Jayvee Brand, Inc. v. U.S.

• Decision Date: 15 November 1983
• Docket Number: No. 82-1167,82-1167
• Citation: 721 F.2d 385
• Parties: JAYVEE BRAND, INC., et al., Appellants, v. UNITED STATES of America, et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 385

721 F.2d 385

232 U.S.App.D.C. 150

JAYVEE BRAND, INC., et al., Appellants, v. UNITED STATES of America, et al.

No. 82-1167.

United States Court of Appeals District of Columbia Circuit.

Argued Oct. 19, 1982.

Decided Nov. 15, 1983.

Appeal from the United States District Court for the District of Columbia (D.C. Civil Action No. 80-00716).

C. Michael Deese, Washington, D.C., with whom Arthur L. Herold and Steven D. Simpson, Washington, D.C., were on brief, for appellants.

Katherine S. Gruenheck, Atty., Dept. of Justice, Washington, D.C., with whom Stanley S. Harris, U.S. Atty., Anthony J. Steinmeyer, Atty., Dept. of Justice, and Mana Jennings, Atty., Consumer Product Safety Commission, Washington, D.C., were on the brief, for appellees. R. Joseph Sher, Atty., Dept. of Justice, Washington, D.C., also entered an appearance for appellees.

Before EDWARDS and BORK, Circuit Judges, and LUMBARD, ^* Senior Circuit Judge, United States Court of Appeals for the Second Circuit.

Opinion for the Court filed by Circuit Judge BORK.

Concurring opinion filed by Circuit Judge HARRY T. EDWARDS.

Concurring opinion filed by Senior Circuit Judge LUMBARD.

BORK, Circuit Judge:

This is a suit for damages brought by manufacturers of children's sleepwear against the United States, the Consumer Product Safety Commission and five individuals formerly members of that Commission. Appellants seek monetary damages for losses they say were caused by Commission regulatory action. We find that the Federal Tort Claims Act does not grant the district court jurisdiction over this suit against the United States and that the individuals are entitled to absolute immunity from the tort claims brought against them under the due process clause of the fifth amendment. We therefore affirm the order of the district court dismissing appellants' complaint.

I.

Appellants are manufacturers of children's sleepwear; they purchase fabric, cut and sew it into garments, and sell the product to wholesalers. In 1971 the Secretary of Commerce issued an apparel flammability standard applicable to appellants' products. 16 C.F.R. Part 1615 (1983). This was followed in 1974 by further standards issued by the Consumer Product Safety Commission ("CPSC" or "Commission"). 16 C.F.R. Part 1616 (1983). In order to comply with these regulations, appellants began purchasing fabric treated with the flame-retardant compound tris (2,3-dibromopropyl) phosphate ("Tris").

In March, 1976, and again in February, 1977, the CPSC received petitions alleging that Tris was a carcinogen and urging safety measures. Responding to these petitions, the Commission obtained data on Tris' carcinogenic effects. On April 8, 1977, the CPSC issued an amendment to 16 C.F.R. Sec. 1500.18(d) (1976), declaring Tris a "hazardous" and "toxic" substance within the meaning of the Federal Hazardous Substances Act, 15 U.S.C. Sec. 1261(f)(1)(A), (g) (1976). 42 Fed.Reg. 18,850-53 (1977). As a result of this finding, the Commission decided that unwashed, Tris-treated garments and fabric intended for sale in children's apparel were "banned hazardous substances" under 15 U.S.C. Sec. 1261(q)(1)(A) (1976). 42 Fed.Reg. 18,853 (1977). Appellant manufacturers were required to repurchase Tris-treated clothing from retailers.

Appellants base their tort claim on procedural infirmities in the Tris ban. Specifically, they claim that the Commission failed to follow the procedures set forth in the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. Sec. 371(e) (1976). The Commission did not provide notice of the proposed ban in the Federal Register, and did not receive the views of affected parties prior to the ban. In Springs Mills, Inc. v. CPSC, 434 F.Supp. 416 (D.S.C.1977), the district court found the Tris ban void because of these irregularities. Id. at 435. According to appellants, the Commission's failure to follow statutorily prescribed procedures damaged them in the amount of approximately $30 million.

On December 30, 1982 (subsequent to oral argument in this case) the President signed into law Pub.L. No. 97-395, 96 Stat. 2001 (the "Tris Act"). Under the Tris Act the Claims Court has jurisdiction over any claim for losses sustained by any producer, manufacturer, distributor, or retailer of children's sleepwear, or by any producer, converter, manufacturer, distributor, or retailer of fabric, yarn, or fiber contained in or intended for use in children's sleepwear, (1) if those losses resulted from the actions taken by the Federal Government under the Federal Hazardous Substances Act of April 8, 1977, and thereafter relating to apparel, fabric, yarn, or fiber containing Tris (2,3-dibromopropyl) phosphate, and (2) if such children's sleepwear or such fabric, yarn, or fiber, as the case may be, at the time of its manufacture was subject to the requirements of or was subject to use in compliance with the mandatory Federal flammability standard FF3-71 or FF5-74.

The Tris Act goes on to prescribe the factors that the Claims Court is to consider in adjudging liability, the method of measuring losses and certain procedural rules for Tris claims.

This suit was brought in the District Court for the District of Columbia against the United States, the CPSC and the individual members of the Commission at the time of the ban. Relief was sought against the United States and the Commission under the Federal Tort Claims Act ("FTCA"), 28 U.S.C. Sec. 2671 et seq. (1976), and 15 U.S.C. Sec. 2053(h) (1976). Appellants claimed that the ban constituted negligence per se under local law as applicable pursuant to the FTCA (Counts I, II and III), that it constituted a taking of property without just compensation in violation of the fifth amendment (Count IV), and that the individual Commissioners' conduct was an actionable denial of the due process of law guaranteed by the fifth amendment (Count V), see Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971).

In the district court, appellees urged dismissal on various grounds: lack of subject matter jurisdiction, failure to state a claim upon which relief could be granted, and lack of personal jurisdiction over the individual defendants. The district court granted the motion, ruling that (1) sovereign immunity bars the tort claims against the United States; (2) the CPSC is not a proper defendant under the FTCA; (3) there is no subject matter jurisdiction over the taking claim; ¹ (4) "special factors" counsel against imposing Bivens -type liability on the individual Commissioners; and (5) the Commissioners are immune from individual liability of this type. Appellants are before this court on appeal of that order of dismissal.

II.

Courts may not entertain suits against the United States without consent of the United States in the form of an express waiver of sovereign immunity. The Federal Tort Claims Act is a limited waiver. Speaking generally, the FTCA waives immunity, allowing the government to be liable in tort for negligent or wrongful acts committed by a government employee acting within the scope of his employment when a private person would be liable for those acts under applicable law. The Act also contains specific exceptions to the general waiver. We are convinced, for reasons developed below, that the FTCA confers no jurisdiction over appellants' claim. The language of the statute, though helpful, does not compel a decision either way. Our conclusion rests primarily upon the apparent intention of Congress as that may be gleaned from various materials and considerations of policy. The statutory category through which that decision may be expressed is either the discretionary function exception or the requirement that the government be liable only if a private person would be liable for the same conduct. Though either category would suffice for our purposes, we think that both are applicable.

A.

The FTCA excepts the discretionary functions of government employees from creating tort liability. The Act creates this "discretionary function" exception in 28 U.S.C. Sec. 2680(a):

The provisions of this chapter and section 1346(b) of this title shall not apply to--

(a) Any claim based upon an act or omission of an employee of the Government, exercising due care, in the execution of a statute or regulation, whether or not such statute or regulation be valid, or 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.

Appellants concede, as they must, that the substantive decision whether to ban Tris was discretionary and hence within the exemption provided by the second clause of section 2680(a). But, they contend, the CPSC had no discretion to refuse to follow the procedures specified by 21 U.S.C. Sec. 371(e). This is, of course, correct. The procedural mandates of 21 U.S.C. Sec. 371(e) apply in every case. Pactra Industries, Inc. v. CPSC, 555 F.2d 677, 683 (9th Cir.1977) ("Congress fully intended that the rigid statutory requirement of a formal hearing should continue in every case where a proposed regulation was controversial and opposed by persons who were adversely affected by the agency's action.") (footnote omitted). Appellants argue, with considerable ingenuity, that the government is liable because its failure here to follow mandatory procedures defeats the discretionary function exception.

It is clear that the exception does not apply when a government employee fails to follow obligatory procedures in applying a rule that itself is an exercise of discretion. Hatahley v. United States, 351 U.S. 173, 76 S.Ct. 745, 100 L.Ed. 1065 (1956); Beins v. United States, 695 F.2d 591, 600-01 (D.C.Cir.1982); Birnbaum v. United States, 588 F.2d 319, 329, 332 (2d Cir.1978); Griffin v. United States, 500 F.2d 1059, 1068-69 (3d Cir.1974); Blessing...