A federal court has rejected the potentially far-reaching claims of Florida tomato growers who say they lost business because of Food and Drug Administration warnings.
The ruling unsettles numerous growers, who collectively lost several hundred million dollars following FDA food safety warnings in 2008 that proved erroneous. The ruling also curtails other growers tempted to base similar challenges on the constitutional requirement that the government pay compensation for taking property.
“Advisory pronouncements, even those with significant financial impact on the marketplace, are not enough to effect a taking of property under the Fifth Amendment,” U.S. Court of Federal Claims Senior Judge Lynn J. Bush stated.
In a 13-page decision quietly issued Thursday, Bush concluded that “although a wide range of government actions may give rise to regulatory takings,” these actions do not extend to “press releases and consumer advisories, by themselves.”
The Tallahassee, Fla.-based attorney representing the growers, M. Stephen Turner, said in an interview Friday that he will appeal. He likened the government’s actions to somebody who “stands in front of a house and says it’s infested with vermin,” thereby destroying property value.
“The Fifth Amendment protects the property of everyone,” Turner said.
A Clinton administration appointee, Bush serves on a specialized court well-known among certain California farmers, West Coast loggers, defense contractors and others. Located within sight of the White House, the claims court handles breach-of-contract, property takings and other cases in which companies and individuals have a monetary beef with the federal government.
Last month, for instance, the claims court sided with a water district in California’s San Joaquin County that says the government owes it more money for failing to deliver irrigation water. The court regularly considers lawsuits from logging companies unhappy with timber sales, and other companies challenging contracts.
Last year, tomato growers brought their initial grievance to the court.
The FDA had responded to an outbreak of salmonella-related illnesses in 2008, issuing warnings on June 3 and June 7 of that year linking the outbreak to certain types of tomatoes. The FDA also held a media briefing on June 13, opining that the “vast majority” of salmonella-tainted tomatoes was “very likely” from New Mexico and Florida.
Four days later, having concluded the disease outbreak was actually linked to imported serrano and jalapeno peppers, the FDA lifted its warning against tomatoes. In the meantime, though, “all or almost all of the value of plaintiffs’ perishable tomatoes was destroyed by the collapse in the market for tomatoes triggered by the FDA’s warnings,” Bush noted.
The price of Georgia tomatoes in 2008 dropped to less than $4 per box from the usual $18 to $19, while some Florida growers were reportedly reduced to selling their crop for less than $1 per box.
The growers that filed the original lawsuit, including High Hope Farms and Juniper Tomato Growers, both of Quincy, Fla., called the FDA’s warning a “regulatory taking.” Other companies, including DiMare Fresh, later joined the lawsuit.
The suit was built around the Fifth Amendment, which states that private property shall not be taken for public use without just compensation.
A conventional taking occurs when the government physically seizes property, as when building a road. A regulatory taking can happen when regulations reduce the property’s value even though it remains in private hands, as when when Endangered Species Act protections limit development potential.
The Justice Department argued no taking occurred as a result of the FDA’s statements about the spring 2008 crop of red plum, red Roma and red round tomatoes.
“The fact that the marketplace may have reacted by reducing their Spring 2008 purchases of tomatoes is irrelevant in the absence of actual Governmental interference with plaintiffs’ legal rights,” the Justice Department argued in its legal brief.
Bush agreed, concluding that the FDA’s public statements fell within the category of those that “have no legal effect on property interests.”
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