Case ID: us-ct-cl_188/html/0736-01.html
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Date Created: 2024-08-24T03:29:51.129683

MIKE MIZOKAMI, SAM MIZOKAMI, TOM MIZOKAMI, and HATSUYO MIZOKAMI v. THE UNITED STATES
    [No. 5-65.
    Decided July 16, 1969]
    
      
      F. Trowbridge vom Bam, attorney of record, for plaintiffs. George M. Oobum and Geoffrey T. Keating, of counsel.
    
      B. W. Koslcinen, with whom was Assistant Attorney General William D. Ruclcelshaus, for defendant.
    Before CoweN, Chief Judge, LaRAmoke, Dukfee, Davis, ColliNS, SkeltoN, and Nichols, Judges.
    
   Pek Curiam:

This case was referred to Chief 'Commissioner Marion T. Bennett with directions to make findings of fact and recommendation for conclusions of law under the order of reference and Buie '57(a). The commissioner has done so in an opinion and report filed on November 29,1968. Exceptions to the commissioner’s findings of fact and recommended conclusion of law were filed by the parties and the case has been submitted to the court on oral argument of counsel and the briefs of the parties.

The court is in agreement with the opinion, findings and recommended conclusion of law of the commissioner with certain changes and it incorporates and adopts the same, with changes and modifications, as hereinafter set forth, as the basis for its judgment in this case. Therefore, plaintiffs are entitled to recover and judgment is entered for plaintiffs in the sum of $301,974.38.

'Chief 'Commissioner Bennett’s opinion, as modified by the court, is as follows:

Plaintiffs, partners in Mizokami Brothers Produce, growers and shippers of fresh vegetables, are the largest growers of summer spinach in the United States. From their main location at Blanca, Colorado, plaintiffs ship most of their summer spinach crop to the eastern United States, where it is washed, graded, and made up in 10- and 20-ounce packages ready for household use by firms in the prepackaged vegetable industry.

Between July 16 and August 17,1962, agents of the Food and Drug Administration (FDA) took samples from 10 cars of spinach shipped by plaintiffs to various customers to check for possible violations of the Federal Food, Drug, and Cosmetic Act. 28 U.S.C. §§ 301 et seg. As to eight of the cars, plaintiffs were advised that no unallowable pesticide contamination bad been found. By means of paper chromatographic testing, however, FDA determined that two shipments to Muller Foods Company of Jersey City, New Jersey, were contaminated with heptachlor, a pesticide for which FDA regulations allowed no human tolerance on spinach. The samples had been taken on August 6, 1962, and, on August 10, 1962, FDA notified Muller of its findings and directed that no further use be made of the spinach. On the same date, FDA secured an embargo on the remaining spinach by the Jersey City Board of Health. One of the two cars had already been unloaded, while the other still contained 418 bushels of spinach. On August 14,1962, defendant filed a libel of seizure and condemnation against the 418 bushels of spinach in the United States District Court for New Jersey on grounds that it was contaminated or adulterated within the meaning of 21 U.S.C. §§ 342(a) (2) (B) and 346a(a). Under date of August 17,1962, FDA officially notified plaintiffs of the heptachlor finding.

Plaintiffs took numerous steps to check the accuracy of the FDA finding and (to investigate potential sources of contamination after hearing of the finding from the Muller Foods Company on August 10,1962. Plaintiffs retained William B. Bradley and Associates, chemists, of Newark, New Jersey, and Dr. Polen of the Velsicol Corporation of Chicago and the inventor of heptachlor, to test samples of the condemned spinach. Tests by both proved negative as to the presence of heptachlor. On August 30, 1962, plaintiff Mike Mizokami and counsel appeared at an FDA hearing in Denver, denying ever having used heptachlor, and presenting results of their fruitless search for a source of contamination.

At this juncture, the FDA sent a sample of the condemned spinach to Washington for (analysis by gas chromatography, a procedure considerably more sensitive than paper chromatography. By letter of September 24,1962, the Deputy Commissioner of FDA admitted to plaintiffs that the original analysis by paper chromatography was in error and that the gas chromatographic analysis had not confirmed the presence of heptachlor.

Plaintiffs now claim damages resulting in the amount of $543,879.96, stemming from four main alleged sources as follows: (1) discing under spinach forced by defendant’s error, $438,593.75; (2) sales of spinach at lower prices in the 1962 and early 1963 summer spinach seasons, $75,633.76; (3) cost of Colorado counsel, $6,651.35; (4) miscellaneous travel, telephone, legal, and other expenses, $23,001.10.

I

Plaintiffs are before the court under Priv. L. No. 88-346, 78 Stat. 1195 (1964), which provides as follows:

* * * That jurisdiction is hereby conferred on the United States Court of Claims to hear, determine, and render judgment on the claims of Mike Mizokami, Sam Mizokami, Tom Mizokami, and Hatsuyo Mizokami, jointly, doing business as Mizokami Brothers Produce, of Blanca, Colorado, based upon damages and losses allegedly sustained as the result of erroneous determinations by the Food and Drug Administration in 1962 that spinach grown by the said Mike Mizokami, Sam Mizokami, Tom Mizokami, and Hatsuyo Mizokami, jointly, doing business as Mizokami Brothers Produce, of Blanca, Colorado, was contaminated by the pesticide 'heptachlor. Suit upon such claims may be instituted any time within one year of the date of approval of this Act.

Past special jurisdictional acts can be placed in one of two general categories. One type of act is designed merely to waive some affirmative defense which the United States could presumably otherwise effectively plead. Such acts have waived defenses based on statutes of limitations, as well as those based on the principle of res judicata.

The other type of act additionally embraces an admission of liability by the United States and leaves a greater or lesser number of the factual and legal questions relating to damages for the court. Pope v. United States, 323 U.S. 1 (1944); Indians of Cal. v. United States, 98 Ct. Cl. 583 (1942), cert. denied, 319 U.S. 764 (1943). See generally Glidden Co. v. Zdanok, 370 U.S. 530, 566-67 (1962).

It is clear that Priv. L. No. 88-346, supra, constitutes a waiver of the sovereign immunity which defendant could otherwise claim in this case. In the absence of the special act, any suit on the above-stated facts under the Federal Tort Claims Act, 28 U.S.C. §§ 2671 et seg., would be precluded by 28 U.S.C. § 2680(h), which expressly excepts from the Tort Claims Act waiver of sovereign immunity “[a]ny claim arising out of * * * misrepresentation * * In Jones v. United States, 207 F. 2d 563 (2d Cir. 1953), cert. denied, 347 U.S. 921 (1954), plaintiffs sought damages for an alleged misrepresentation by the Director of the United States Geological Survey as to the oil production potential of certain realty which the United States had leased to a corporation in which plaintiffs were substantial stockholders. Though USGS had sufficient information available to compute accurately the productive capacity of the land, the Director supplied plaintiffs with a much lower figure than was ultimately recovered, thereby inducing them to sell their stock at an insufficient price. Plaintiffs’ complaint was based on theories of both negligent and willful misrepresentation. Dismissal was affirmed by Judge Frank in these words:

Plaintiffs’ second cause of action asserts wilful misrepresentation. This claim is clearly barred by Sec. 2680 ■ (h) of the [Tort Claims] Act. * * * We think the first cause of action, for negligence, is also 'barred. Section 2680 (h) prohibits suits against the government on claims arising out of “assault, battery, false imprisonment, false arrest, malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights.” As “deceit” means fraudulent misrepresentation, “misrepresentation” must have been meant to include negligent misrepresentation, since otherwise the word “misrepresentation” would be duplicative. [207 F. 2d at 564.]

Defendant’s motion to dismiss for failure to state a claim was likewise granted in Anglo-American & Overseas Corp. v. United States, 242 F. 2d 236 (2d Cir. 1957), aff’g 144 F. Supp. 635 (S.D.N.Y. 1956). At issue there was an alleged misrepresentation by the FDA that certain tomato paste imported by plaintiffs complied with standards of the Pure Food and Drug Act. The court held that the claim

* * * “arose out of” the assertedly negligent representation of the quality of the tomato paste by federal employees. Such a claim is barred by Jones v. United States * * *, which held that Section 2680(h) * * * excepted from liability negligent as well as intentional misrepresentation. [242 F. 2d at 237.]

The Tenth Circuit adopted a similar position, granting summary judgment for defendant in Hall v. United States, 274 F. 2d 69, 71 (10th Cir. 1959), because

* * * [p]laintiff’s loss came about when the Government agents misrepresented the condition of the cattle, telling him they were diseased when, in fact, they were free from disease. The claim is that this misrepresentation caused plaintiff to sell his cattle at a loss * * *. Misrepresentation as used in the exclusionary provision of the * * * [Tort Claims Act] was meant to include negligent misrepresentation.

The Supreme Court, in reversing a Fourth Circuit holding that the United States was liable to a home purchaser who was the victim of a negligently made appraisal by the Federal Housing Administration, settled the negligent misrepresentation question in favor of the Government, citing the Jones, Anglo-American & Overseas Corp., and Hall cases, supra. United States v. Neustadt, 366 U.S. 696 (1961). The Supreme Court in Neustadt noted that it could not accept the lower court’s reasoning that the misrepresentation involved was merely “incidental” to the plaintiff’s claim. The Court then held that it was

* * * in accord with the view urged by the Government, and unanimously adopted by all Circuits which have previously had occasion to pass on the question, that § 2680(h) comprehends claims arising out of negligent, as well as willful, misrepresentation. [366 U.S. at 702.]

The Court of Claims has recently denied, because of 28 U.S.C. § 2680 (h), any recovery on the legal claim in a congressional reference case based on negligent misrepresentation by an Agriculture Department official that certain potatoes would meet the import requirements of Sweden. O'Donnell v. United States, 166 Ct. Cl. 107, 109 (1964).

The legislative history of the special jurisdictional act now before the court indicates that Congress was well aware of the Tort Claims Act bar against plaintiffs. The House and Senate Judiciary Committees each said:

The committee feels that the Government’s admission of error and expression of regret for the incident is a commendable act. However, as is apparent in this appeal for legislative relief, the Mizokami Bros, have no other way to be compensated for any damages or losses caused by the Government’s erroneous action but to appeal to Congress. [H.R. Rep. No. 1659, 88th Cong., 2d Sess. 3 11964); S. Rep. No. 1578, 88th Cong., 2d Sess. 3 (1964) (emphasis added).]

The committee report in each House also sets out letters from the Departments of Justice and Health, Education, and Welfare which cite the Tort Claims Act doctrine discussed above and recommend denial of relief to plaintiffs. H.R. Rep. No. 1659, supra at 4-7; S. Rep. No. 1578, supra at 5-8.

It thus seems certain that the sovereign immunity bar was lifted by the provision that “jurisdiction is hereby conferred” on this court to “hear, determine, and render judgment” on plaintiffs’ claims. Priv. L. No. 88-346, supra. To hold otherwise would be to presume that Congress passed the bill in question merely to send plaintiffs to this forum for a ritual confirmation of the Neustadt rule and concomitant dismissal of their petition.

It is concluded, however, that Congress has gone one step further and conceded liability for the actions of the FDA. The committee report in each House contains the following crucial wording:

The persons affected have appealed to the Congress for relief because the Government did not finally correct its erroneous determination until a considerable period of time had elapsed and as a result the growers suffered losses and difficulties in connection with their business.
*****
* * * The committee finds that it must disagree with the conclusion of the Department of Health, Education, and Welfare that relief should not be extended in this case. * * *
It is not enough to say that a mistake by the Government should be borne by the individual harmed in the absence of general legislation. * * * The Congress has the power to grant relief and it seems only right that a remedy should be provided. However, this committee feels that questions concerning the quantum of damages and whether a sufficient connection can be proven between the Government’s action and the alleged losses are most properly determined by a court. Under a jurisdictional bill, these matters must be proven by competent evidence in accordance with the rules and procedures of the Court of Claims. [H.R. Rep. No. 1659, supra at 2,4; S. Rep. No. 1578, supra at A-5 (emphasis added).]

Though perhaps it could more clearly have so provided, it thus appears that Congress has left the factual and legal questions relating to causation and damages, matters especially appropriate for judicial determination, for this court, having first determined liability itself. It has exercised its power to provide for the payment of debts and has imposed on the Government “a new obligation where there has been none before” by recognizing a claim “merely moral or honorary.” Pope v. United States, supra at 9; see United States v. Realty Co., 163 U.S. 427 (1896).

Defendant cites Aragona Constr. Co. v. United States and Hempstead Warehouse Corp. v. United States, supra, in opposition to this viewpoint. In the former case, however, the jurisdictional bill contained the following provision:

* * * Proceedings for the determination of such claim and review thereof, and payment of any judgment thereon, shall be had as in the case of claims over which such court has jurisdiction under section 1491 of title 28 of the United States Code.
* * * Nothing contained in this Act shall be construed as an inference of liability on the part of the United States Government. [165 Ct. Cl. at 393.]

The jurisdictional bill in the Hempstead Warehouse Gorp. case likewise provided that

* * * [p] roceedings for the determination of such claim, ana appeals from, and payment of, any judgment thereon shall be in the same manner as in the case of claims over which the Court of Claims has jurisdiction under section 145 of the Judicial Code, as amended. [120 Ct. Cl. at 292.]

No reference to the general jurisdictional act of this court or to any other general jurisdictional act is made in Priv. L. No. 88-346, supra. The two cases cited by defendant, therefore, are inapposite to the instant one.

II

It is agreed that plaintiffs disced under 335 acres of quality spinach in the latter part of the 1962 season and that they obtained lower average prices for their 1962 and early 1963 crops than for those in 1961 and early 1962, respectively. It is as to the cause of that situation that the parties differ, plaintiffs ascribing it to the FDA and defendant blaming an allegedly weak market for summer spinach.

Defendant claims that a 37-percent drop over the 1959-65 period in combined rail and truck unloads of fresh spinach in the New York, Philadelphia, and Boston markets (Where six of plaintiffs’ seven major customers are located) demonstrates an overall weakness in the fresh spinach market due to competition from frozen spinach. It is doubtful that this one statistic establishes such a broad conclusion. In addition, plaintiffs’ spinach is shown to be of such high quality that it actually does not compete with most other varieties. This fact seriously weakens that portion of defendant’s evidence which is based on (the market for spinach in general.

Plaintiffs have also proved that from 1957-65, except for 1962 (after July 16) and early 1963, the demand for Mizo-kami spinach far exceeded the supply, necessitating a procedure whereby plaintiffs’ eastern broker would prorate cars among customers, filling but a given percentage of each order to prevent one customer from gaining a competitive advantage. Even assuming, arguendo, that the general fresh spinach market has declined, such hypothetical decline appears not to have affected plaintiffs in the years just before and after those in question and, by reasonable inference, not in 1962 and early 1963.

Defendant has based considerable argument on price figures for the New York wholesale market, though testimony of defendant’s principal witness shows that such figures include transportation costs, profit for the wholesaler, and possibly other items. Since the prices relevant to this case are those for which plaintiffs sell spinach f.o.b. Blanca, Colorado, even if any conclusions significantly favorable to defendant could be drawn from the New York figures, which conclusions are not shown, they would be of indirect analogical value at best.

A marketing and acreage guide issued by the Agricultural Marketing Service of the Department of Agriculture in February 1962 noted that the 1961 eastern spinach crop suffered heat damage during the fall harvest, thereby aiding the Colorado growers; it went on to suggest a planting increase for 1962 in Colorado spinach of 5 percent over 1961. Defendant points to the fact that combined rail and truck unloads of fresh spinach from all areas in the New York, Philadelphia, and Boston markets increased about 7 percent from the summer spinach season (June-October) of 1961 to that of 1962 to prove that Colorado growers ignored the AMS guide and overplanted, thereby glutting the market. It likewise seems doubtful that an increase in unloads from all areas in only three cities can be deemed to demonstrate a substantial overplanting in Colorado. Alternatively, one could argue from defendant’s reasoning about the 37-percent drop in unloads, 1959-65, supra, that the 7-percent increase indicates a good market for summer spinach. Defendant would have it so that an increase in an unload figure shows an overplanting, while a decrease shows a weak market.

Plaintiffs, on the other hand, deal more specifically with the product in issue, relying on their proof of exceptional quality and inability to meet demand. Plaintiffs also produce expert testimony that their increase of 260 acres between 1961 and 1962 would not have hurt their market. Proof is adduced to indicate that the demand in early 1962 of plaintiffs’ customers, specifically, was strong.

Against this, defendant establishes that George Buss, of Center, Colorado, shipped some 57,224 bushels of spinach in 1962, in a 1-year project, and that he obtained prices near those received by plaintiffs. His entry into the market is suggested as a cause of the discing under and sales losses.

Although neither Daniel J. Storey, a Philadelphia customer then buying spinach through Hyman Eubin, nor Earlis E. Mead, market reporter for the Consumer Marketing Service of the Department of Agriculture in New York City, was contemporaneously aware of Mizokamis’ FDA problems in 1962, plaintiffs establish that news travels fast in the produce business and that the overall effect of the stoppages and erroneous determination was to depress their business and force price cuts. Ernest LaBarba, of Dallas, Texas, started buying from competitors after FDA stoppage of a shipment to him on July 16,1962, and resumed business with plaintiffs only because of dissatisfaction with other spinach. Community Produce of Boston, one of plaintiffs’ seven major customers, bought no spinach from plaintiffs between August 4 and August 27,1962, having had cars from Mizokami intercepted on August 2 and August 6, 1962. Hyman Eubin, plaintiffs’ eastern broker, estimates that the FDA problem prevented his handling at least an additional 55 cars (46,200 bushels) of Mizokami spinach in 1962.

In sum, plaintiffs demonstrate a sufficient connection between the actions of defendant and their discing under and sales losses. Because, then, plaintiffs would have been able to sell their entire 1962 crop at substantial prices but for the FDA problem, the facts that 1962 sales to plaintiffs’ seven major customers dropped only 8 percent from 1961, that plaintiffs sold more spinach between August 20 and September 24 in 1962 than in 1961 or 1963, and that plaintiffs’ prices rose moderately in the latter part of the 1962 season, are of little avail to defendant. For example, because of the acreage increase in 1962, plaintiffs should have sold considerably more spinach to their seven major customers and should have sold considerably more during the August 20-Sep-tember 24 period for 1962 than for 1961 or 1963. Additionally, the mere fact that a moderate price increase occurred does not change the more crucial facts that prices were, for the duration of the August 10-September 24 period, lower in 1962 than in previous years and that the normal price increase expected in late August each year was smaller than usual in 1962. The proof adduced by defendant, therefore, fails to dispute the conclusions warranted by plaintiffs’ evidence.

Having determined that “sufficient connection [has been] proven between the Government’s action and the alleged losses,” it remains for this court to ascertain “the quantum of damages.” H.E. Hep. No. 1659, supra at 4; S. Rep. No. 1578, supra at 4. Such damages are recoverable only to the extent that they were “sustained as the result of erroneous determinations by the” FDA. Priv. L. No. 88-346, supra. The first of such determinations having been made on August 10,1962, plaintiffs’ damages prior to that date (i.e., from the date of the first FDA sampling on July 16) are not recoverable ■under the jurisdictional act.

In Story Parchment Co. v. Paterson Parchment Paper Co., 282 U.S. 555, 562 (1931), the Supreme Court explained that

* * * there is a clear distinction between the measure of proof necessary to establish the fact that petitioner had sustained some damage, and the measure of proof necessary to enable the jury to fix the amount. The rule which precludes the recovery of uncertain damages applies to such as are not the certain result of the wrong, not to those damages which are definitely attributable to the wrong and only uncertain in respect of their amount.

The Court of Claims has followed this general rule of damages, noting that it “is a settled principle that where the fact of damage has been established, absolute certainty or precise mathematical accuracy as to the amount of damages is not necessary.” Dale Constr. Co. v. United States, 168 Ct. Cl. 692, 729 (1964), and cases cited therein; accord, Specialty Assembling & Packing Co. v. United States, 174 Ct. Cl. 153, 184, 355 F. 2d 554 (1966), and cases cited therein; Adams v. United States, 175 Ct. Cl. 288, 299, 358 F. 2d 986, 993 (1966) ; Luria Bros. & Co. v. United States, 177 Ct. Cl. 676, 695-96, 369 F. 2d 701, 712-13 (1966).

It is accordingly concluded that, absent the actions of the FDA in 1962, plaintiffs could have sold the crop on the 335 acres which were eventually disced under, or about 134,556 additional bushels of spinach. It is further concluded that plaintiffs could have obtained an average price of $2.22 per bushel for their entire crop in 1962, such price being the overall average price received both in 1961 and 1963, so that, allowing for harvesting costs of $0.53 per bushel, an additional $227,399.64 would have been realized from the acreage not sold at all, as well as an additional $49,904.65 from the acreage sold at depressed prices, from August 10, 1962, through the end of the 1962 season, for an average of $1.83 per bushel. Finally, but for the last vestiges of the heptachlor problem, plaintiffs would have received about $2.07 per bushel for the first 25,320 bushels sold in 1963 rather than the actual figure of $1.89 per bushel, thereby increasing their revenue $4,557.60.

All 165 hours of office time and all 31 days of travel time expended by plaintiffs’ Colorado counsel, Mr. Whitford W. Myers, were related very closely to the heptachlor finding, in that they concerned the possibility of a Tort Claims Act action, reestablishing satisfactory relations with eastern customers, and preparation and prosecution of plaintiffs’ endeavor to obtain legislative relief, culminating in the act under which this suit is brought. With regard to plaintiffs’ claim for recovery of those expenses, defendant does not challenge the amount of time expended or the valuation placed thereon, but argues that plaintiffs should recover only for those services rendered prior to September 24,1962, the date of FDA’s letter of apology, citing Piggly Wiggly Corp. v. United States, 112 Ct. Cl. 391, 81 F. Supp. 819 (1949). By its argument, defendant appears to agree with plaintiffs that the special jurisdictional act contemplates recovery of such fees, but urges that they must be limited, as aforesaid, to make the recovery on this item only $1,125.

There is no basis in logic or in the legislative 'history to choose the date of the FDA letter of apology to bar further recovery of Colorado counsel expenses, as all of Mr. Myers’ work was equally related to defendant’s error and plaintiffs’ efforts to minimize its effects and ultimately, to be made whole for them. It is also worthy of note that the services for which recovery is sought were all rendered prior to enactment of the jurisdictional act on October 6, 1964, and, therefore, not directly involved in the preparation and presentation of this lawsuit. Plaintiffs are entitled to recover $7,801.35, representing 165 hours of office time at $15 per hour, 81 days of travel time at $150 per day, and $176.35 in reimbursement of expenses.

Defendant does not challenge plaintiffs’ recovery of the following items: (1) $1,591.30 for the value of the condemned spinach and storage, icing, and other expenses incident thereto; (2) $146.18 for expenses of the FDA hearing in Denver on August 30, 1962; (3) $185 for analysis of a sample of the condemned spinach by William R. Bradley and Associates, chemists, of Newark, New Jersey; (4) $315.60 for telephone expense of calls to counsel, customers, and chemists and other matters related to the FDA error through June 1963; and (5) $861 for legal expense in defense of the New Jersey libel suit.

Plaintiffs claim an additional $221.36 for telephone expense incurred due to the heptachlor problem for the period July 1963-June 1964. No reason appears to accept June 1963 as an arbitrary cutoff date for recovery of plaintiffs’ telephone expense, 'all of which is equally related to defendant’s actions and all of which was incurred before the jurisdictional act became law.

There is a failure of proof with regard to plaintiffs’ claim for $1,507.50 direct labor expense of discing under the 335 acres in 1962.

Although Hyman Rubin sustained a loss of $5,437.06 in July and August 1962 on Mizokami spinach which he was unable to sell because of the FDA situation, the evidence fails to establish any preexisting obligation of the Mizokamis to reimburse Rubin for any of their spinach which for some reason lie could not sell. Absent such, proof, the sum claimed is not a loss sustained by plaintiffs and is therefore not susceptible of recovery under the terms of Priv. L. No. 88-346, supra.

Finally, plaintiffs are entitled to recover the travel expense (beyond Mike Mizokami’s normal one annual business visit to eastern customers) necessitated by defendant’s error through the date of passage of the jurisdictional act which commenced the judicial phase of their quest for relief. Such expense emanated from consultations with counsel, with FDA, with Congress, and with plaintiffs’ eastern customers and amounts to $9,490.65.

In summary, it is concluded that Priv. D. No. 88-346, supra, is a special jurisdictional 'act which also concedes liability for actions of the FDA. Compensable damages sustained by plaintiffs include $227,399.64 for spinach disced under, $49,904.65 for sales of spinach at reduced prices (subsequent to August 10) in the 1962 season, and $4,557.60 for sales at reduced prices in the early 1963 season. Plaintiffs additionally are entitled to recover $7,301.35 for Colorado counsel expenses and $12,811.09 for miscellaneous travel, telephone, legal, and other expenses, all of which were directly related to the FDA actions.

FiNdings oe Fact

The court, having considered the evidence, the report of Chief Commissioner Marion T. Bennett, and the briefs and argument of counsel, makes findings of fact as follows:

1. This claim is before the court pursuant to Priv. L. No. 88-346, 78 Stat. 1195 (1964), which provides as follows:

AN ACT

For the relief of Mike Mizokami, Sam Mizokami, Tom Mizokami, and Hatsuyo Mizokami.

_ Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That jurisdiction is hereby conferred on the United States Court of Claims to hear, determine, and render judgment on the claims of Mike Mizokami, Sam Mizokami, Tom Mizokami, and Hatsuyo Mizokami, jointly, doing business as Mizokami Brothers Produce, of Blanca, Colorado, based upon damages and losses allegedly sustained as the result of erroneous determinations by the Food and Drug Administration in 1962 that spinach grown by the said Mike Mizokami, Sam Mizo-kami, Tom Mizokami, and Hatsuyo Mizokami, jointly, doing business as Mizokami Brothers Produce., of Blanca, Colorado, was contaminated by the. pesticide heptachlor. Suit upon such claims may be instituted any time within one year of the date of approval of this Act.

2. Plaintiffs herein, Mike, Sam and Tom Mizokami, brothers, and their mother, Hatsuyo Mizokami, are business partners, doing business as Mizokami Brothers Produce, growers and shippers of fresh vegetables. By 1962 they had become the largest growers of summer spinach in the United States, with their main location in the San Luis Valley at Blanca, Colorado, and branch operations in New Jersey, Arizona, and Mexico.

3. Between July 16' and August 17, 1962, agents of the Food and Drug Administration (FDA) took samples from 10 cars of spinach shipped by plaintiffs to various customers. As to eight of such samples, plaintiffs were advised that no unallowable pesticide contamination had been found. The other two samples were taken on August 6, 1962, in Jersey City, New Jersey, from each of two railroad cars of spinach sent by plaintiffs to the Muller Foods Company.

4. Because paper chromatography of both Jersey City samples indicated the presence of heptachlor, a pesticide for which no human tolerance on spinach is permitted by the FDA, that agency, on August 10, 1962, secured an embargo by the Jersey City Board of Health on one of the two railroad cars. One had already been unloaded; the embargoed car had been partially unloaded but still contained 418 bushels of spinach. The FDA directed Muller to stop unloading the latter car and not to use the remaining spinach.

5. On August 14, 1962, defendant filed a libel of seizure and condemnation, in the United States District Court for New Jersey, against the spinach it believed to be contaminated or adulterated within the meaning of the Federal Food, Drug and Cosmetic Act, 21 U.S.C. §§ 342(a) (2) (B) and 346a(a). Under date of August 17, 1962, FDA officially notified plaintiffs of the positive results of the paper chromatography test for heptachlor.

6. Plaintiffs took numerous steps after hearing of the heptachlor finding from Muller Foods on August 10,1962, to check the accuracy of the FDA finding and to investigate potential sources of contamination. Tests by William Bradley and Associates, chemists, of Newark, New Jersey, and Dr. Polen of the Yelsicol Corporation of Chicago, and inventor of heptachlor, proved negative as to the presence of heptachlor in the condemned spinach.

7. Mike Mizokami and his attorney, Whitford W. Myers, appeared on August 30,1962, at an FDA hearing in Denver, Colorado, at which time plaintiffs presented the results of their fruitless investigations for a source of heptachlor con-tanfination and denied ever having used heptachlor.

8. The FDA at this juncture sent a sample of the condemned spinach to Washington for analysis by gas chromatography, a considerably more sensitive procedure than paper chromatography. By letter of September 24,1962, the Deputy Commissioner of FDA admitted to plaintiffs that the original analysis by paper chromatography was in error and that gas chromatographic analysis had not confirmed the presence of heptachlor. The letter went on to point out that the defendant would request dismissal of the libel of seizure and condemnation and that defendant regretted occurrence of the error.

9. Plaintiffs now claim damages resulting from the FDA error in the amount of $543,879.96, stemming from four main alleged sources as follows: (1) discing under spinach forced by defendant’s error, $438,593.75; (2) sales of spinach at lower prices in the 1962 and early 1963 summer spinach season due to defendant’s error, $75,633.76; (3) cost of Colorado counsel, $6,651.35; (4) miscellaneous travel, telephone, legal, and other expenses, $23,001.10.

Discing Under and Depressed Prices

10. Spinach grown by plaintiffs is generally of excellent quality and consistently over the 1960-63 period brought higher prices than most other summer spinach, particularly that grown in the New Jersey areas, spinach from the Adirondack district of New York did command higher prices than Mizokami spinach. Because of its quality and tendency to remain fresh, Mizokami spinach is sold mainly to distributors and to firms in the prepackaging industry. The latter wash, grade and make up the spinach in 10- and 20-ounce packages ready for household use. In 1962, three-fourths of plaintiffs’ sales were made to seven customers, six of which were located in New York, Philadelphia, and Boston; the other firm was located in East Hartford, Connecticut, and Buffalo, New York. Hyman Eubin, doing business as South Jersey Produce Exchange, of Williamstown, New Jersey, was one of plaintiffs’ principal customers in 1962. In addition to purchasing spinach on his own account, he served as the eastern distributor or broker for Mizokami spinach.

11.Plaintiffs’ planting, sales, and computations therefrom for the years 1958-65 are as follows:

12. Between August 16 and October 12, 1962, plaintiffs disced under 335 acres of quality spinach. The 262 acres harvested by plaintiffs between August 16 and the end of the 1962 season yielded 105,235 bushels, o,r an average of 401.66 bushels per acre. A similar yield for the 335 acres disced under would have increased plaintiffs’ 1962 production by 134,556 bushels. At a price of $2.22 per bushel, the overall average price for plaintiffs’ spinach in both 1961 and 1963, less harvesting costs of $0.53 per bushel, plaintiffs’ 1962 profit would have increased $227,399.64 had the 335 acres been sold and not disced.

13. Had plaintiffs received $2.22 per bushel, the overall average price for plaintiffs’ spinach in both 1961 and 1963, for the 126,545 bushels harvested and sold from August 10, 1962, through the end of the 1962 season, their sales would have been increased by $49,904.65. [$280,929.90 ($2.22 X 126,545 bu.) less actual sales of $231,025.25.]

14. From the beginning of the 1963 season through July 9, plaintiffs sold 25,320 bushels of spinach at an average price of $1.89 per bushel. During the same period in 1962, plaintiffs sold 9,277 bushels of spinach at an average price of $2.07 per bushel. Had plaintiffs received $2.07 per bushel for the first 25,320 bushels sold in 1963, their sales would have been increased by $4,557.60.

15. Plaintiffs’ evidence demonstrates that from 1957, when the Mizokamis first began extensively supplying the prepackaging industry, through 1965, except for 1962 (after July 16) and early 1963, demand for plaintiffs’ spinach always exceeded the available supply. Plaintiffs, therefore, frequently were required to prorate railroad cars of spinach among customers, filling but a given portion of each order to prevent one customer from gaining advantage over another. Because of its high quality, Mizokami spinach was not actually in price competition with most other spinach. Although plaintiffs increased their spinach acreage from 552 in 1961 to 812 in 1962, such an increment would not in itself have significantly modified price or demand for their spinach. Plaintiff Mike Mizokami’s preseason visit to plaintiffs’ eastern customers in 1962 indicated strong demand for Mizokami spinach and consequent inability to add many new customers. News often travels rapidly in the produce business and the series of FDA stoppages in July and August 1962 had the overall effect of depressing plaintiffs’ business and forcing them to cut prices in order to sell. Ernest LaBarba, of Dallas, Texas, went to a competitor after the July 17 sampling of a shipment to his firm and came back to the Mizokamis only because of dissatisfaction with other spinach. Hyman Rubin was able to handle only 70 cars of Mizokami spinach in 1962 due to customer wariness and his own reluctance to sell a possibly adulterated product, both of which factors stemmed from the FDA stoppages; he otherwise could have handled about 125 cars, a difference of 46,200 bushels. Community Produce of Boston, one of plaintiffs’ seven major customers, stopped buying from plaintiffs for 23 days beginning August 4,1962. This latter hiatus began between interceptions of cars at its Boston siding on August 2 and August 6, 1962. Some of plaintiffs’ customers turned to other Colorado growers, such as Buss and Hayashida.

16. Defendant’s evidence indicates that combined rail and truck unloads of fresh spinach in the New York, Philadelphia, and Boston markets (where six of plaintiffs’ seven main customers are located) dropped some 37 percent over the period 1959-65, thus allegedly demonstrating a general decline in the consumption of fresh spinach. Though price and supply statistics for the New York wholesale market fail to establish the proposition, a marketing and acreage guide issued by the Agricultural Marketing Service of the Department of Agriculture in February 1962 noted that Colorado spinach had benefited in 1961 from heat damage to the fall harvest of eastern spinach. The guide went on to recommend an increase in Colorado spinach acreage of 5 percent for 1962 and a resultant supply in line with recent years. Since combined rail and truck unloads of fresh spinach from all areas in the New York, Philadelphia, and Boston markets increased about 7 percent from the summer spinach season (June-October) of 1961 (557 cars) to the summer season of 1962 (596 cars), defendant concludes that the Agricultural Marketing Service recommendation was ignored and exceeded by Colorado growers, thus causing a market decline.

Further, in a 1-year spinach operation, George Buss, of Center, Colorado, shipped some 57,224 bushels in 1962 and obtained prices near those received by plaintiffs. Neither Daniel J. Storey, a Philadelphia customer then buying Mizo-kami spinach through Hyman Bubin, nor Earlis B. Mead, market reporter for the Consumer and Marketing Service of the Department of Agriculture in New York City, was contemporaneously aware of the FDA -stoppages of plaintiffs’ spinach during July and August 1962. Sales of plaintiffs to their seven largest customers, whose purchases constituted three-fourths of their 1962 business, dropped about 8 percent from 1961 (143,676 bu.) to 1962 (131,709 bu.). Between August 20 and September 24,1962, the date of FDA’s letter of apology, plaintiffs sold 81,744 bushels of spinach, as compared with 79,030 in. a similar period for 1961 and 67,404 for 1963. Plaintiffs’ prices rose moderately between August 10 and September 24,1962.

17. Further examination of plaintiffs’ sales figures discloses that in the July 16-September 3 period, however, plaintiffs sold only 62,058 bushels in 1962, as against 78,847 bushels for that interval in 1961 and 77,307 bushels in 1963. The July 16 date corresponds with the first FDA interception, while an ending date later than September 3 is inappropriate for analogical purposes because plaintiffs’ 1961 sales were curtailed by an early snowstorm on September 3 and because plaintiffs were hampered by white rust disease problems in the latter part of the 1963 season, whereas weather in 1962 remained excellent through most of October, and no disease problems were encountered. It is further to be noted that plaintiffs planted nearly half again as much spinach in 1962 as in 1961 or 1963 and, therefore, not only sold less during the period July 16-September 3, 1962, but also had considerably more acreage to be sold.

The fact that the price of plaintiffs’ spinach rose from about $1.75 per bushel on August 10, 1962, to about $2 per bushel by September 24,1962, is of little avail to defendant. The occurrence of an increase in price does not in logic refute plaintiffs’ claim that the actions of defendant had a depressive effect on their business, in that prices, while gradually rising, were still well below the levels reasonably expected by plaintiffs for their 1962 crop. Plaintiffs’ evidence indicates that ’a reasonable price for the crop would have been about $2.25 per bushel until August 15 and $2.50-$2.75 thereafter. Indeed, comparison of prices for the August 10-September 24 period over the years 1958-62 shows not only that prices for that interval in 1962 began and ended lower than in most other years, but also that the gradual overall increase which did occur was smaller than usual.

18. It is concluded that, but for the erroneous FDA determinations, plaintiffs could have sold the 126,545 bushels harvested from August 10, 1962, through the end of the 1962 season at $2.22 per bushel, or $49,904.65 more than actually received, and that plaintiffs could likewise have harvested and sold at the same price some 134,556 bushels from the 335 acres disced under for a profit concluded that the depressive effect of defendant’s actions on plaintiffs’ business continued into the early part of the 1963 season and reduced plaintiffs’ revenue by $4,557.60 in that period.

Colorado Counsel

19. Whitford W. Myers, plaintiffs’ Colorado counsel, devoted about 165 office hours and 31 days of travel time to plaintiffs’ heptachlor problem with the FDA, a reasonable charge for such services being $15 an hour and $150 per day, respectively. Of this work, 55 hours of office time and 2 days of travel time were expended prior to the FDA letter of apology. The remainder was used in examining the possibility of a Tort Claims Act action, reestablishing satisfactory relations with eastern customers, and preparation and prosecution of plaintiffs’ endeavor to obtain legislative relief, which endeavor culminated in the jurisdictional bill upon which the present suit is founded. Mr. Myers is also due $176.35 in reimbursement of some of the incidental expenses incurred by him during his work for plaintiffs. Plaintiffs made payments to Mr. Myers of $400 in October 1962 and $250 in January 1964 for legal services erroneously claimed under miscellaneous travel expenses. Total allowable costs for plaintiffs’ Colorado counsel arising from defendant’s erroneous determination are $7,301.35.

Miscellaneous Expenses

20. The f.o.b. price of the erroneously condemned 418 bushels of spinach, together with a proportionate share of freight, icing, and detention charges, amounted to $1,591.30, in which sum Muller Foods Company was reimbursed by plaintiffs.

Plaintiffs incurred expenses of $146.18 in connection with the FDA hearing in Denver on August 30,1962.

The analysis of a sample of the condemned spinach by William It. Bradley and Associates, chemists, of Newark, New Jersey, cost $185.

Plaintiffs expended $315.60 through June 1963 on telephone calls to counsel, customers, and chemists and other matters related to the heptachlor problem. Telephone expense from July 1963 through June 1964 amounted to an additional $221.36.

Verling C. Entemann, of Newark, New Jersey, represented plaintiffs in the libel action initiated by defendant on August 14,1962, at a cost of $861.

As a result of the FDA’s erroneous determination, plaintiffs expended $9,490.65 on additional travel and related expenses between October 1962 and October 6, 1964, to bolster customer relations, to confer with FDA and with counsel, and to seek legislative relief.

Total allowable miscellaneous expenses sustained by plaintiffs as a result of the erroneous determination by defendant are $12,811.09.

21. Plaintiffs ordinarily disc fields under once after harvesting and seek $1,507.50 as damages for having to perform two extra discings on the 335 acres not harvested in 1962. The evidence, however, fails to establish satisfactorily either the fact or the amount of any such expense.

22. Because of the FDA stoppages in July and August 1962, Hyman Rubin incurred losses aggregating $5,437.06 on four cars of Mizokami spinach which he had to hold and was unable to resell in their entirety. There is no acceptable proof of any legal obligation by plaintiffs to reimburse Rubin for any spinach he could not sell and no proof that plaintiffs suffered any loss or damages as a result of the $5,437.06 loss.

Ultimate FINDING

23. The weight of the credible evidence establishes that plaintiffs suffered damages arising from the erroneous determination by defendant in 1962 that spinach grown by plaintiffs was contaminated by the pesticide heptachlor and that those damages are as follows:

$227,399-64 arising from the discing under of 134,556 bushels at $2.22 per bushel less harvesting cost of $0.53 per bushel. [Findings 12,18.]

49,904.65 depressed prices in 1962 arising from defendant’s action.

[$280,929.90 (126,545 bushels at $2.22) less actual sales of

$231,025.25 (findings 13, 18).]

4,557.60 depressed prices in 1963 arising from defendant’s action. [25,320 bushels x $0.18 ($2.07 potential price less $1,89 actual price) (findings 14,18). ]

7,301.35 Colorado counsel. [165 hours at $15; 31 days of travel time at $150; reimbursable expenses of $176.35 (finding 19).]

12,811.09 miscellaneous expenses. [Finding 20.]

$301,974.33 total.

CONCLUSION OF LAW

Upon the foregoing findings of fact and opinion, which, are adopted by the court and made a part of the judgment herein, the court concludes as a matter of law that the plaintiffs are entitled to recover of and from the United States and judgment is therefore entered for plaintiffs in the amount of three hundred and one thousand nine hundred and seventy-four dollars and thirty-three cents. ($301,974.33). 
      
      
        United, States v. Central Eureka Mining Co., 357 U.S. 155 (1958) ; United States v. Alcea Band of Tillamooks, 329 U.S. 40 (1946) ; Northwestern Bands of Shoshone Indians v. United States, 324 U.S. 335 (1945) ; Erwin v. United States, 97 U.S. 392 (1878) ; Aragona Constr. Co. v. United States, 165 Ct. Cl. 382 (1964) ; Hempstead Warehouse Corp. v. United States, 120 Ct. Cl. 291, 98 F. Supp. 572 (1951) ; Coos Bay Indian Tribe v. United States, 87 Ct. Cl. 143 (1938), cert. denied, 306 U.S. 653 (1939) ; Duwamish Indians v. United States, 79 Ct. Cl. 530 (1934), cert. denied, 295 U.S. 755 (1935) ; Assiniboine Indian Tribe v. United States, 77 Ct. Cl. 347 (1933), appeal dismissed, cert. denied, 292 U.S. 606 (1934).
     
      
      
        Cherokee Nation v. United States, 270 U.S. 476 (1928).
     
      
       U.S. Const, art. I, § 8. If Congress had not Intended to admit liability, It could, and doubtless would, Rave referred tbe bill pursuant to the congressional reference procedures, 28 U.S.C. §§ 1492, 2509, for advice on the equitable right, if any, of plaintiffs to recover.
     
      
       The court there referred to “the general rule that attorneys fees are not allowed In suits against the united States in the absence of an express statutory provision allowing them * * [112 Ct. Cl. at 432.] This was a termination claim arising under the Contract Settlement Act which did not provide for attorneys’ fees. See also Rash v. United States, 175 Ct. Cl. 797, 810-11, 360 F. 2d 940, 947 (1966).
     
      
       Plaintiffs paid Mr. Myers $650 and seek $6,651.35 in their claim for Colorado counsel expense. The larger sum allowed includes the $650 and accordingly deletes it from plaintiffs’ claim for miscellaneous expense to avoid duplication and for uniformity.