Court Opinion

ID: 4104172
Source: CourtListenerOpinion
Date Created: 2016-12-02 20:01:10.142256+00
Date Added: 2024-06-11T12:17:06.357523
License: Public Domain

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.

                              2
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

                                                3
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

                                               4
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.

                                                  6
                                              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

                                               7
(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

                                                8
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

                                       10
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)).

                                           11
“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

                                         12
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

                                       13
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).

                                          14
      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.

                                              17
                                        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

                               19