Court Opinion

ID: 185360
Source: CourtListenerOpinion
Date Created: 2011-02-05 02:31:05+00
Date Added: 2024-06-11T12:37:00.713956
License: Public Domain

236 F.3d 756 (D.C. Cir. 2001)
Leon Sloan and Jimmie Lee Furby, Appellants,v.United States Department of Housing and Urban Development, Appellee.
No. 99-5145
United States Court of Appeals  FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 11, 2000Decided February 2, 2001

Appeal from the United States District Court  for the District of Columbia (No. 98cv1201)
James K. Kearney argued the cause for appellants.  With  him on the briefs were James P. Gallatin, Jr., David T.  Hickey, and Andrew J. Hungerman IV.
Scott S. Harris, Assistant United States Attorney, argued  the cause for appellee.  With him on the brief were Wilma A. Lewis, United States Attorney, and R. Craig Lawrence, Assistant United States Attorney.
Before:  Edwards, Chief Judge, Henderson and Garland,  Circuit Judges.
Opinion for the court filed by Circuit Judge Garland.
Garland, Circuit Judge:

1
Plaintiffs Leon Sloan and Jimmie  Lee Furby appeal from the dismissal of their Federal Tort  Claims Act (FTCA) complaint against the United States  Department of Housing and Urban Development (HUD). We find that, in light of the discretionary function exception  to the FTCA, the district court properly concluded that it  lacked jurisdiction to entertain plaintiffs' complaint.

2
* Sloan and Furby were partners in a contracting business,  J&L Renovation Company (J&L).  In 1993, J&L won a  subcontract for interior demolition as partof the rehabilitation of Burns Heights, a public housing project located in  Duquesne, Pennsylvania, and owned by the Allegheny County  Housing Authority (ACHA).  HUD provided ACHA with  funds for the project.

3
HUD's Office of Inspector General (OIG) began to investigate the Burns Heights project in late 1994, after another  contractor alleged that J&L was not complying with lead based paint abatement requirements.  OIG auditor Mark  Chandler was assigned to conduct a performance audit of the  project.  In November 1994, Chandler and HUD attorney  Dane Narode visited Burns Heights and observed demolition  techniques that would have been unacceptable in a project  involving lead-based paint--including the failure to contain  dirt, dust, and paint chips.  Chandler and Narode also visited  a landfill, situated about 300 feet from the Monongahela  River, where J&L had been taking plaster debris from Burns  Heights.  The landfill was not approved for the dumping of  plaster, as then-applicable Pennsylvania regulations required; moreover, had the plaster been contaminated with lead paint,  its dumping would have created a health hazard.  When the operator of the landfill discovered the investigators, he chased  them off the site and allegedly threatened to "blow [Narode's]  head off."  During a subsequent visit to the site, the investigators observed the operator burying the debris.

4
Chandler then interviewed David McLean, Director of  Maintenance and Development for ACHA, who told Chandler  that Burns Heights was a lead-based paint abatement project. ACHA's records, however, indicate that McLean was mistaken.  Those records reflect that in 1992-93, several tests had  been performed to determine the lead content of debris and  air at Burns Heights;  the tests indicated the absence of  hazardous lead levels.  The records further reflect that after  receiving those test results in 1993, ACHA agreed that there  was no need for its contractors and subcontractors to follow  hazardous lead-based paint protocols at Burns Heights or to  dispose of demolition debris as contaminated waste.

5
Although ACHA provided Chandler with copies of the lead  tests, Chandler was not qualified to interpret the results. Nor did he further inquire as to their meaning or speak with  J&L regarding the scope of work under the demolition subcontract.  Chandler's final audit report, which was issued by  the OIG in October 1995, found that ACHA had not ensured  compliance with lead-based paint abatement requirements  during the interior demolition of the Burns Heights buildings. The report did not mention any contractors or subcontractors  by name. OIG, HUD, Report No. 96-AO-209-1804, Review of  Contracted Lead-Based Paint Activities:  ACHA, Pittsburgh,  PA (1995) [hereinafter Audit Report].

6
On August 18, 1995, before completing the audit, HUD  notified Sloan, Furby, and J&L that it was suspending them  from all HUD-related government contracting work, pending  further proceedings that might debar them from such work  for five years.  The notice, issued by HUD's Assistant Secretary for Public and Indian Housing, based the suspension and  proposed debarment on three "serious irregularities in  [J&L's] business dealings with the government":

7
1. mproper cleanup of waste from the lead-based paint abatement process;

8
2. Improper disposal of construction debris from the demolition work;  [and]

9
3. Failure to adhere to contract requirements or HUD guidelines with respect to ... hazardous waste....

10
Letter from Asst. Sec'y Joseph Shuldiner to Leon Sloan, Sr.  (Aug. 18, 1995).

11
Sloan and Furby invoked their right to an administrative  hearing to contest these charges.  During the proceeding, the  government withdrew the third charge as unsupported by the  evidence, and the Administrative Law Judge (ALJ) dismissed  the first for the same reason.  In re Sloan, HUDBCA No.  96-C-106-D3, at 11-12 (Aug. 30, 1996), 1996 WL 506267. The ALJ upheld the second charge, although she did so only  because J&L had dumped the debris in an unapproved site,  and not because it posed an environmental hazard.  Because  she found no environmental hazard, the ALJ rejected HUD's  request for debarment and terminated the suspensions.  Id.  at 12-13.  She declined, however, to grant plaintiffs' request  to void the suspensions ab initio.  Id. at 14.  The Secretary  of HUD affirmed the ALJ's decision.  In re Sloan, HUDBCA  No. 96-C-106-D3 (Dec. 18, 1996).

12
Thereafter, Sloan and Furby filed complaints in the district  court, seeking injunctive and declaratory relief under the  Administrative Procedure Act (APA), 5 U.S.C. S S 702-03, and  damages for constitutional torts under Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics,  403 U.S. 388 (1971).  Those actions were consolidated and  subsequently dismissed by the district court.  On appeal, this  court affirmed the dismissal of the Bivens claim (on grounds  other than those relied upon by the district judge), but  reversed HUD's refusal to void the suspensions ab initio as  arbitrary and capricious under the APA.  Sloan v. Dep't of  Hous. & Urban Dev., 231 F.3d 10, 12 (D.C. Cir. 2000).

13
On May 13, 1998, Sloan and Furby filed a separate action  for money damages under the FTCA, 28 U.S.C. S S 1346(b),  2671 et seq., alleging that HUD had negligently conducted the  audit of Burns Heights.  According to the complaint, HUD's investigation was conducted in a manner that violated the  laws and professional standards governing auditors, and that  amounted to negligence and professional malpractice under  District of Columbia law.  HUD moved to dismiss, asserting  that the discretionary function exception to the FTCA, 28  U.S.C. S 2680(a), deprived the court of subject matter jurisdiction.  The district court agreed and granted the motion.

II

14
On appeal, we review the dismissal of the plaintiffs' FTCA  complaint de novo, Moore v. Valder, 65 F.3d 189, 196 (D.C.  Cir. 1995), and "accept all of the factual allegations in [the]  complaint as true,"  United States v. Gaubert, 499 U.S. 315,  327 (1991) (quoting Berkovitz v. United States, 486 U.S. 531,  540 (1988)).  The FTCA grants federal district courts jurisdiction over claims arising from certain torts committed by  federal employees in the scope of their employment, and  waives the government's sovereign immunity from such  claims.  28 U.S.C. S S 1346(b), 2674.  The grant of jurisdiction  and waiver of immunity are subject to a number of express  exceptions.  See 28 U.S.C. S 2680.  The exception at issue  here, the discretionary function exception, is for "any claim  ... based upon the exercise or performance or the failure to  exercise or perform 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."  28 U.S.C.  S 2680(a).  If the discretionary function exception applies, the  district court lacks subject matter jurisdiction over the case. See Cope v. Scott, 45 F.3d 445, 448 (D.C. Cir. 1995).

15
In United States v. Gaubert, the Supreme Court set forth a  two-part test for determining whether a challenged government action is protected as a discretionary function.  First,  the exception "covers only acts that are discretionary in  nature, acts that 'involv[e] an element of judgment or  choice.' "  Gaubert, 499 U.S. at 322 (quoting Berkovitz, 486 U.S. at 536).  This "requirement of judgment or choice is not  satisfied if a 'federal statute, regulation or policy specifically prescribes a course of action for an employee to follow.' " Gaubert, 499 U.S. at 322 (quoting Berkovitz, 486 U.S. at 536).

16
Second, even if "the challenged conduct involves an element  of judgment," that judgment must be "of the kind that the  discretionary function exception was designed to shield." Gaubert, 499 U.S. at 322-23 (quoting Berkovitz, 486 U.S. at  536).  Because the exception was designed 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,' " the Court concluded that  "the exception 'protects only governmental actions and decisions based on considerations of public policy.' "  Gaubert, 499 U.S. at 323 (quoting Berkovitz, 486 U.S. at 537).

III

17
In the district court, Sloan and Furby argued that neither  HUD's investigation, nor its decision to suspend plaintiffs  from government contract work, is a discretionary act exempt  from challenge under the FTCA.  On appeal, plaintiffs no  longer press the latter argument, apparently conceding that  the decision to suspend is covered by the discretionary function exception.  Appellants' Br. at 28.  We have no doubt that  it is, but discuss the suspension in some detail because it is  relevant to our analysis of the status of HUD's investigation,  set forth in Part IV below.

18
The decision to initiate a prosecution has long been regarded as a classic discretionary function.  See, e.g., Moore, 65 F.3d at 197 ("[A]ctions that require the prosecutor to exercise  his professional judgment ... are ... quintessentially discretionary.");  Gray v. Bell, 712 F.2d 490, 513 (D.C. Cir. 1983)  ("Prosecutorial decisions as to whether, when and against  whom to initiate prosecution are quintessential examples of  government discretion ....");  General Dynamics Corp. v.  United States, 139 F.3d 1280, 1283 (9th Cir. 1998).  In Butz v.  Economou, 438 U.S. 478 (1978), the Supreme Court held that  "agency officials performing certain functions analogous to  those of a prosecutor should," like prosecutors, "be able to  claim absolute immunity" from suits brought under the Constitution.  Id. at 515.  In language equally applicable to suits  brought under the FTCA, the Court said:

19
The decision to initiate administrative proceedings against an individual or corporation is very much like the prosecutor's decision to initiate or move forward with a criminal prosecution. An agency official, like a prosecutor, may have broad discretion in deciding whether a proceeding should be brought and what sanctions should be sought.

20
Id. HUD's decision to suspend plaintiffs, which began a  course of administrative proceedings regarding possible debarment, see 24 C.F.R. S 24.411(e), falls well within this  rubric.

21
That HUD's suspension of plaintiffs is protected by the  discretionary function exception is confirmed by application of  Gaubert's two-part test.  First, the decision to suspend is  plainly discretionary in nature, involving "an element of judgment or choice."  Gaubert, 499 U.S. at 322.  Indeed, the  applicable regulation expressly so states.  See 24 C.F.R.  S 24.115 ("Debarment and suspension are discretionary actions ....").  Although HUD rules require that certain conditions be met before a suspension may issue, see 24 C.F.R.  S 24.400(b) (stating that suspension may be imposed only  when there is "adequate evidence" of specified wrongdoing  and when "[i]mmediate action is necessary to protect the  public interest"), that requirement does not convert the decision into a nondiscretionary act.  Determining whether those  broadly stated conditions exist involves substantial elements  of judgment.  See 24 C.F.R. S 24.400(c) ("In assessing the  adequacy of the evidence, the agency should consider how  much information is available, how credible it is given the  circumstances, whether or not important allegations are corroborated, and what inferences can reasonably be drawn as a  result.");  cf. Gaubert, 499 U.S. at 329 (holding that Federal  Home Loan Bank Board had discretion regarding appointment of receiver notwithstanding that governing statute "enumerated specific grounds warranting an appointment," because "the determination of whether any of these grounds existed depended upon the opinion of the Board" (internal  quotation omitted)).

22
The HUD regulation's express delegation of discretion to  the suspending official may also, alone, satisfy Gaubert's  second requirement--that the challenged action be based on  considerations of public policy.  "When established governmental policy, as expressed or implied by statute, regulation,  or agency guidelines, allows a Government agent to exercise  discretion," Gaubert held, "it must be presumed that the  agent's acts are grounded in policy when exercising that  discretion." 499 U.S. at 324.  But it is hardly necessary to  rely on such a presumption here.  HUD's regulations place  public policy at the forefront of the decision of the suspending  official.  The official must determine, for example, whether  the contractor's violations are "so serious as to affect the  integrity of an agency program," 24 C.F.R. S 24.305(b), and  whether "[i]mmediate action is necessary to protect the public  interest," 24 C.F.R. S 24.400.  See also 24 C.F.R. S 24.115  (stating that "[i]n order to protect the public interest, it is the  policy of the Federal Government to conduct business only  with responsible persons," and that debarment and suspension "are appropriate means to implement this policy").  As  the decision to suspend a contractor is therefore "grounded in  the policy of the regulatory regime," Gaubert, 499 U.S. at 325,  it is protected by the discretionary function exception.

IV

23
Apparently recognizing that suspension itself is a discretionary function, plaintiffs focus their primary attention not  on the suspension but on the investigation and audit that  preceded it.  Although suspension may be discretionary, they  argue, standards of professional practice constrain HUD's  auditors during the investigatory phase and preclude application of the discretionary function exception.

24
This argument fails for two reasons.  First, it is impossible  to sever HUD's investigation from the subsequent suspension  in the way plaintiffs urge.  Second, even if the investigation could be severed, it, too, constitutes a discretionary function  under Gaubert.

25
* In Gray v. Bell, we held that where the "allegation of  improper investigatory conduct is inextricably tied to the  decision to prosecute and the presentation of evidence," the  discretionary function exception applies and preserves governmental immunity.  712 F.2d 490, 516 (D.C. Cir. 1983);  see  Moore, 65 F.3d at 196-97;  Ernst v. Child & Youth Servs. of  Chester County, 108 F.3d 486, 488-89 (3d Cir. 1997).  Gray  involved a suit brought by Acting FBI Director L. Patrick  Gray III.  Gray had been investigated and then indicted for  allegedly authorizing warrantless searches of the homes of  friends and relatives of Weatherman Underground fugitives. After the government agreed to dismiss the indictment, Gray  sued the prosecutors for the "improper, tortious, and constitutionally defective manner in which [the] investigation was  carried out." 712 F.2d at 515.  In particular, he contended  that the Justice Department had conducted a grossly negligent pre-indictment investigation, and, as a result, failed to  present exculpatory evidence and instead presented false and  misleading evidence to the grand jury.  Id. at 495, 516.

26
On appeal, this court concluded that Gray's suit was barred  by the FTCA's discretionary function exception, because  there was "no meaningful way in which the allegedly negligent investigatory acts could be considered apart from the  totality of the prosecution."  Id. at 516.  The "gist of Gray's  complaint," we said, focused "on alleged causal links between  the negligent investigation, the presentation of false and  misleading evidence, and the ultimate prosecution."  Id.  Under those circumstances, "[s]eparating allegations in the complaint that focus on the investigation from the ultimate prosecution merely would elevate the form of Gray's complaint  over its essence."  Id.

27
In this case, as in Gray, the challenged investigation is  inextricably tied to the discretionary, quasi-prosecutorial decision to suspend plaintiffs from governmental contracting. The complaint does not allege any damages arising from the investigation itself, but only harm caused by the suspension to  which it assertedly led.  See First Am. Compl. p 200 (reciting  that plaintiffs were damaged by having to challenge wrongful  suspension, defend in debarment proceeding, and appeal  HUD decision);  id. p 201 ("Sloan and Furby were further  actually damaged because during the period of their wrongful  suspension they were prevented from obtaining any contract  work from HUD, were prevented from obtaining other contract work as a result of the wrongful suspension and suffered in standing and professional reputation." (emphasis  added)).  At oral argument, plaintiffs were given a further  opportunity to disentangle the investigation and suspension  by proffering an amendment to the complaint that would  allege some harm arising from the investigation that was  separate from the suspension itself;  they were unable to do  so.  Because the allegedly improper investigation thus caused  no injury "distinct from the harm caused by the ultimate  prosecution itself," the former is not "sufficiently separable  from [the] protected discretionary decision[ ]" and "cannot by  itself support suit under the FTCA."  Gray, 712 F.2d at 515; see General Dynamics, 139 F.3d at 1285-86 (holding discretionary function exception protected Defense Department  audit where harm to plaintiff arose from subsequent criminal  prosecution).

B

28
Even if HUD's investigation of the Burns Heights project  were not inextricably linked to the plaintiffs' suspension, that  investigation would nonetheless constitute a discretionary  function under the Gaubert test.  We consider the two elements of that test below.

29
* First, the sifting of evidence, the weighing of its significance, and the myriad other decisions made during investigations plainly involve elements of judgment and choice.1  That  the conduct at issue here was undertaken by investigators  and auditors rather than by Assistant Secretaries is irrelevant.  In United States v. Varig Airlines, 467 U.S. 797 (1984),  for example, the Federal Aviation Administration (FAA) had  established a regulatory regime of "spot checking" airplanes  for compliance with safety standards.  As the Supreme Court  later explained in Gaubert, Varig "held that not only was this  act discretionary but so too were the acts of agency employees in executing the program since they had a range of  discretion to exercise in deciding how to carry out the spotcheck activity."  Gaubert, 499 U.S. at 325 (citing Varig, 467 U.S. at 820).  The discretionary function exception, the Court  held, does not apply "exclusively to policymaking or planning  functions," but rather extends as well to decisions made at  the operational level. 499 U.S. at 325.

30
Plaintiffs insist that the Burns Heights investigation differs  from others because it took the form of an "audit."  "[T]he  actions of government auditors are not discretionary," plaintiffs argue, "because compliance with federal audit guidelines  ismandatory."  Appellants' Br. at 14.2  It is true that the  Inspector General Act of 1978 commands OIG auditors to  "comply with standards established by the Comptroller General of the United States for audits of Federal ... programs,  activities, and functions."  5 U.S.C. app. 3, S 4(b)(1)(A).  But  it is also clear that the auditing standards that plaintiffs  contend HUD transgressed leave ample room for the exercise  of professional judgment.  See Gen. Accounting Office, Gov't Auditing Standards, at chs. 3, 6 (June 1994) [hereinafter Gov't  Auditing Standards];  cf. Thor Power Tool Co. v. Comm'r of  Internal Revenue, 439 U.S. 522, 544 (1979) ("Accountants  long have recognized that 'generally accepted accounting  principles' are far from being a canonical set of rules that will  ensure identical accounting treatment of identical transactions. 'Generally accepted accounting principles,' rather, tolerate a range of 'reasonable' treatments, leaving the choice  among alternatives to management." (citation omitted)).3  Indeed, those standards expressly state that "[a]uditors should  use sound professional judgment in determining the standards that apply to the work to be conducted."  Gov't Auditing Standards S 3.29.4

31
Plaintiffs' argument here parallels that made by the plaintiff in Gaubert, who sought damages for the alleged negligence of Federal Home Loan Bank Board (FHLBB) officials  in the day-to-day management of a failing financial institution. Gaubert argued that the FHLBB's actions fell outside the  discretionary function exception "because they involved the  mere application of technical skills and business expertise." 499 U.S. at 331.  The Court rejected that argument, stating  that while "[i]t may be that certain decisions resting on  mathematical calculations, for example, involve no choice or  judgment in carrying out the calculations," the FHLBB's  actions "involved the exercise of choice and judgment" and  hence fell within the exception.  Id.  The same is true here.5

32
As plaintiffs themselves point out, the heart of the auditing  standards is the exhortation that "[d]ue professional care  should be used in conducting [an] audit and in preparing  related reports."  Gov't Auditing Standards S 3.26;  see id.  S 3.28 ("[E]xercising due professional care means using  sound judgment in establishing the scope, selecting the methodology, and choosing tests and procedures for the audit."). Plaintiffs endeavor to turn this point on its head, arguing that  because the use of sound professional judgment by auditors is  mandatory, no discretion is left to them.  The flaw in this  argument is that the Supreme Court has defined a "discretionary act" as "one that involves choice or judgment."  Gaubert, 499 U.S. at 325 (emphasis added);  see Moore, 65 F.3d at  197 (stating that "actions that require the prosecutor to  exercise his professional judgment ... are ... quintessentially discretionary").  Hence, plaintiffs' argument reduces to  nothing more than the untenable contention that auditors lack  discretion because they must exercise it.

2

33
Plaintiffs contend that even if the auditors' conduct does  involve an element of discretion, it "does not implicate considerations of public policy or involve the exercise of political,  social, or economic judgment."  Appellants' Br. at 22.  Therefore, they argue, the audit fails Gaubert's second prong. Again, we disagree.

34
HUD's audit of Burns Heights was part of a national audit  of lead-based paint contracting activities.  See Audit Report  at 2, 4.  Its objective was to determine whether lead-based  paint abatement at the facility was in compliance with the  demolition contract.  Id. at 2.  Pursuant to the same auditing  standards cited by plaintiffs, one of HUD's responsibilities  was to determine "the extent to which the desired results or  benefits established by the legislature or other authorizing  body are being achieved."  Gov't Auditing Standards S 2.7(b). The audit concluded that the housing authority had "not  protected tenants or community residents from potential  health problems from improper lead-based paint removal and  disposal."  Audit Report at 3.  Whether that conclusion is  correct or not, it unquestionably implicates considerations of  public policy.

35
As was true of the first part of the discretionary function  test, satisfaction of the second is not limited to actions taken  at the policy-planning level.  Thus, in Gaubert, the Court held  that the conduct of FHLBB employees "involved the kind of  policy judgment that the discretionary function exception was  designed to shield," notwithstanding that it consisted of day to-day decisions regarding the operations of a savings and  loan.  Id. at 332.  "[T]hose day-to-day 'operational' decisions were undertaken for policy reasons of primary concern to the  regulatory agencies," the Court said, including preservation  of the assets of the institution "for the benefit of depositors  and shareholders."  Id. (citation omitted).  See also Varig, 467 U.S. at 815-820.  The same is true in this case:  the  auditors' decisions were undertaken for policy reasons of  significant concern to HUD, including the protection of tenants living in HUD-funded housing "from potential health  problems from improper lead-based paint removal and disposal."  Audit Report at 3.6  Accordingly, the audit fallsunder  the aegis of the discretionary function exception to the FTCA.

IV

36
Because the discretionary function exception applies to the  agency actions challenged by plaintiffs, the district court  lacked jurisdiction over their FTCA complaint.  The court's  dismissal of the complaint is therefore

37
Affirmed.

Notes:

1
 See Sabow v. United States, 93 F.3d 1445, 1452-53 (9th Cir.  1996);  Black Hills Aviation, Inc. v. United States, 34 F.3d 968,  973-74 (10th Cir. 1994);  Blakey v. U.S.S. Iowa, 991 F.2d 148, 15354 (4th Cir. 1993);  Pooler v. United States, 787 F.2d 868, 870-71 (3d  Cir. 1986).

2
 Although termed an "audit," HUD's investigation was not a  "financial statement audit" designed to determine conformity with  generally accepted accounting principles, but rather a "program  audit"--a variety of "performance audit" intended to assess the  performance of a government program.  Compare Gen. Accounting  Office, Gov't Auditing Standards S 2.4 (June 1994), with id.  S 2.7(b).  See O'Reilly et al., Montgomery's Auditing 23 (11th ed.  1994) (noting that program audits are often not stated "in terms of  economic actions or events" and "may at times stretch the definition  of auditing").

3
 The principal standards that plaintiffs contend HUD violated  are:  Gov't Auditing Standards S 3.3 ("The staff assigned to conduct the audit should collectively possess adequate professional  proficiency for the tasks required.");  S 3.11 ("[T]he audit organization and the individual auditors ... should maintain an independent  attitude and appearance.");  S 3.31 ("Each audit organization ...  should have an appropriate internal quality control system...."); S 6.2 ("Work is to be adequately planned.");  S 6.5(g) ("[A]uditors  should ... [i]dentify potential sources of data that could be used as  audit evidence and consider the validity and reliability of these  data.");  S 6.22 ("Staff are to be properly supervised.");  and S 6.46  ("Sufficient, competent, and relevant evidence is to be obtained to  afford a reasonable basis for the auditors' findings and conclusions."). See generally Moore, 65 F.3d at 197 n.15 (holding that  deciding what is required by regulation directing prosecutors to  disclose "substantial" evidence "directly" negating the guilt of a  suspect "is itself a discretionary act").

4
 See also OIG, HUD, Consolidated Audit Guide for Audits of  HUD Programs S 1-1 (Aug. 1997) ("This guide is not ... intended  to supplant the auditor's judgment of audit work required.");  OMB  Circular A-133, Audits of Institutions of Higher Education and  Other Nonprofit Organizations, 55 Fed. Reg. 10,019, 10,021 (Mar.  16, 1990) ("These principles, to the extent permitted by law, constitute guidance to be applied by agencies consistent with and within  the discretion, conferred by the statutes governing agency action."); Am. Inst. of Certified Pub. Accountants, Codification of Statements on Auditing Standards, AU S 110.04 (1995) ("In the observance of generally accepted auditing standards, the independent  auditor must exercise his judgment in determining which auditing  procedures are necessary in the circumstances to afford a reasonable basis for his opinion.").

5
 This case is readily distinguishable from Appley Brothers v.  United States, 164 F.3d 1164 (8th Cir. 1999), upon which plaintiffs  heavily rely, in which the Eighth Circuit held the discretionary  function exception inapplicable to an Agriculture Department inspector's failure to investigate grain shortages at a warehouse.  The  court noted that "although the inspector had discretion in selecting  how he would investigate," under express regulations "he had no  discretion not to undertake some investigation."  Id. at 1172 (emphasis added).  Plaintiffs' challenge here, by contrast, is to how  HUD investigated at Burns Heights.

6
 This distinguishes the HUD audit from the placement of road  signs by the National Park Service, which we found to involve  engineering rather than policy judgment in Cope, 45 F.3d at 451-52. See Berkovitz, 486 U.S. at 545 (indicating that determinations  involving the "application of objective scientific standards" do not  involve policy judgment and are not covered by the discretionary  function exception);  see also Black Hills Aviation, 34 F.3d at 976  (holding that quick handling of crash investigation to facilitate  Army activities involves policy judgment);  Blakey, 991 F.2d at 153  (holding that course of military investigation "implicates policy  considerations").