Federal Circuits, Fed. Cir. (February 06, 1991)
Docket number: 89-1698,89-1729
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Thomas H. Yancey, Sidley & Austin, Washington, D.C., argued for plaintiffs/cross-appellants.
John S. Groat, Atty., Commercial Litigation Branch, Dept. of Justice, Washington, D.C., argued for defendant-appellant. With him on the brief were Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director and Thomas W. Petersen, Asst. Director. Also on the brief was William Jenson, Dept. of Agr., of counsel.Before NEWMAN, Circuit Judge, MILLER, Senior Circuit Judge, and MUECKE, Senior District Judge.*MUECKE, Senior District Judge.Seeking reversal of a Claims Court decision, the Government argues that the United States Department of Agriculture's (USDA) imposition of a poultry quarantine is not a taking compensable under the Fifth Amendment. On cross-appeal, the Yanceys seek a ruling that affirms the Claims Court's decision but that increases the amount recoverable or, alternatively, a ruling that remands the case for a determination of statutory compensation under 21 U.S.C. Sec . 114a (1972). We affirm in part, reverse in part, and remand.BACKGROUNDThis suit was brought by Andrew and Elizabeth Yancey to recover compensation for turkey breeder stock that was sold for slaughter as a result of a quarantine imposed by the USDA to control and eradicate an outbreak of lethal Avian Influenza in 1983-84.In November, 1983, the Yanceys acquired a flock of 3,000 turkey breeder hens and 295 turkey toms for purposes of selling the turkey hatching eggs produced on their farm in Rockingham County, Virginia to customers outside the State.In mid-October, 1983, an outbreak of pathogenic Avian Influenza, a highly contagious viral disease affecting poultry, occurred in Lancaster County, Pennsylvania. Although a mild form of the disease causes little death loss and a small drop in egg production, the pathogenic form can be very serious. In Lancaster County, more than ninety percent mortality occurred.The USDA acted quickly by declaring an extraordinary emergency in Pennsylvania and promulgating regulations, pursuant to 21 U.S.C. Sec . 134a (1972), that imposed a quarantine in certain areas of the state. Subsequently, outbreaks of the mild form of the disease in Maryland and Virginia were traced to the Pennsylvania outbreak. Though these areas were not declared an emergency, the USDA amended its regulations pursuant to 21 U.S.C. Sec . 114a because of concern that these cases might convert to the pathogenic form.As a result, certain counties in Maryland and Virginia (including Rockingham County, Virginia) were quarantined. The quarantine applicable to the Yanceys prohibited interstate shipment of live poultry, manure from poultry, litter used by poultry, carcasses, eggs and certain equipment. 49 Fed.Reg. 3843. The USDA published regulations applicable to areas not under the declaration of an emergency, authorizing payment of up to 100% of the "expenses of purchase, destruction and disposition of animals and materials required to be destroyed because of being contaminated by or exposed to lethal avian influenza." 49 Fed.Reg. 3446-3448, amended at 9 C.F.R. Sec. 53.2(b) (1990). The quarantine remained in effect in Virginia until September 14, 1984.Testing showed no evidence of the disease in the Yanceys' flock. Nevertheless, they were not allowed to ship their turkeys or hatching eggs interstate during the quarantine. The Yanceys requested assistance from the Commissioner of Agriculture of Virginia but efforts to locate a market for the breeder stock or eggs proved unsuccessful.The Yanceys spent up to $1,800 weekly to maintain the flock. They decided that keeping the flock alive for the indefinite duration of the quarantine would be uneconomical. They decided to sell the stock for meat, although the turkeys had not been "raised to be economically viable" for that purpose. The stock was sold for slaughter on February 13, 1984, for $20,887.USDA denied the Yanceys' $63,556 claim for indemnity pursuant to 9 C.F.R. Sec. 53.2(b) because their stock was healthy.Next, the Yanceys filed suit in the U.S. Claims Court. The Yanceys alleged a taking of their property without compensation, in violation of the Fifth Amendment, because the quarantine prevented the interstate sale of their stock and thereby destroyed its economic value. They also alleged that defendant violated 21 U.S.C. Sec . 114a. The Claims Court dismissed the Yanceys' statutory claim but, after trial, granted relief on the constitutional claim.The Government filed this appeal and the Yanceys cross-appealed.ANALYSISThis court reviews "Claims Court decisions for errors of law and clearly erroneous findings of fact." Cooper v. United States, 827 F.2d 762, 763 (Fed.Cir.1987); Milmark Services, Inc. v. United States, 731 F.2d 855, 857 (Fed.Cir.1984).Though the Claims Court determined that under the Fifth Amendment the Yanceys were entitled to compensation, reexamination of the Yanceys' statutory arguments is also warranted at this time. The Supreme Court has developed an elaborate body of devices for avoiding difficult questions. See Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 341, 56 S.Ct. 466, 480, 80 L.Ed. 688 (1936) (Brandeis, J. concurring). If a suit may be resolved either by statutory construction or constitutional interpretation, the statutory approach is generally to be preferred. See L. Tribe, American Constitutional Law, at 71-72, 1017, 1032, & 1036-37 (2nd ed. 1988).Thus, we turn first to the issue raised by the Yanceys on cross-appeal: whether the Yanceys may obtain the relief sought based on 21 U.S.C. Sec . 114a.I. STATUTORY COMPENSATIONThe central provision granting consent to suit in the Claims Court is the Tucker Act, 28 U.S.C. Sec . 1491 (Supp.1990). United States v. Testan, 424 U.S. 392, 397, 96 S.Ct. 948, 952, 47 L.Ed.2d 114 (1976). This section does not create any substantive right of recovery against the United States for money damages. It merely confers jurisdiction upon the court whenever a substantive right exists. Id. at 398, 96 S.Ct. at 953. A claimant who is not relying upon breach of a contractual obligation, therefore, must look beyond 28 U.S.C. Sec . 1491 and establish that some substantive provision of law, regulation, or the Constitution can be fairly construed as mandating compensation in order to state a claim within the jurisdiction of the court. United States v. Mitchell, 445 U.S. 535, 538, 100 S.Ct. 1349, 1351, 63 L.Ed.2d 607 (1980).1The Yanceys' turkey breeder flock was quarantined pursuant to the Secretary of Agriculture's authority under 21 U.S.C. Sec . 114a. This statute allows the Yanceys a claim for compensation if it "can fairly be interpreted as mandating compensation by the Federal Government for the damage sustained." Testan, 424 U.S. at 398, 96 S.Ct. at 953.Section 114a of title 21 United States Code provides, in part:The Secretary of Agriculture, either independently or in cooperation with States or political subdivisions ... is authorized to control and eradicate any communicable diseases of livestock or poultry ... which in the opinion of the Secretary constitute an emergency and threaten the livestock industry of the country, including the payment of claims growing out of destruction of animals (including poultry), and of materials, affected by or exposed to any such disease, in accordance with such regulations as the Secretary may prescribe....Because the statute appears to give discretion to the Secretary, the Claims Court based its decision on whether the USDA complied with the regulations promulgated pursuant to 21 U.S.C. Sec . 114a. See 9 C.F.R. Sec. 53. The regulations authorize payment of up to 100% of the "expense of purchase, destruction and disposition of animals and materials required to be destroyed because of being contaminated by or exposed to" lethal Avian Influenza. 9 C.F.R. Sec. 53.2.The Claims Court ruled that none of the requirements under the regulations were satisfied. Yancey v. United States, 10 Cl.Ct. 311, 316 (1986). The Claims Court concluded that because the turkeys were healthy they could not be "contaminated by or exposed to" lethal Avian Influenza. Moreover, according to the Claims Court, because the flock was healthy, it was not "required to be destroyed."2Finally, the Claims Court emphasized that the Yanceys' turkeys were not destroyed in a manner consistent with the regulations. Section 53.4(a) of 9 C.F.R. requires destruction as follows:Animals affected by or exposed to disease shall be killed promptly after appraisal and disposed of by burial or burning, unless otherwise specifically provided by the Deputy Administrator, Veterinary Services in extraordinary circumstances.The Yanceys also failed to allege that their flock and materials had been properly appraised as required by regulation to obtain compensation. See 9 C.F.R. Sec. 53.3(a) and Sec. 53.10(c).Yet, an inconsistency appears to have developed in the way the Government applies its regulations. On cross-appeal, to demonstrate this inconsistency, the Yanceys rely on Loftin v. United States, 6 Cl.Ct. 596 (1984), aff'd, 765 F.2d 1117 (Fed.Cir.1985), an authority that the Claims Court's opinion did not address. Though Loftin ultimately turned on other legal considerations, it is still relevant to our analysis because the Government interpreted 21 U.S.C. Sec . 114a so as to allow compensation for destruction of non-diseased animals due to their close proximity to infected animals.3Similarly, it is clear that the Government quarantined the Yanceys' breeder flock because of its proximity to the outbreaks of Avian Influenza in Virginia. Under the Government's prior interpretation of the statute in Loftin, the Yanceys' flock might have been classified as exposed to the disease and thereby made eligible for indemnities. Thus, according to the Yanceys, insofar as the actions of the Government in refusing to statutorily compensate them for their healthy flock are inconsistent with the approach taken in Loftin, the Government's actions appear to be arbitrary and capricious.If regulations lead to an unreasonable or irrational result that is at odds with the underlying statutory intent, guidance should be sought from the legislative history. Texas State Commission v. United States, 796 F.2d 400, 406 (Fed.Cir.1986), cert. denied,Try vLex for FREE for 3 days
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