Lone Star Bakery, Inc. v. United States

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
November 17, 2009
No. 09-50374 Charles R. Fulbruge III
Summary Calendar Clerk
LONE STAR BAKERY, INC.,
Plaintiff - Appellant
v.
UNITED STATES OF AMERICA,
Defendant - Appellee
Appeal from the United States District Court
for the Western District of Texas
No. 5:05-CV-11
Before KING, STEWART, and HAYNES, Circuit Judges.
PER CURIAM:*
Lone Star Bakery brought a negligence claim against the government
under the Federal Tort Claims Act, alleging that Food and Drug Administration
agents negligently caused an erroneous report of dangerous bacteria in its
products. The district court granted summary judgment to the government,
finding that Lone Star had failed to raise fact issues on the elements of duty and
*
Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
No. 09-50374
causation. Because we agree that Lone Star has failed to raise a fact issue on
causation, we affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
Lone Star Bakery, Inc., is a commercial baker that makes biscuits at a
plant in China Grove, Texas. Until 2002, Lone Star had sold biscuits to
Southland Corporation, the owner of 7-Eleven convenience stores. Under that
arrangement, Lone Star delivered biscuits to Phoenix, Arizona, where
MarketFare Foods, Inc., assembled them into completed sandwiches for delivery
to convenience stores; MarketFare purchased other ingredients, such as egg and
cheese, from different vendors. The termination of Lone Star’s arrangement
with Southland prompted the lawsuit at issue.
On March 1, 2002, the Florida Department of Agriculture and Consumer
Services received a consumer complaint of gastrointestinal distress. The
complaint alleged that the stomachache was caused by consumption of a
sausage, egg, and cheese biscuit sandwich purchased from a convenience store
in Daytona Beach, Florida. An inspector collected five sample sandwiches from
the store, two of which tested positive for Listeria monocytogenes, a harmful and
potentially fatal bacterium. The Florida agency alerted MarketFare and the
United States Food and Drug Administration (FDA).
The FDA began its investigation at MarketFare’s Phoenix assembly plant.
Two inspectors collected the individual components and shipped them to an FDA
laboratory in California. There, the individual components were tested. On
April 5, 2002, a representative from the FDA informed MarketFare that the
biscuit component and the finished sandwich had both tested presumptive
positive for Listeria monocytogenes. That same day, MarketFare issued a recall
of the sandwiches, and Southland terminated its business relationship with Lone
Star.
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No. 09-50374
On April 9, the FDA conducted an inspection at Lone Star’s China Grove
plant. FDA workers observed perforations in the plastic packaging used to seal
the biscuits before they were shipped to MarketFare. Lone Star was informed
on April 25 that the facility and biscuits tested negative for Listeria
monocytogenes; a written report to this effect was issued on April 30. During
this time, the FDA did not order a recall of any Lone Star biscuits.
Lone Star filed an administrative claim with the FDA on August 1, 2003,
claiming over $2.9 million in damages. After waiting the requisite six months
under 28 U.S.C. § 2675(a), Lone Star filed suit in federal district court under the
Federal Tort Claims Act, 28 U.S.C. §§ 2671 et seq. Lone Star’s amended
complaint alleged that the FDA was negligent in its collection, testing, and
reporting of the biscuit samples manufactured by Lone Star.
The government moved to dismiss Lone Star’s complaint under Federal
Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief
could be granted. Lone Star filed a memorandum in opposition to the motion
and attached a partial transcript of the deposition testimony of Bruce Benware,
one of the FDA representatives who collected sandwich components at
MarketFare’s Phoenix plant. The government filed a reply, attaching the
reports of both parties’ experts. Because matters outside the pleadings were
presented, the district court treated the government’s motion as one for
summary judgment under Rule 56. See F ED. R. C IV. P. 12(d). The district court
granted the government’s motion, holding that Lone Star had neither
established that the FDA owed it a duty under Texas law nor raised a fact issue
on whether the FDA proximately caused Lone Star’s claimed damages. Lone
Star now appeals.
II. STANDARD OF REVIEW
“We review a grant of summary judgment de novo, applying the same
standards as the district court.” Frakes v. Crete Carrier Corp., 579 F.3d 426, 429
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No. 09-50374
(5th Cir. 2009). Summary judgment is appropriate when “the pleadings, the
discovery and disclosure materials on file, and any affidavits show that there is
no genuine issue as to any material fact and that the movant is entitled to
judgment as a matter of law.” F ED. R. C IV. P. 56(c). Summary judgment is
proper only if no reasonable jury could return a verdict for the nonmoving party.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Where the nonmoving
party bears the burden of proof at trial on a dispositive issue, he or she must go
beyond the pleadings and designate specific facts showing a genuine issue for
trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). Factual controversies
are resolved in favor of the nonmoving party, but factual controversies require
more than conclusory allegations, unsubstantiated assertions, or a mere scintilla
of evidence. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).
III. DISCUSSION
The Federal Tort Claims Act, 28 U.S.C. §§ 2671 et seq., abrogates the
United States’ sovereign immunity for compensatory damages arising out of
claims for
injury or loss of property . . . caused by the negligent or wrongful act
or omission of any employee of the Government while acting within
the scope of his office or employment, under circumstances where
the United States, if a private person, would be liable to the
claimant in accordance with the law of the place where the act or
omission occurred.
28 U.S.C. § 1346(b)(1); see Johnson v. Sawyer, 47 F.3d 716, 727 (5th Cir. 1995)
(en banc). The parties agree, and we will assume for purposes of this appeal,
that Texas law governs this dispute.1
In Texas, the elements of negligence “are the existence of a legal duty, a
breach of that duty, and damages proximately caused by the breach.” IHS
1
We note that Lone Star’s claims of negligence relate to biscuits the FDA collected in
Arizona and tested in California.
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No. 09-50374
Cedars Treatment Ctr. of DeSoto, Tex., Inc. v. Mason, 143 S.W.3d 794, 798 (Tex.
2004). “The two elements of proximate cause are cause in fact (or substantial
factor) and foreseeability.” Id. The district court concluded that Lone Star had
failed to establish the duty of care a private laboratory in these circumstances
would owe under Texas law. It further found that Lone Star had failed to
present any evidence that the FDA proximately caused its financial loss.
Because we find the causation issue dispositive, we do not address the district
court’s conclusion regarding duty.
The parties agree that Lone Star’s summary judgment burden regarding
proximate cause is to provide evidence that would allow a reasonable fact finder
to conclude that the FDA’s negligence caused a false positive result. Our review
of the record leads us to the conclusion the district court reached: the summary
judgment evidence does not raise a genuine issue of material fact on causation.
Lone Star urges that its evidence permits a reasonable juror to find that
the FDA caused the biscuits to falsely test positive for Listeria monocytogenes.
It cites Benware’s deposition testimony related to collecting the biscuit samples
from MarketFare for the following summary judgment facts: (1) Benware was
not aware that the biscuits were in a perforated shrink-wrap packaging and thus
might have been contaminated as he and the other inspector reached into the
box; (2) the packaged biscuits were not placed in sterile containers for shipment
to the FDA laboratory; and (3) the government documents do not establish the
chain of custody for the biscuits. Lone Star also claims that the FDA impliedly
acknowledged it had contaminated the biscuit samples when it failed to demand
a market recall, despite the widespread sales of the biscuits to other food sellers.
The government responds that this deposition testimony falls far short of
the minimum required to establish causation. It cites the report prepared by
Lone Star’s expert witness, which concludes:
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No. 09-50374
The integrity of the biscuit samples collected at MarketFare on
March 21, 2002, was compromised by the FDA; thus, all results with
regard to the biscuit component were meaningless. The FDA failed
to follow its directives and mandates throughout its investigation at
MarketFare, which began on March 21, 2002.
The government contends that a mere possibility of contamination differs
meaningfully from evidence that contamination and a false positive in fact
occurred. It argues that the former would amount to a strict liability standard
for any breach of agency procedures, while the latter is unsupported by the
summary judgment evidence.
In support of their arguments on causation, both parties cite the
unpublished decision of Baker v. Abo, No. Civ. 01-1248, 2003 WL 21639151 (D.
Minn. July 2, 2003). In that case, a truck driver was discharged based on the
results of a drug test that he argued was improperly performed, leading to
contamination of the sample and a false positive result. Id. at *1. The truck
driver asserted that due to claimed irregularities in conducting the test, his
results should have been voided and not communicated to the employer. Id. at
*2. The court considered an affidavit by the truck driver’s expert witness, but
found the expert “did not opine that [the breach alleged] could have caused the
positive result in this test”; the remaining evidence did not permit a reasonable
factfinder to determine the defendant’s negligence caused the false positive
result. Id. at *4. The court expressly rejected a strict liability standard under
which a mere possibility of contamination would carry the truck driver’s
summary judgment burden of raising a fact issue; it then granted summary
judgment for the employer, finding the truck driver had failed to raise a fact
issue on causation. Id. at *3–4.
Our review of the record reveals that the report of Lone Star’s expert and
the deposition testimony of Benware are the only pieces of evidence that pertain
to the issue of proximate causation. The expert report discusses several
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No. 09-50374
instances where the FDA inspectors failed to follow agency collection and testing
protocol, but it is devoid of any claim that these failures caused the biscuit
samples to test falsely positive for Listeria monocytogenes. Benware’s testimony
similarly permits an inference of breach, but it fails to raise a fact issue on
whether the FDA’s conduct caused the biscuit samples to test falsely positive for
the bacteria. Because Lone Star bore the burden of proof on this essential
element of its cause of action, the district court properly granted summary
judgment to the government.
IV. CONCLUSION
For the reasons discussed above, the district court’s grant of summary
judgment for the government is AFFIRMED.
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