Dimare Fresh, Inc. v. United States

808 F.3d 1301, 2015 U.S. App. LEXIS 18741, 2015 WL 6500337
CourtCourt of Appeals for the Federal Circuit
DecidedOctober 28, 2015
Docket2015-5006
StatusPublished
Cited by66 cases

This text of 808 F.3d 1301 (Dimare Fresh, Inc. v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dimare Fresh, Inc. v. United States, 808 F.3d 1301, 2015 U.S. App. LEXIS 18741, 2015 WL 6500337 (Fed. Cir. 2015).

Opinion

*1304 WALLACH, Circuit Judge.

Plaintiffs-Appellants (“Tomato Producers” or “Appellants”) appeal the decision of the United States Court of Federal Claims (“Claims Court”) dismissing their Amended Complaint pursuant to Rule 12(b)(6) of the Rules of the United States Court of Federal Claims (“RCFC”). The Claims Court dismissed the Amended Complaint on the ground that press releases issued by the Food and Drug Administration (“FDA” or “Government”), which warned consumers of a possible link between Appellants’ tomatoes and an outbreak of Salmonella Saintpaul (“salmonella”), did not effect a regulatory taking. See Dimare Fresh, Inc. v. United States, 118 Fed.Cl. 455 (2014). For the reasons set forth below, we affirm.

I.Background

A. FDA Press Releases

Between April 23 and June 1, 2008, there were fifty-seven reported cases of salmonellosis, an infection caused by the salmonella bacteria. Subsequently, the FDA, federal and state agencies, and food industry trade associations began an investigation to determine the source of the contamination. On June 3, 2008, the FDA issued a press release alerting consumers that the salmonella outbreak “appears to be linked” to the consumption of “raw red plum, red Roma, or round red tomatoes.” 1 J.A. 34. In that press release, the FDA also stated that “the source of the contaminated tomatoes may be limited to a single grower or packer or tomatoes from a specific geographic area” and that it was working “diligently ... to quickly determine the source and type of the contaminated tomatoes.” J.A. 34.

On June 7, 2008, the FDA released a second press release, informing the public that during the course of its investigation, it used “traceback 2 and other distribution pattern information” to identify specific geographic sources where tomatoes were safe to consume. 3 (footnote added). J.A. 35.

*1305 On June 13, 2008, the FDA conducted a media briefing through its then — Associate Commissioner for Foods, Dr. David Acheson. Dr. Acheson stated the FDA suspected the contaminated tomatoes had been shipped from Florida or Mexico, and red plum, red Roma, and red round tomatoes were “incriminated with the outbreak.” J.A. 40. Dr. Acheson, however, emphasized that the FDA had only issued a warning to consumers, and had not requested that any producers voluntarily recall tomatoes because the FDA had not “identified the particular source” of the salmonella outbreak. J.A. 48. Dr. Acheson also stated the FDA was still in the process of conducting an “ongoing investigation,” and therefore the information gathered thus far was to remain “confidential.” J.A.42.

On July 17, 2008, the FDA issued a third press release announcing that “fresh tomatoes now available in the domestic market are not associated with the current outbreak.” J.A. 62. “As a result, the agency [] remov[ed] its June 7 warning against eating certain types of red raw tomatoes.” J.A. 62. Although the link between the salmonella outbreak and the Appellants’ tomatoes was eventually disproved, the Tomato Producers allege that all or almost all of the value of the perishable tomatoes was destroyed due to a decrease in market demand for the Appellants’ tomatoes. Appellants’ Br. 19.

B. The Tomato Producers’ Amended Complaint

The Tomato Producers are “growers, packers, and shippers of tomatoes in Florida and South Georgia.” Dimare, 118 Fed. Cl. at 456 (internal quotation and citation marks). The Tomato Producers initially filed this suit as a putative class action on July 29, 2013. Supplemental Appendix l. 4 Upon the Government’s motion to dismiss the Complaint, the Tomato Producers filed an Amended Complaint on April 16, 2014, electing to remove the class allegations and name additional parties to the suit.

In the Amended Complaint, the Tomato Producers allege the June 3 and June 7, 2008 FDA press releases were harmful to their spring 2008 sales and that “[t]here was no practical or legal opportunity to contest, controvert or prevent the effect of the warnings.” J.A. 31. The Tomato Producers also allege they “had [a] reasonable investment backed expectation to realize the market value of their tomatoes, but as a result of [the] FDA’s regulatory warnings, all economic value was lost due to the collapse of the market for their tomatoes.” J.A. 31. Finally, the. Tomato Producers assert that the “only value of the tomatoes was prompt sale in bulk” and they “had a property right in their healthy tomatoes, specifically the right to market and sell them as healthy food.” J.A. 31. As a result, the Tomato Producers claim that their “property right was effectively rendered valueless by the FDA’s actions.” J.A. 31.

Although the Tomato Producers acknowledged they were not mandated to quarantine their crops or prohibited from exercising their right to market or sell the tomatoes, they nonetheless allege that because they “had no practical alternative to preserve their tomatoes,” J.A. 31, the FDA press releases “had the same burdensome effect as quarantining or prohibiting sale of [their] tomato crop.” J.A. 30. Accordingly, the Tomato Producers allege that due to its practical effect on the market demand for tomatoes, the FDA’s issuance of the press releases must be recognized *1306 as a “regulatory taking of the [Tomato Producers’] perishable tomatoes.”. J.A. 32.

C. Procedural Posture and Jurisdiction

On May 5, 2014, the Government moved to dismiss the Tomato Producers’ Amended Complaint pursuant to RCFC 12(b)(6) for failure to state a claim upon which relief can be granted. On September 18, 2014, the Claims Court granted the Government’s motion and entered a judgment dismissing the Amended Complaint. On October 9, 2014, the Tomato Producers filed a timely notice of appeal. This court has jurisdiction under 28 U.S.C. § 1295(a)(3) (2012).

I. Discussion

A. The General Principle Articulated by the Claims Court Is Not Supported by Our Takings Jurisprudence

Whether the Claims Court properly dismissed a “complaint for failure to state a claim upon which relief could be granted is an issue of law which we review de novo.” Cambridge v. United States, 558 F.3d 1331, 1335 (Fed.Cir.2009) (citation omitted). To avoid dismissal for failure to state a claim, a complaint must allege facts “plausibly suggesting (not merely consistent with)” a showing of entitlement to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007); see also Cambridge, 558 F.3d at 1335. At this point in the proceedings, we accept the Tomato Producers’ well-pleaded factual allegations as true. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

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808 F.3d 1301, 2015 U.S. App. LEXIS 18741, 2015 WL 6500337, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dimare-fresh-inc-v-united-states-cafc-2015.