On-Site Screening, Inc. v. United States

In the
United States Court of Appeals
For the Seventh Circuit
No. 11-2895
O N-SITE S CREENING, INC. & R ONALD L. L EALOS,
Plaintiffs-Appellants,
v.
U NITED S TATES OF A MERICA,
Defendant-Appellee.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 09-C-06084—Joan B. Gottschall, Judge.
A RGUED M AY 22, 2012—D ECIDED JULY 25, 2012
Before E ASTERBROOK , Chief Judge, and W ILLIAMS and
T INDER, Circuit Judges.
T INDER, Circuit Judge. Ronald Lealos, through his
company On-Site Screening, Inc. (On-Site), sought to
develop a rapid, self-administered test to determine a
person’s HIV status. The development process included
the collection of human blood and saliva samples. On-Site
sued the United States under the Federal Tort Claims
Act (FTCA) for the destruction of its blood and saliva
2 No. 11-2895
specimens by the Food and Drug Administration (FDA).1
The district court found on summary judgment that
the plaintiffs failed to contest the government’s evi-
dence that the suit arose from a law enforcement officer’s
detention of property excepting the claims from the
FTCA’s waiver of sovereign immunity. See 28 U.S.C.
§ 2680(c). This appeal followed.
I. Factual Background
We review the grant of summary judgment de novo
construing all relevant facts in the appellants’ favor. MMG
Fin. Corp. v. Midwest Amusements Park, LLC, 630 F.3d 651,
656 (7th Cir. 2011). On-Site must point to facts showing
a genuine issue for trial to win reversal. Id. Normally
we review a district court’s enforcement of its local
rules for an abuse of discretion, Patterson v. Ind. News-
papers, Inc., 589 F.3d 357, 360 (7th Cir. 2009), but the
appellants do not contest the finding that they failed to
follow local rules.
The government’s investigation of On-Site started in
October 2004 when a local fire inspector informed the
FDA that materials labeled HIV-positive were in a
Bedford Park laboratory that made over-the-counter
products like shampoos and deodorants. Jocelyn Ellis, a
special agent in the FDA’s office of criminal investiga-
tions, began investigating. After receiving written con-
1
Lealos is also a plaintiff but we will generally just refer to On-
Site for simplicity’s sake.
No. 11-2895 3
sent from the facility’s owner, she found and removed
blood and saliva specimens labeled HIV-positive from
a refrigerator at the facility. Ellis deemed the specimens
evidence in her investigation and placed them in storage
in an Illinois Department of Public Health laboratory
freezer. Ellis closed her investigation about four years
later with the U.S. Attorney’s Office declining to pros-
ecute On-Site or its owner appellant Ronald Lealos and
the FDA’s Chicago district office declining to pursue a
civil regulatory action. With Ellis’s investigation over,
the FDA contacted Lealos to see whether he wanted
On-Site’s specimens returned or destroyed. Lealos said
he wanted the specimens back. Yet sometime before this
the freezer in which the specimens were stored stopped
operating causing the destruction of the blood and
saliva specimens.
On-Site sued the United States under the FTCA alleging
bailment, negligence, and breach of internal agency rules
and protocols requiring the agency to maintain evidence
in the condition in which it was discovered. The United
States moved to dismiss on grounds that an exception
to the FTCA’s waiver of sovereign immunity—28 U.S.C.
§ 2680(c), excepting “any claim arising in respect of the . . .
detention of . . . property by” law enforcement officers—
applied to On-Site’s claims. The district court found
that the complaint’s facts established a detention but
allowed discovery to determine whether the specimens
were detained by a “law enforcement officer” and whether
an exception to the exception applied for property
“seized for the purpose of forfeiture.” Id. § 2680(c)(1);
On-Site Screening, Inc. v. United States, No. 09 C 6084, 2010
4 No. 11-2895
WL 3025039, at *3-4 (N.D. Ill. July 30, 2010). On-Site
deposed Ellis and the government produced about 2,000
pages of documents. On-Site moved to file an amended
complaint and the government moved for summary
judgment and filed a Local Rule 56.1 statement of facts.
The district court deemed the government’s facts
admitted because On-Site failed to cite admissible evi-
dence in support of its denial of facts in violation of
Local Rule 56.1(b). On-Site Screening, Inc. v. United States,
No. 09 C 6084, 2011 WL 3471068, at *3 (N.D. Ill. Aug. 3,
2011). The court then found that Ellis was a federal law
enforcement officer and that she detained On-Site’s
specimens. Id. at *4. Thus, On-Site’s claims fell within
the law enforcement officer-detaining-property excep-
tion to the FTCA’s waiver of the federal government’s
sovereign immunity. See 28 U.S.C. § 2680(c). The court
also found that Ellis did not seize the property for pur-
poses of forfeiture, see id. § 2680(c)(1), and denied On-Site’s
motion to file an amended complaint because no
matter how On-Site characterized its claims, they arose
in respect to a law enforcement officer’s detention of
property making any attempt to amend futile. On-Site
Screening, 2011 WL 3471068, at *6.
II. Analysis
The FTCA waives the government’s sovereign
immunity for money damages claims for the loss of
property caused by negligent or wrongful acts or omis-
sions of government employees acting within the scope
of their office or employment in circumstances where
No. 11-2895 5
a private person would be liable. 28 U.S.C. §§ 1346(b)(1) &
2671-2680. Yet an exception to this waiver applies to
claims “arising in respect of . . . the detention of any
goods, merchandise, or other property by . . . any other
law enforcement officer.” 28 U.S.C. § 2680(c). This provi-
sion is broad given its use of the expansive term “any,”
Ali v. Fed. Bureau of Prisons, 552 U.S. 214, 218-19 (2008),
and the lack of a textual indication “that Congress in-
tended immunity for those claims to turn on the type
of law being enforced,” id. at 221.
On-Site argues we should use an agency publication
discussing seizures and detentions to determine whether
the government seized its specimens. See U.S. Food and
Drug Administration, Inspections, Compliance, Enforce-
ment, and Criminal Investigations, 2.7 Detention Activities,
w w w .f d a . g o v / IC E C I / In s p e c t io n s / I O M / u c m 1 2 2 5 1 5 .
htm#SUB2.7 (last visited July 20, 2012); U.S. Food and
Drug Administration, Inspections, Compliance, Enforce-
ment, and Criminal Investigations, 6-1 Seizure, www.
fda.gov/ICECI/ComplianceManuals/Regulatory
ProceduresManual/ucm176733.htm (last visited July 20,
2012). On-Site maintains that this publication charac-
terizes the FDA actions as a seizure within the § 2680(c)(1)
exception to the exception.
Despite what an agency publication may say, for pur-
poses of interpreting this federal statute, the “ordinary
meaning of the words used” governs what constitutes
a detention by a law enforcement officer. See Kosak v.
United States, 465 U.S. 848, 853 (1984) (quoting Am. Tobacco
Co. v. Patterson, 456 U.S. 63, 68 (1982)). And “the fairest
6 No. 11-2895
interpretation” of “ ‘any claim arising in respect of’ the
detention of goods . . . includes a claim resulting from
negligent handling or storage of detained property.” Id. at
854 (quoting 28 U.S.C. § 2860(c)). The government pre-
sented uncontroverted evidence that Ellis detained the
specimens as a law enforcement officer for a criminal
investigation and not for purposes of forfeiture. The
government’s evidence included sworn deposition testi-
mony, contemporaneous agency investigation reports,
an independent report from the local fire inspectors,
and the signed consent to search and seize state-
ment from the laboratory facility’s representative. This
evidence shows that under any ordinary meaning of the
term “detention,” Ellis detained the specimens as a law
enforcement officer within § 2680(c). See Kosak, 465 U.S. at
854 (exception for law enforcement detentions covers
property storage and handling).
On-Site fails to point to any evidence showing that
there is a genuine dispute over whether a law enforce-
ment officer detained its specimens in the ordinary sense
of the word “detained.” See Parrott v. United States, 536
F.3d 629, 636 (7th Cir. 2008) (discussing what constitutes
a “detention”). Even if On-Site is right, and the govern-
ment in fact seized On-Site’s specimens, the seizure of
property is a natural and seemingly necessary predicate
to the subsequent detention of that property. On-Site’s
speculation that “for all [On-Site] knows it was indeed
for the purpose of forfeiture,” Brief for Appellant at 10,
is insufficient to avoid summary judgment. Johnson v.
Cambridge Indus., Inc., 325 F.3d 892, 901 (7th Cir. 2003)
(summary judgment is “put up or shut up” time when
No. 11-2895 7
a party “must show what evidence it has that would
convince a trier of fact to accept its version of events”).
On-Site’s allegations about what we don’t know,
mistaken belief that the district court dismissed its com-
plaint on a motion to dismiss, and counterproductive
argument that the FTCA’s other exceptions to the
federal government’s waiver of sovereign immunity
somehow save its claims, see 28 U.S.C. § 2680(f) (main-
taining sovereign immunity with respect to claims
caused by quarantine) & (h) (likewise with respect to
claims arising out of “interference with contract rights”),
fail to create a genuine dispute about any material fact.
On-Site also argues that we should preclude the gov-
ernment from asserting sovereign immunity as a defense
to this litigation because it did not base its denial of
On-Site’s administrative claim on that doctrine or claim
that a law enforcement official detained the specimens.2
But executive branch officials cannot waive sovereign
immunity, United States v. Shaw, 309 U.S. 495, 500-01 (1940)
2
The terminology used by On-Site in making these arguments
illustrates a misunderstanding of the principles involved. It
asserts that the government cannot raise these defenses be-
cause of the “mend the hold” doctrine. There is no way to
apply that concept to this litigation for more reasons than
need to be spelled out here. It is enough to note that the doc-
trine applies in breach of contract suits and that it does not
prohibit the addition of a defense after suit is filed or
otherwise limit a defendant to defenses announced before a
suit is filed. See Ryerson Inc. v. Federal Ins. Co., 676 F.3d 610,
614 (7th Cir. 2012).
8 No. 11-2895
(only by specific statutory consent may a lawsuit “be
brought against the United States”), and the FTCA does
not require the pleading of legal theories in the admin-
istrative process, see 28 U.S.C. § 2675(a) (claim deemed
denied if agency doesn’t make a final disposition
within six months of filing). The government satisfied
its burden to assert sovereign immunity by timely
raising sovereign immunity as a defense to On-Site’s
complaint. See Parrott, 536 F.3d at 634-35 (FTCA excep-
tions are not jurisdictional restrictions).
On-Site also fails to show that the district court
abused its discretion in denying its request to amend
because doing so would be futile. See Johnson v. Cypress
Hill, 641 F.3d 867, 872 (7th Cir. 2011) (district courts
have broad discretion to deny leave to amend “where
the amendment would be futile”). On-Site’s amended
complaint sought compensation from the United States
under the FTCA for the destruction of the specimens
Ellis took from the Bedford Park laboratory. However
characterized, the tort claims raised in the proposed
amended complaint fall within the FTCA’s preservation
of sovereign immunity for claims involving law enforce-
ment officers detaining property, see 28 U.S.C. § 2680(c),
and don’t fit within any of the exceptions to the excep-
tion, see id. § 2680(c)(1)-(4). Thus, the district court did not
abuse its discretion in denying On-Site’s request to
amend on the basis of futility.
Finally, almost as an aside, On-Site also asks that we
declare that it is entitled to a Tucker Act remedy or order
the district court not to disturb any potential Tucker
No. 11-2895 9
remedy it might have. See 28 U.S.C. § 1491. In its reply
brief, On-Site faults the district court for not transferring
its claims to a court with jurisdiction over Tucker Act
claims. On-Site seeks damages far exceeding the $10,000
monetary threshold giving the U.S. Court of Federal
Claims exclusive jurisdiction over any potential Tucker
claims On-Site might file. See 28 U.S.C. § 1346(a)(2). We
aren’t sure what Tucker remedy On-Site thinks it might
have because it does not point to any constitutional,
statutory, or regulatory provision that can “fairly be
interpreted as mandating compensation.” United States v.
Norwood, 602 F.3d 830, 834 (7th Cir. 2010) (quoting
United States v. Mitchell, 463 U.S. 206, 217 (1983)). These
assertions are so sparse in On-Site’s briefs that they
could be considered undeveloped and thus waived. See
Argyropoulos v. City of Alton, 539 F.3d 724, 738 (7th
Cir. 2008). But not even the most generous reading of
either On-Site’s original complaint or its proposed
amended complaint hints of a trace of any claim under
the Tucker Act, so the district court had nothing to
transfer, see 28 U.S.C. § 1631 (transfer of cases for want
of jurisdiction), and federal courts do not give advisory
opinions on claims not before them. See, e.g., Rodas
v. Seidlin, 656 F.3d 610, 630 (7th Cir. 2011) (“Federal
courts are not in that business.”).
III. Conclusion
We A FFIRM the district court’s judgment dismissing
On-Site’s complaint with prejudice.
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