Seaside Farm, Inc. v. United States

• Decision Date: 02 December 2016
• Docket Number: No. 15-2562,15-2562
• Citation: 842 F.3d 853
• Parties: Seaside Farm, Inc., Plaintiff-Appellant, v. United States of America, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

842 F.3d 853

Seaside Farm, Inc., Plaintiff-Appellant,

v.United States of America, Defendant-Appellee.

No. 15-2562

United States Court of Appeals, Fourth Circuit.

Argued: October 26, 2016

Decided: December 2, 2016

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.

Before WILKINSON, NIEMEYER, and SHEDD, Circuit Judges.

Affirmed by published opinion. Judge Wilkinson wrote the opinion, in which Judge Niemeyer and Judge Shedd joined.

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 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 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, see28 U.S.C. § 2680(a), and moved to dismiss the case. The district court denied the 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.

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, 104 S.Ct. 2755, 81 L.Ed.2d 660 (1984). It was meant to "protect the government from liability that would seriously handicap efficient government operations." Id. at 814, 104 S.Ct. 2755 (quoting United States v. Muniz, 374 U.S. 150, 163, 83 S.Ct. 1850, 10 L.Ed.2d 805 (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, 108 S.Ct. 1954, 100 L.Ed.2d 531 (1988) ; seeUnited States v. Gaubert, 499 U.S. 315, 322–25, 111 S.Ct. 1267, 113 L.Ed.2d 335 (1991) ; Varig Airlines, 467 U.S. at 813–14, 104 S.Ct. 2755 ; Dalehite v. United States, 346 U.S. 15, 32–36, 73 S.Ct. 956, 97 L.Ed. 1427 (1953). We begin by asking whether any "federal statute, regulation, or policy specifically prescribes a course of action." Berkovitz, 486 U.S. at 536, 108 S.Ct. 1954. 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, 111 S.Ct. 1267. 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...