Dorking Genetics v. U.S.

• Citation: 76 F.3d 1261
• Decision Date: 02 February 1996
• Docket Number: No. 1062,D,1062
• Parties: DORKING GENETICS, a Zimbabwean partnership c/o Dorking Farm Concession, Zimbabwe and Ian Arthur King, a Zimbabwean citizen c/o Dorking Farm Concession, Zimbabwe, Plaintiff-Appellants, v. UNITED STATES of America and David A. Evans, D.V.M., individually, and in his capacity as an employee of the United States of America, acting on its behalf, Defendants-Appellees. ocket 94-6193.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Page 1261

76 F.3d 1261

64 USLW 2508

DORKING GENETICS, a Zimbabwean partnership c/o Dorking Farm

Concession, Zimbabwe and Ian Arthur King, a

Zimbabwean citizen c/o Dorking Farm

Concession, Zimbabwe, Plaintiff-Appellants, v. UNITED STATES of America and David A. Evans, D.V.M.,

individually, and in his capacity as an employee

of the United States of America, acting

on its behalf, Defendants-Appellees.

No. 1062, Docket 94-6193.

United States Court of Appeals, Second Circuit.

Argued March 9, 1995.

Decided Feb. 2, 1996.

Jack P. Janetatos, Washington DC (Stuart M. Weitz, Baker & McKenzie, Washington, DC, of counsel), for appellants.

Phyllis J. Pyles, Washington, DC (Daniel R. Unumb, U.S. Department of Justice, Washington, DC, of counsel), for appellee United States.

Shirley K. Kirchberger, Kirchberger & Bender, Buffalo, NY, for appellee Evans.

Before: MAHONEY, WALKER, and LEVAL, Circuit Judges.

WALKER, Circuit Judge:

Plaintiffs Dorking Genetics and Ian King (together "Dorking") appeal from orders of the United States District Court for the Northern District of New York (Constantine G. Cholakis, District Judge ) dismissing their complaint against defendants the United States and Dr. David A. Evans. Dorking alleged in its complaint that the United States was negligent in certifying that cattle Dorking purchased in New York for export to Zimbabwe met that country's health requirements. Dorking also alleged that Dr. Evans, the veterinarian who examined the cattle, committed malpractice by failing to detect and report that the cattle had been exposed to bovine leucosis. According to the complaint, the defendants' acts and omissions proximately caused the destruction of most of Dorking's entire herd of cattle after Zimbabwean authorities discovered that an imported heifer had bovine leucosis.

The district court dismissed the claim against the United States because claims for negligent misrepresentation are not actionable under the Federal Tort Claims Act ("FTCA"), 28 U.S.C. §§ 2671, et seq. It also denied leave to amend the complaint as futile since Dorking's proposed amended claims were barred by the discretionary-function exception to governmental liability under the FTCA. 28 U.S.C. § 2680(a). Finally, the district court dismissed Dorking's claim against Dr. Evans on the ground that Dorking could not prove a relationship sufficiently close to privity of contract. Dorking filed this appeal.

BACKGROUND

On a motion directed to the pleadings, we must take as true the facts as alleged in the complaint. Dorking Genetics is a Zimbabwean partnership engaged in breeding cattle with certain genetic profiles. Ian King, a Zimbabwean citizen, is a general partner in Dorking Genetics as well as the owner of a dairy farm which conducts a genetic breeding program separate from Dorking Genetics.

Representing his own interests and those of Dorking Genetics, King traveled on an unspecified date to the United States to purchase cattle suitable for breeding. King selected three heifers from the Mansion Valley Estate Farm ("Mansion Valley") in De Lancey, New York. Dr. Evans, a veterinarian who is authorized and accredited by the United States Department of Agriculture ("USDA") to certify cattle for export, conducted tests on the heifers. The three heifers tested positive for bovine leucosis and were not purchased.

Subsequently, David Rama, who worked for a cattle broker, selected three different heifers on Dorking's behalf from the same herd as the previous three. Mansion Valley contracted with Dr. Evans, on behalf of Dorking, to test the cattle for certain diseases and to issue a United States Origin Health Certificate. The three heifers selected by Rama tested negative for bovine leucosis, even though they had been exposed to the heifers who had previously tested positive for that disease. Dr. Evans prepared a health certificate incorporating specific Zimbabwean health requirements for imported cattle, including the requirement that the cattle come from a herd with no history of bovine leucosis. Dr. Evans certified that these heifers met that requirement. He then forwarded the certificate and blood tests to Dr. Gerald F. Toms, a USDA veterinarian, who reviewed the certificate and endorsed it. Drs. Toms and Evans also executed a separate Zimbabwean Import Permit, which stated that there was no history of bovine leucosis in the herd of origin. Both Dr. Evans and Dr. Toms knew that the first three heifers from the Mansion Valley herd had tested positive for bovine leucosis.

In May 1987, Dorking imported the second set of three heifers into Zimbabwe. In February 1989, one of the heifers began to display clinical symptoms of bovine leucosis and subsequently tested positive for that disease. This was the first appearance of bovine leucosis in Zimbabwe. The Zimbabwean Veterinary Department immediately placed Dorking Farm under quarantine, allowing only cattle marked for slaughter to leave the farm. Because of the outbreak of bovine leucosis in the herd, Dorking had to slaughter the cattle. The slaughter price was far below the price the cattle would have fetched as healthy breeding stock, resulting in substantial monetary losses.

DISCUSSION

I. Dorking's Negligence Claim Against the United States

"Absent a waiver, sovereign immunity shields the Federal Government and its agencies from suit." FDIC v. Meyer, --- U.S. ----, ----, 114 S.Ct. 996, 1000, 127 L.Ed.2d 308 (1994). Since "[s]overeign immunity is jurisdictional in nature," the United States may only be sued with its consent. Id. In the Federal Tort Claims Act ("FTCA"), Congress has given a limited consent for the federal government to be sued for tort liability: "The United States [with certain stated exceptions] shall be liable, respecting the provisions of this title relating to tort claims, in the same manner and to the same extent as a private individual under like circumstances." 28 U.S.C. § 2674. The [T]he district courts ... shall have exclusive jurisdiction of civil actions on claims against the United States, for money damages, ... for injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred.

statutory provision regarding the jurisdictional grant over FTCA cases, 28 U.S.C. § 1346(b), further provides,

If a claim is cognizable under § 1346(b), that statute provides the exclusive remedy. Meyer, --- U.S. at ----, 114 S.Ct. at 1001. A claim is cognizable under § 1346(b) if it is actionable thereunder, i.e., if it alleges the six elements of that provision. Thus, the claim must be " ' against the United States, for money damages, ... for injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred.' " Id. (quoting 28 U.S.C. § 1346(b)). Unless the claim is saved by some other waiver of sovereign immunity, see id. at ---- - ----, 114 S.Ct. at 1001-02; Hatzlachh Supply Co. v. United States, 444 U.S. 460, 462-63, 100 S.Ct. 647, 649, 62 L.Ed.2d 614 (1980), a claim which fails to state all six elements of § 1346(b) or which is otherwise excepted from § 1346(b), see 28 U.S.C. § 2680, must be dismissed for lack of subject matter jurisdiction. Fazi v. United States, 935 F.2d 535, 537 (2d Cir.1991).

The district court dismissed Dorking's claim against the government. In the district court's view, the alleged negligent acts caused the heifers' herd history to be misrepresented in the Health Certificate, and an action for misrepresentation is not cognizable under the FTCA. See 28 U.S.C. § 2680(h). Dorking then filed for leave to amend the complaint under Federal Rule of Civil Procedure 15(a) to state that the United States breached a separate duty to prevent the export of cattle exposed to certain diseases. Finding the proposed amended claim barred by the discretionary-function exception to the FTCA, 28 U.S.C. § 2680(a); United States v. Gaubert, 499 U.S. 315, 322-25, 111 S.Ct. 1267, 1273-75, 113 L.Ed.2d 335 (1991), the district court denied the motion as futile. On appeal, Dorking argues that the denial of the motion to amend was error because breach of the duty to prohibit the export of cattle exposed to bovine leucosis was distinct from the tort of misrepresentation and was not covered by the discretionary-function exception. Although we agree with Dorking that its action is not barred by the misrepresentation exception, we hold that the breach of such a duty, assuming it existed, is not cognizable under the FTCA. Thus, the district court properly dismissed Dorking's claim against the United States for lack of subject matter jurisdiction. Therefore, we do not reach the question of whether Dorking's claim would also be barred on the ground that the decision to prohibit export of cattle exposed to bovine leucosis is a "discretionary function" under 28 U.S.C. § 2680(a).

A. Misrepresentation Exception

Congress has specified that its waiver of sovereign immunity in § 1346(b) of the FTCA does not apply to "[a]ny claim arising out of ... misrepresentation." 28 U.S.C. § 2680(h). This exception "applies to claims arising out of negligent, as well as intentional, misrepresentation." Block v. Neal, 460 U.S. 289, 295, 103 S.Ct. 1089, 1092, 75 L.Ed.2d 67 (1983). The misrepresentation exception bars not only claims of negligence in the misrepresentation, but in the conduct underlying the misrepresentation. United States v. Neustadt, 366 U.S. 696, 706-07, 81 S.Ct. 1294,...