was exercising a discretionary function in connection with
the contamination warning and dismissed the case under 28 U.S.C.
§ 2680(a). That ruling was essential to protect FDA’s vital role
in safeguarding the public food supply, and we affirm the
judgment.
I.
Salmonella Saintpaul is a rare strain of bacteria that
causes moderate-to-severe illness in humans. Symptoms include
fever, diarrhea, nausea, and abdominal pain. Salmonella can also
enter the bloodstream and cause more serious health
complications, including death. FDA consequently considers
salmonella a “serious health concern.” 74 Fed. Reg. 33,030,
33,031 (July 9, 2009).
A.
On May 22, 2008, the New Mexico Department of Health
notified the Centers for Disease Control and Prevention that a
number of local residents had been infected with Salmonella
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Saintpaul. Similar reports soon arrived at CDC from Texas. After
interviewing patients, CDC discovered a “strong statistical
association” between the infections and eating raw tomatoes.
J.A. 713. This observation was supported by a “historical
association” between salmonella and tomatoes generally.
J.A. 432. CDC subsequently notified FDA that tomatoes were the
“leading hypothosis” for the source of the outbreak. J.A. 660.
By June 1, 2008, CDC was investigating 87 incidents of
Salmonella Saintpaul across nine states. J.A. 147. FDA,
including its various component parts such as the Center for
Food Safety and Applied Nutrition, decided to issue an initial
contamination warning to consumers in New Mexico and Texas. The
contamination warning informed consumers that the outbreak was
likely associated with tomatoes, but acknowledged that the exact
type and the origin of the contaminated tomatoes was unknown.
By June 6, 2008, reports of Salmonella Saintpaul had risen
to 145 incidents and 23 hospitalizations across sixteen states.
J.A. 149. CDC notified FDA that the outbreak threatened the
entire country.
On June 7, 2008, FDA issued an updated contamination
warning titled, “FDA Warns Consumers Nationwide Not to Eat
Certain Types of Raw Red Tomatoes.” J.A. 149. The contamination
warning explained the nature of Salmonella Saintpaul and
specified certain types of tomato as the likely vehicles for the
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bacteria. It also provided a list of countries and seven states,
including South Carolina, whose tomatoes remained unassociated
with the outbreak. The media, however, reported the
contamination warning without mentioning that some tomatoes were
not implicated. FDA officials also stressed the magnitude and
national scope of the outbreak but likewise failed to mention
any “safe” tomatoes.
Over the next month, CDC accumulated enough data to trace
Salmonella Saintpaul to jalapeño and serrano peppers imported
from Mexico. FDA withdrew the contamination warning as a result
and announced that fresh tomatoes were no longer associated with
the outbreak. At that point in time, Salmonella Saintpaul was
linked to 1,220 infections across forty-two states and the
District of Columbia. J.A. 150.
B.
Seaside harvested a crop of tomatoes in South Carolina
while the Salmonella Saintpaul contamination warning was in
effect. On May 18, 2011, Seaside brought suit against the United
States under the FTCA alleging that FDA negligently issued the
contamination warning and impaired the value of Seaside’s crop
by $15,036,293.95. The government claimed that the suit was
barred by the FTCA provision protecting the government’s
exercise of discretionary functions, see 28 U.S.C. § 2680(a),
and moved to dismiss the case. The district court denied the
5
motion as premature and ordered limited jurisdictional
discovery, giving Seaside the opportunity to establish some
nondiscretionary duty that FDA may have breached.
A three-year discovery fight ensued. The parties frequently
disagreed over the scope of authorized inquiry, although the
government ultimately produced over 12,000 pages of unredacted
FDA guidance manuals, internal deliberations, daily situation
reports, and confidential emails relevant to the Salmonella
Saintpaul outbreak. Seaside also had the opportunity to take
multiple depositions of CDC or FDA employees. Finally, the
government provided an additional 13,000 pages of discovery
material that was generated in a related case.
On December 15, 2015, the district court dismissed the case
for lack of subject matter jurisdiction. The district court
reasoned that FDA had broad discretion to warn the public about
a contaminated food supply, and that Seaside failed to allege
any statute, regulation, or policy that required FDA to proceed
in a particular manner. The district court also acknowledged
that contamination warnings implicate competing policy
considerations of protecting the public from serious health
risks and minimizing any adverse economic impact on associated
industries. Seaside appeals.
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II.
The FTCA provides a limited waiver of sovereign immunity
for civil actions against the United States. 28 U.S.C.
§§ 1346(b)(1), 2674. This waiver extends to certain claims
resulting from “the negligent or wrongful act or omission of any
employee of the Government while acting within the scope of his
office or employment.” Id. § 1346(b)(1). The discretionary
function exception, however, preserves sovereign immunity and
insulates the government from liability for “the exercise or
performance [of] a discretionary function or duty on the part of
a federal agency or an employee of the Government, whether or
not the discretion involved be abused.” Id. § 2680(a). FTCA
plaintiffs have the burden of showing that the discretionary
function exception does not foreclose their claim. Welch v.
United States, 409 F.3d 646, 651 (4th Cir. 2005); Williams v.
United States, 50 F.3d 299, 304 (4th Cir. 1995).
The discretionary function exception represents “the
boundary between Congress’ willingness to impose tort liability
upon the United States and its desire to protect certain
governmental activities from exposure to suit by private
individuals.” United States v. S.A. Empresa de Viacao Aerea Rio
Grandense (Varig Airlines), 467 U.S. 797, 808 (1984). It was
meant to “protect the government from liability that would
seriously handicap efficient government operations.” Id. at 814
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(quoting United States v. Muniz, 374 U.S. 150, 163 (1963)).
Congress also wanted to “prevent judicial ‘second-guessing’ of
legislative and administrative decisions grounded in social,
economic, and political policy through the medium of an action
in tort.” Id. Consequently, federal courts lack jurisdiction
over claims falling within the discretionary function exception.
Holbrook v. United States, 673 F.3d 341, 345 (4th Cir. 2012);
Williams, 50 F.3d at 304-05.
III.
Seaside contends the district court improperly concluded
that the discretionary function exception barred its claim.
Seaside also argues that it did not receive adequate discovery
before the case was dismissed, and faults the district court for
improperly limiting the scope of inquiry to jurisdictional
issues. We shall discuss each contention in turn.
A.
Government conduct is protected by the discretionary
function exception if it “involves an element of judgment or
choice,” and implicates “considerations of public policy.”
Berkovitz v. United States, 486 U.S. 531, 536-37 (1988); see
United States v. Gaubert, 499 U.S. 315, 322-25 (1991); Varig
Airlines, 467 U.S. at 813-14; Dalehite v. United States, 346
U.S. 15, 32-36 (1953). We begin by asking whether any “federal
statute, regulation, or policy specifically prescribes a course
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of action.” Berkovitz, 486 U.S. at 536. If not, we consider
generally “the nature of the actions taken and . . . whether
they are susceptible to policy analysis.” Gaubert, 499 U.S. at
325. The relevant inquiry is whether the decision “in an
objective, or general sense, . . . is one which we would expect
inherently to be grounded in considerations of policy.” Baum v.
United States, 986 F.2d 716, 721 (4th Cir. 1993). We do not
examine, therefore, “whether policy considerations were actually
contemplated in making [the] decision.” Smith v. Washington
Metro. Area Transit Authority, 290 F.3d 201, 208 (4th Cir. 2002)
(emphasis in original). In fact, if a statute or regulation
permits discretion, “it must be presumed that [decisions] are
grounded in policy when exercising that discretion.” Holbrook,
673 F.3d at 345 (quoting Gaubert, 499 U.S. at 324).
The Federal Food, Drug and Cosmetic Act (“FDCA”), 21 U.S.C.
§ 301 et seq., provides that FDA may “cause to be disseminated
information regarding food . . . in situations involving, in the
opinion of the [Commissioner], imminent danger to health or
gross deception of the consumer.” Id. § 375(b) (emphasis added).
A notice in the Federal Register emphasizes that “FDA's implicit
or explicit authority to disseminate information under [21
U.S.C. § 375(b)] is not accompanied by any procedural
requirements.” 50 Fed. Reg. 43,060, 43,063 (Oct 23, 1985). The
FDCA plainly delegates broad discretion, and we presume FDA is
9
firmly grounded in considerations of public policy when acting
pursuant to that discretion.
Seaside argues in response that various FDA guidance
manuals eliminate this discretion and prescribe some mandatory
course of action. Seaside points to provisions that establish
standard operating procedures, contamination warning protocols,
“essential steps,” and major considerations for emergency
response activities.
It would be the rare guidance manual that did not contain
some arguably mandatory language. It is our duty, however, to
construe the nature of the statutory and regulatory regime as a
whole. Indeed, “[t]he price of circulating internal guidance
should not be an exponential increase in exposure to a tort
suit.” Holbrook, 673 F.3d at 347. It is questionable, moreover,
whether something as informal as a guidance manual can overcome
a statutory consignment of agency discretion. But even if we
were to so assume, it would not aid appellant’s case. For after
reviewing the FDA guidance manuals, we still find the agency
possesses significant discretion.
The FDA Emergency Response Plan, for example, begins with a
qualification that “the nature and severity of an
emergency . . . will determine . . . the specific actions . . .
for each emergency.” J.A. 923. It continues to explain that “the
exact activities performed . . . will vary by the type and
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severity of the emergency,” J.A. 925, and that any given plan
may “require[] significant adjustments during an incident,”
J.A. 926 (emphasis added). There is even an express disclaimer:
“[T]hese identified steps do not comprise the entire scope of
the FDA emergency response. Emergencies are unpredictable and
dynamic; therefore, the Agency’s strategy, while containing core
activities, must be unique to each situation.” 1 J.A. 925-26.
Remaining provisions then speak in broad terms of what FDA “may”
or “should” do, subject to the overarching nature of the
emergency. See Fortney v. United States, 714 F. Supp. 207, 208
(W.D.Va. 1989) (holding that “should” is indicative of
discretion), aff’d, 912 F.2d 722 (4th Cir. 1990). The FDA
Emergency Response Plan thus envisions a fluid combination of
variable responses and “real-time determination of the necessary
course of action.” J.A. 926.
The policy considerations inherent in a contamination
warning are also evident. The FDCA expressly directs FDA to
1 The core activities that comprise the FDA Emergency
Response Plan, such as “Performing Initial and On-Going
Planning,” are all described at a high level of generality.
J.A. 926. But a general directive that does not “specifically
prescribe[] a course of action” likewise does not operate to
restrict the exercise of agency discretion. Berkovitz, 486 U.S.
at 536. Furthermore, “[t]he existence of some mandatory language
does not eliminate discretion when the broader goals sought to
be achieved necessarily involve an element of discretion.”
Holbrook, 673 F.3d at 348 (quoting Miller v. United States, 163
F.3d 591, 595 (9th Cir. 1998)).
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“protect the public health by ensuring that foods are safe,
wholesome, [and] sanitary.” 21 U.S.C. § 393(b)(2)(A); see
Gaubert, 499 U.S. at 324 (“It will most often be true that the
general aims and policies of the controlling statute will be
evident from its text.”). As the district court rightly noted,
decisions regarding contamination warnings are “grounded in the
policy of protecting the public from a health risk, and reducing
adverse economic impact.” J.A. 1077. Discretion is necessary to
evaluate available information, assess the sufficiency and
reliability of evidence, resolve conflicting data, determine the
overall nature of a health threat, and ultimately settle on a
course of action. Both the timing and content of a contamination
warning reflect this analysis. See Fisher Bros. Sales, Inc. v.
United States, 46 F.3d 279 (3d Cir. 1995) (en banc). Acting too
soon or waiting too late each entail profound potential
consequences.
Seaside insists that there remains a genuine dispute as to
whether the government ultimately executed its decision in a
reasonable manner. Seaside complains that the contamination
warning was overly broad, based on insufficient evidence, and
wholly inadequate to notify consumers that South Carolina
tomatoes remained safe for consumption. Seaside then emphasizes
that no tomato in the United States ever tested positive for
Salmonella Saintpaul, and that FDA actually neglected to test
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sample tomatoes before issuing the contamination warning.
Finally, Seaside asserts that, despite considerable evidence
linking the outbreak to Mexico when the contamination warning
was issued, FDA omitted that information without a defensible
justification. Seaside suggests this decision was made for
impermissible “political” reasons beyond the scope of FDA’s
discretion. Reply Br. of Appellant at 20.
Unfortunately, Seaside misunderstands the nature of the
discretionary function inquiry. The decision to issue a
contamination warning, especially in the middle of an escalating
salmonella outbreak, clearly implicates the policy
considerations which FDA was established to weigh. The FDCA even
contemplates considerations regarding our commercial
relationship with foreign countries. See 21 U.S.C. § 393(b)(3).
Seaside fails to identify any mandatory requirements governing
FDA’s decision, including any directive to test sample tomatoes
before issuing the contamination warning. Not only is the FDA
Emergency Response Plan phrased in permissive terms, but it
envisions “[i]nvestigative, laboratory, and technical/scientific
staff” pursuing multiple avenues of obtaining information.
J.A. 929. These would encompass, inter alia, such things as
gathering field reports from state agencies, healthcare
providers, and affected patients, to employing FDA’s bank of
pre-existing scientific knowledge about the association between
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certain foods and food-borne illnesses. Whether the agency
pursued its investigation, interpreted relevant evidence, or
balanced policy considerations in what Seaside believes to be an
optimal manner does not affect the discretionary function
analysis. Seaside essentially invites us to engage in the very
judicial second guessing that the discretionary function
exception forbids.
We therefore conclude that the decision to issue a
contamination warning “involves an element of judgment or
choice,” that implicates “considerations of public policy.”
Berkovitz, 486 U.S. at 536-37. The government rightly observes
that contamination warnings -– in both timing and content -- are
a prototypical discretionary function. 2
B.
Seaside next contends it was not allowed sufficient
discovery. District courts exercise broad discretion over
discovery issues. Carefirst of Md., Inc. v. Carefirst Pregnancy
Ctrs., Inc., 334 F.3d 390, 402-03 (4th Cir. 2003). A party is
not entitled to discovery that would be futile or otherwise
inadequate to establish a sufficient basis for jurisdiction. See
Rich v. United States, 811 F.3d 140, 146 (4th Cir. 2015).
2In view of our ruling on the discretionary function
exception, we have no need to address the government’s
contention that the contract rights exception to the FTCA
likewise forecloses Seaside’s claim. See 28 U.S.C. § 2680(h).
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The district court was correct to recognize that the
discretionary function exception is a jurisdictional threshold
that must be considered before moving to the merits of an FTCA
claim. Williams, 50 F.3d at 308; Smith, 290 F.3d at 211. The
district court was thus well within its discretion to limit
discovery to this dispositive issue. Rich, 811 F.3d at 146.
Indeed, unlike in Rich, policy would be inevitably implicated in
the issuance of the contamination warning and in drafting its
contents. See id. at 147. Other circuits considering the
discretionary function exception agree –– if they even allow
discovery at all. See, e.g., Gonzalez v. United States, 814 F.3d
1022, 1031-32 (9th Cir. 2016) (refusing discovery because
available agency guidelines established discretion); Baer v.
United States, 722 F.3d 168, 176-77 (3d Cir. 2013) (refusing
discovery because available agency guidelines did not foreclose
discretion); Davila v. United States, 713 F.3d 248, 263-64 (5th
Cir. 2013) (refusing discovery because the plaintiff failed to
allege any “well-pleaded facts or evidence to refute the
government's assertion . . . that no [nondiscretionary] policy
exists”); Ignatiev v. United States, 238 F.3d 464, 467 (D.C.
Cir. 2001) (remanding for limited jurisdictional discovery); In
re Orthopedic Bone Screw Prod. Liability Litig., 264 F.3d 344,
365 (3d Cir. 2001), as amended (Oct. 10, 2001) (upholding
limited jurisdictional discovery).
15
In any event, Seaside had three years of discovery. The
government produced over 25,000 pages of material relevant to
FDA practices and the Salmonella Saintpaul outbreak. Seaside
also had the opportunity to take multiple depositions of CDC or
FDA employees. This was more than adequate to determine whether
FDA had some nondiscretionary duty or otherwise exercised
discretion that was not susceptible to policy analysis. While
Seaside expresses frustration at its inability to obtain
additional information relevant to whether the contamination
warning was justified, that issue is separate and distinct from
the question of jurisdiction and the discretionary function
exception.
Relying on Kerns v. United States, 585 F.3d 187 (4th Cir.
2009), Seaside insists that the facts necessary to determine
jurisdiction are “inextricably intertwined” with the merits of
the case and thus additional discovery was still necessary. See
id. at 195. We disagree. Kerns, in fact, acknowledged that the
discretionary function exception is a threshold issue that can
be “wholly unrelated to the basis for liability under the FTCA.”
Id. at 196. So it is here. Whether FDA was negligent is an
entirely different question from whether FDA was given the
discretion to draft and issue a contamination warning, and
whether exercising that discretion implicates policy
considerations. While we do not suggest the agency’s attempt to
16
warn the public of a major unfolding health crisis represented
an abuse of the discretion entrusted to it, the discretionary
function exception applies “whether or not the discretion
involved be abused.” 28 U.S.C. § 2680(a); see Gaubert, 499 U.S.
at 322-25; Holbrook, 673 F.3d at 349-50.
The value of any kind of immunity, applied here as a
jurisdictional bar, declines as litigation proceeds. See
Mitchell v. Forsyth, 472 U.S. 511, 525-27 (1985) (explaining
that qualified immunity in 42 U.S.C. § 1983 litigation “is in
part an entitlement not to be forced to litigate the
consequences of official conduct” and “even such pretrial
matters as discovery are to be avoided if possible, as
‘[i]nquiries of this kind can be peculiarly disruptive of
effective government’” (quoting Harlow v. Fitzgerald, 457 U.S.
800, 817 (1982)). Exposing FDA to extensive rounds of discovery
on the merits would undermine the discretionary function
exception and introduce the very litigation pressures Congress
clearly meant to avoid. See Wu Tien Li-Shou v. United States,
777 F.3d 175, 186 (4th Cir. 2015); Holbrook, 673 F.3d at 349-50;
cf. Harlow, 457 U.S. at 818 (“Until this threshold [42 U.S.C.
§ 1983] immunity question is resolved, discovery should not be
allowed.”). The district court was thus well within its
discretion to order discovery in the manner that it did.
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IV.
We refuse to place FDA between a rock and a hard place. On
the one hand, if FDA issued a contamination warning that was
even arguably overbroad, premature, or of anything less than
perfect accuracy, injured companies would plague the agency with
lawsuits. On the other hand, delay in issuing a contamination
warning would lead to massive tort liability with respect to
consumers who suffer serious or even fatal consequences that a
timely warning might have averted. All this would loom if
contamination warnings were not protected by the discretionary
function exception.
Every public health emergency is different. There is no
boilerplate warning that can account for the unknown variables
of a pathogenic outbreak. There is little room for leisured
hindsight when the decision is one that must be made under the
pressure of events and, in many cases, on the basis of imperfect
information. After three years of discovery, Seaside failed to
identify any mandatory duty that FDA may have breached, or any
discretionary decision that was not firmly rooted in the very
policy considerations that FDA was intended to exercise. While
we acknowledge and regret any financial loss Seaside may have
incurred as a result of the Salmonella Saintpaul contamination
warning, allowing Seaside’s claim to proceed would allow the law
18
of tort to distort one of the most critical of governmental
functions, that of safeguarding the public health and welfare.
The judgment is accordingly affirmed.
AFFIRMED
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