Federal Circuits, D.C. Circuit (November 15, 1983)
Docket number: 82-1167
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U.S. Supreme Court - Nixon v. Fitzgerald, 457 U.S. 731 (1982)
U.S. Supreme Court - Carlson v. Green, 446 U.S. 14 (1980)
U.S. Supreme Court - Bivens v. Six Unknown Fed. Narcotics Agents, 403 U.S. 388 (1971)
U.S. Supreme Court - Dalehite v. United States, 346 U.S. 15 (1953)
U.S. Supreme Court - Indian Towing Co. v. United States, 350 U.S. 61 (1955)
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 overany 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 v. United States, 447 F.Supp. 1160, 1177-78 (E.D.Pa.1978). This entails liability for improper executive action occurring after and in the implementation of a rule previously adopted. It is equally clear, on the other hand, that if appellants challenged the substance of an agency-formulated ban on Tris-treated garments, the discretionary function exception would shield the United States from liability. Dalehite v. United States, 346 U.S. 15, 35-36, 73 S.Ct. 956, 967-968, 97 L.Ed. 1427 (1953) ("Where there is room for policy judgment and decision there is discretion."); Beins v. United States, 695 F.2d at 600. See Blessing v. United States, 447 F.Supp. at 1171-82 nn. 27-29, and cases cited therein.We are here presented, however, with a third case: an attack, not on the rule or its execution, but on the procedures by which the Tris ban was formulated and adopted. It would be possible, perhaps, to focus exclusively upon the procedures employed by the CPSC or, alternatively, to view those procedures as integral to the decision to adopt the substantive regulation. The different perspectives give different outcomes. The former involves a non-discretionary dereliction. The latter may be characterized as an abuse in the exercise of policy making, and hence an abuse of discretion shielded from liability by section 2680(a). We tend to think the latter is the better view. Procedure and substance are intertwined and CPSC abused its undoubted discretion by arriving at its decision in the wrong way. We do not rest primarily upon this reasoning, however. Nor do we deny that, as we have described the alternative perspectives, and if no other factors are taken into account, one might plausibly contend that there is in the nature of things no reason to prefer one formulation to the other: that their difference is purely semantic, if not metaphysical. Our choice, therefore, must turn on other factors and, on the basis of those factors, discussed below, we conclude that making a discretionary decision without following mandated procedures should be characterized, for the purposes of the FTCA, as an abuse of discretion. It follows that the discretionary function exception applies and the district court was without jurisdiction to entertain this suit.B.We think jurisdiction is lacking in this case for an additional reason: because the last condition of 28 U.S.C. Sec . 1346(b) (1976) is not met. Section 1346(b) confers jurisdiction on the federal courts to hearcivil 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.The Commission's alleged failure to file the proper procedures was plainly a "wrongful act." Similarly, the act or omission was by an "employee of the Government while acting within the scope of his office or employment." But the last condition of section 1346(b) makes the government liable only if "a private person[ ] would be liable to the claimant in accordance with the law of the place where the act or omission occurred." One plausible reading of that language is that there remains some distinction between private and governmental action so that not all wrongful acts by the government subject it to tort liability. We conclude that quasi-legislative or quasi-adjudicative action by an agency of the federal government is action of the type that private persons could not engage in and hence could not be liable for under local law. Thus, there is here no jurisdiction to entertain a suit against the federal government.The Supreme Court has made clear its desire to avoid the " 'non-governmental'-'governmental' quagmire that has long plagued the law of municipal corporations." Indian Towing Co. v. United States, 350 U.S. 61, 65, 76 S.Ct. 122, 124, 100 L.Ed. 48 (1955). Our holding today does not draw us into this quagmire. Whether a particular action is a "quasi-legislative" or "quasi-adjudicative" one is a judicial judgment frequently made. See, e.g., infra pp. 394-395. It is a judgment involving very different factors than those employed in determining whether an action is on the "operational level" of governmental activity. See, e.g., Indian Towing Co. v. United States, 350 U.S. 61, 76 S.Ct. 122, 100 L.Ed. 48 (1955) (operating a lighthouse); Rayonier Inc. v. United States, 352 U.S. 315, 317-19, 77 S.Ct. 374, 375-76, 1 L.Ed.2d 354 (1957) (fighting fires); Downs v. United States, 522 F.2d 990, 997 (6th Cir.1975) (attempted stopping of a hijacking).This conclusion, like that with respect to the discretionary function exception, does not rest upon the compulsion of the statute's language, but we think both conclusions are compelled by considerations to which we now turn.2C.Appellants ask us to make a major innovation in the law by holding that the FTCA provides damage actions as an additional means of policing the internal procedures of governmental agencies. They have not, however, given us particularly good reasons for such an extraordinary step, and everything we have seen counsels against it. There is, in the first place, absolutely no evidence that in enacting the FTCA Congress intended to police internal governmental law-making procedures with damage actions. Appellants' theory of governmental liability because of the CPSC's failure to follow the procedures specified by section 371(e) of the Federal Food, Drug, and Cosmetic Act would seem to impose liability for any agency's failure to follow procedures prescribed by any regulation or statute, including the Administrative Procedure Act. Congress has provided elaborate mechanisms of judicial review so that rules adopted by improper procedures may be declared nullities. Nowhere, so far as we are aware, has Congress stated that, in addition, the affected parties could collect damages from the government. Surely, so striking a mode of policing procedural regularity as the use of damage actions for millions or hundreds of millions of dollars would have been mentioned. Appellants have drawn our attention to no language in any statute or any legislative history that suggests a conscious intention by any member of Congress to accomplish such a result. That in itself would appear nearly conclusive of the issue before us. It may also be significant that no plaintiffs before those here have ever advanced such a theory. These are negative reasons to doubt that Congress intended the government to be liable in damages for adopting a rule through defective procedures. But there are positive reasons as well to reject any such conclusion.The Supreme Court's discussion of the legislative history of the FTCA in Dalehite v. United States, 346 U.S. 15, 24-30, 73 S.Ct. 956, 962-965, 97 L.Ed. 1427 (1953), indicates that Congress intended to avoid the inevitable consequences of appellants' theory. The Court quoted an Assistant Attorney General, appearing before the House Committee on the Judiciary, who spoke for the purpose of clarifying the amendment containing the discretionary function exception. He was quoted as having said,[It was not] intended that the constitutionality of legislation, the legality of regulations, or the propriety of a discretionary administrative act, should be tested through the medium of a damage suit for tort. The same holds true of other administrative action not of a regulatory nature, such as the expenditure of Federal funds, the execution of a Federal project and the like.Dalehite, 346 U.S. at 27, 73 S.Ct. at 963, quoting Statement by the then Assistant Attorney General Francis M. Shea at Hearings on H.R. 5373 and H.R. 6463 Before the House Comm. on the Judiciary, 77th Cong., 2d Sess. 6, 25, 33 (1942) (footnotes omitted).3Furthermore, as the Supreme Court has observed, the entire thrust of the FTCA is in a different direction from that appellants would have us give it: "Uppermost in the collective mind of Congress were the ordinary common-law torts. Of these, the example which is reiterated in the course of the repeated proposals for submitting the United States to tort liability is 'negligence in the operation of vehicles.' " Dalehite, 346 U.S. at 28, 73 S.Ct. at 964 (footnotes omitted).This thrust of the statute and Congress' concomitant refusal to enact the rule for which appellants contend is well shown by a paragraph appearing in a number of Committee reports. This paragraph states that it is not "desirable or intended that the constitutionality of legislation, or the legality of a rule or regulation should be tested through the medium of a damage suit for tort. However, the common-law torts of employees of regulatory agencies would be included within the scope of the bill to the same extent as torts of nonregulatory agencies." H.R.Rep. No. 2245, 77th Cong., 2d Sess. 10 (1942); S.Rep. No. 1196, 77th Cong., 2d Sess. 7 (1942); House Hearings on H.R. 5373 and H.R. 6463, supra, at 33, quoted in Dalehite, 346 U.S. at 29-30 n. 21, 73 S.Ct. at 964-965 n. 21.4 The Tris ban has been held illegal because of the procedures by which it was adopted. It would be fatuous to conclude that while Congress explicitly did not intend that the legality of a rule should be tested by a damage action, once illegality was established in another type of action, damage actions would then lie. Clearly, violation of the statute setting the procedures by which the CPSC is to promulgate regulations is not the kind of tort which Congress intended to cover when it enacted the FTCA.The distinction thus made between types of tort (assuming that we are dealing here with a tort at all) is firmly rooted in obvious policy differences. Tort liability under the FTCA is governed by "the law of the place where the act or omission occurred." It is entirely appropriate that a government employee's alleged tort, such as driving negligently, should be judged according to the standards of care in the community where the act occurred. The government's employee is required to behave according to the standard of reasonableness expected of all other persons performing the same function in that jurisdiction. It would be most inappropriate, however, that the quasi-legislative procedures of a government agency should be policed according to local law. This case illustrates that point. Here, as will usually be the case, the agency acted in the District of Columbia but the impact of its rule was felt by manufacturers almost everywhere but in the District of Columbia. In truth, unlike a negligent driving case, the District has no interest whatever in the regularity of the procedures followed by the CPSC here. It would be utterly anomalous to construe the FTCA so that the methods by which the CPSC arrives at a rule are judged and punished according to District tort law. Appellants claim that the District law makes it negligence per se to violate any statute. If so, the District could drastically alter the policing of the procedures of the CPSC, and every other agency quartered here, simply by changing its tort law, and such changes might well be made for reasons having nothing to do with concern about federal agency procedures. It is unlikely in the extreme that Congress delegated to the government of the District of Columbia the decision whether to police federal agency procedures having no impact upon the District through the imposition of tort liability. It is more than unlikely. Such a delegation would be so irrational as to make ludicrous the suggestion that it has been made through the FTCA.Even more unlikely--and more absurd--is the implication of appellants' argument that Congress intended that agency decisions made outside of the District of Columbia should be held subject to damage liability according to the tort law of whatever state or municipality a federal agency happens to be in when it acts.The only case arguably contrary to our decision here is the Second Circuit's decision in Myers & Myers, Inc. v. United States Postal Service,Try vLex for FREE for 3 days
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