When government screws up, sorry, you usually can’t sue them

December, 2016

Eric F. Greenberg Attorney-at-Law

Today our topics are government organization, lawsuits, and tomatoes.

If there’s any entity that is commonly the subject of complaint for not doing what it’s expected to do, it’s the US government. But can you actually sue the government for money damages if they, say, negligently perform their duties and that causes you losses?

Generally, the answer is no, because of an age-old principle called “sovereign immunity.” (Discussion for another day: Why do we have any concept with the word “sovereign” in it in America?) However, there’s a law called the Federal Tort Claims Act that makes exceptions to sovereign immunity, that is, it lists situations in which you can in fact sue the government for negligently causing you damage.

Why does all this matter? First, because a food packager recently learned a hard lesson about the broad scope of the government’s protection from getting sued, and second, because we might soon see changes to some of the principles and concepts that have long guided the organization and accountability of our government.

If you’re a packager of food or other FDA-regulated products and have ever been confronted with a possible health issue involving your product, and have had to make real-time decisions about what to do, you know how tough it is. You certainly don’t want to under-react if there’s real risk your food might be dangerous to people, but you also don’t want to over-react (conduct a recall, attract bad publicity) if your food really isn’t a danger.

These decisions are often made together with some involvement by the FDA, which might have brought the potential problem to your attention in the first place, and might be pressuring you to act quickly. But did you know that FDA has the legal power to simply publicize the potential danger presented by your food? That is, FDA can put out a public announcement warning people that your food could be a danger to health, regardless of any action you may or may not take.

And the question is, what happens if FDA does that, but it turns out later to have been wrong?

Such a thing happened a few years ago to Seaside Farm, Inc., of South Carolina, which grows and sells tomatoes. Here’s a summary of the story as told by a recent court decision. Back in 2008, after there was an outbreak of Salmonella illnesses in New Mexico and Texas, the government’s investigators at the Centers for Disease Control and Prevention found a strong statistical association between those illnesses and raw tomatoes. FDA issued a contamination warning to consumers in those states, said the outbreak was “likely associated with tomatoes,” but said it didn’t know the exact type and source of the contaminated tomatoes. About a week later, FDA sent out another warning, this time to consumers throughout the country, telling them to avoid “certain types” of raw red tomatoes, but the court said FDA didn’t make particularly clear that some tomatoes were safe. The outbreak eventually affected over 1,200 people.

Within a month, CDC had figured out that it was jalapeno and serrano peppers imported from Mexico that caused the outbreak and FDA withdrew its warning about fresh tomatoes. In the meantime, lots of people had stopped buying and eating tomatoes, including those packed by Seaside, even though, Seaside noted later, “no tomato in the United States ever tested positive” for the strain of Salmonella associated with the outbreak.

Seaside says it lost over $15 million dollars in crop losses because of FDA’s contamination warning. Seaside said that warning was issued due to FDA acting negligently, and therefore FDA should pay damages to Seaside. They sued FDA in federal court.

They lost. The trial court ruled against them and then an appellate court agreed with that decision. The courts said that this wasn’t one of those cases in which you were allowed to sue the government for negligence, that is, not one of the exceptions from sovereign immunity.

Why not? Because when FDA issued its warnings, it was performing one of the “discretionary functions” the law gives it to do. And while that Federal Tort Claims Act does say you can sue the government for some claims that grow out of “the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment,” that right isn’t as broad as it sounds. That’s because you can’t in fact sue if the action you are suing over is a “discretionary function or duty” and “whether or not the discretion involved be abused.” That’s a mighty big exception.

The appellate court ruled that even though it was wrong, FDA had been exercising a discretionary duty when it issued those incorrect warnings, and therefore couldn’t be sued for being negligent in the way they did it. The court said that FDA gets to decide how to investigate, interpret the information it collects, and decide what to do, and the courts don’t get to second-guess FDA.

This was a very tough decision for Seaside, of course. More broadly, these kinds of issues about who’s supposed to do what in our government system, and what kind of accountability might apply to government actions, are getting a good hard second look right now. With the incoming Trump administration, you can expect to see new and different approaches to such things, maybe even significant changes in laws.

For now, there are rather broad protections for the government from being sued for damages, even when it pretty clearly makes errors. PW

Eric Greenberg can be reached at [email protected], or visit his firm’s Web site at www.ericfgreenbergpc.com.

This article is informational only and is not intended as, and should not be considered to be, legal advice.

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The Long Reach of FDA Accusations

The Long Reach of FDA Accusations

By Eric F. Greenberg, Attorney-at-law

The Long Reach of FDA Accusations

For those of you who think that regulators only pick on the small companies, have I got a story for you. And this story is also eye-opening if you have wondered who the government is most likely to go after when a problem arises, in a world of complicated chains of commerce involving multiple actors making and moving and bringing packaged products to market.

The short version of the story is that the Food and Drug Administration took action against Amazon for products sold on its website. Yes, that Amazon, the one with the big website where you can buy essentially everything for handy delivery. And this wasn’t the first time FDA has warned Amazon about products available on its popular website.

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