Berkovitz v. United States (1988)

486 U.S. 531

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

Syllabus

A provision of the Federal Tort Claims Act (FTCA) excepts from statutory liability any claim

based upon [a federal agency’s or employee’s] exercise or performance or the failure to exercise or perform a discretionary function or duty.

Upon contracting a severe case of polio after ingesting a dose of Orimune, an oral polio vaccine manufactured by Lederle Laboratories, petitioner Kevan Berkovitz, a minor, joined by his parents (also petitioners) as guardians, filed an FTCA suit alleging violations of federal law and policy by the National Institutes of Health’s Division of Biologic Standards (DBS) in licensing Lederle to produce Orimune, and by the Bureau of Biologics of the Food and Drug Administration (FDA) in approving the release to the public of the particular lot of vaccine containing Berkovitz’s dose. The District Court denied the Government’s motion to dismiss the suit for lack of subject matter jurisdiction, but the Court of Appeals reversed. Although rejecting the Government’s argument that the discretionary function exception bars all claims arising out of federal agencies’ regulatory activities, the court held that the licensing and release of polio vaccines are wholly discretionary actions protected by the exception.

Held:

1. The language, purpose, and legislative history of the discretionary function exception, as well as its interpretation in this Court’s decisions, establish that the exception does not preclude liability for any and all acts arising out of federal agencies’ regulatory programs, but insulates from liability only those governmental actions and decisions that involve an element of judgment or choice and that are based on public policy considerations. Pp. GO>535-539.

2. The Court of Appeals erred in holding that the discretionary function exception bars petitioners’ claims. Pp. GO>539-548.

(a) Statutory and regulatory provisions require the DBS, prior to issuing a license for a product such as Orimune, to receive all data which the manufacturer is required to submit, to examine the product, and to make a determination that it complies with safety standards. Thus, a cause of action based on petitioner’s allegation that the DBS licensed Orimune without first receiving the required safety data is not barred by the discretionary function exception, since the DBS has no discretion to [486 U.S. 532] issue a license under such circumstances, and doing so would violate a specific statutory and regulatory directive. Petitioners’ other claim — that the DBS licensed Orimune even though the vaccine did not comply with certain regulatory safety standards — if interpreted to mean that the DBS issued the license without determining compliance with the standards or after determining a failure to comply, also is not barred by the discretionary function exception, since the claim charges the agency with failing to act in accordance with specific mandatory directives, as to which the DBS has no discretion. However, if this claim is interpreted to mean that the DBS made an incorrect compliance determination, the question of the discretionary function exception’s applicability turns on whether the DBS officials making that determination permissibly exercise policy choice, a point that is not clear from the record and therefore must be decided by the District Court if petitioners choose to press this interpretation. Pp. GO>540-545.

(b) Although the regulatory scheme governing the public release of vaccine lots allows the FDA to determine the appropriate manner in which to regulate, petitioners have alleged that, under the authority granted by the regulations, the FDA has adopted a policy of testing all lots for compliance with safety standards and of preventing the public distribution of any lot that fails to comply, and that, notwithstanding this mandatory policy, the FDA knowingly approved the release of the unsafe lot in question. Accepting these allegations as true, as is necessary in reviewing a dismissal, the holding that the discretionary function exception barred petitioners’ claim was improper, since the acts complained of do not involve the permissible exercise of discretion to release a noncomplying lot on the basis of policy considerations. Pp. GO>545-548.

822 F.2d 1322, reversed and remanded.

MARSHALL, J., delivered the opinion for a unanimous Court. [486 U.S. 533]

Excerpts from the Majority Opinion by Justice Marshall:

“….

The FTCA, 28 U.S.C. § 1346(b), generally authorizes suits against the United States for 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.{GO>2}

The Act includes a number of exceptions to this broad waiver of sovereign immunity. The exception relevant to this case provides that no liability shall lie for

[a]ny claim . . . 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.

28 U.S.C. § 2680(a). [486 U.S. 536] This exception, as we stated in our most recent opinion on the subject,

marks the boundary between Congress’ willingness to impose tort liability upon the United States and its desire to protect certain governmental activities from exposure to suit by private individuals.

United States v. Varig Airlines, 467 U.S. at GO>808.

The determination of whether the discretionary function exception bars a suit against the Government is guided by several established principles. This Court stated in Varig that

it is the nature of the conduct, rather than the status of the actor, that governs whether the discretionary function exception applies in a given case.

Id. at GO>813. In examining the nature of the challenged conduct, a court must first consider whether the action is a matter of choice for the acting employee. This inquiry is mandated by the language of the exception; conduct cannot be discretionary unless it involves an element of judgment or choice. See GO>Dalehite v. United States, 346 U.S. 15, GO>34 (1953) (stating that the exception protects “the discretion of the executive or the administrator to act according to one’s judgment of the best course”). Thus, the discretionary function exception will not apply when a federal statute, regulation, or policy specifically prescribes a course of action for an employee to follow. In this event, the employee has no rightful option but to adhere to the directive. And if the employee’s conduct cannot appropriately be the product of judgment or choice, then there is no discretion in the conduct for the discretionary function exception to protect. Cf. GO>Westfall v. Erwin, 484 U.S. 292, GO>296-297 (1988) (recognizing that conduct that is not the product of independent judgment will be unaffected by threat of liability).

Moreover, assuming the challenged conduct involves an element of judgment, a court must determine whether that judgment is of the kind that the discretionary function exception was designed to shield. The basis for the discretionary function exception was Congress’ desire to

prevent judicial [486 U.S. 537] “second-guessing” of legislative and administrative decisions grounded in social, economic, and political policy through the medium of an action in tort.

United States v. Varig Airlines, supra, at GO>814. The exception, properly construed, therefore protects only governmental actions and decisions based on considerations of public policy. See Dalehite v. United States, supra, at GO>36 (“Where there is room for policy judgment and decision, there is discretion”). In sum, the discretionary function exception insulates the Government from liability if the action challenged in the case involves the permissible exercise of policy judgment.

….

If petitioners aver that the DBS licensed Orimune either without determining whether the vaccine complied with regulatory standards or after determining that the vaccine failed to comply, the discretionary function exception does not bar the claim. Under the scheme governing the DBS’s regulation of polio vaccines, the DBS may not issue a license except upon an examination of the product and a determination that the product complies with all regulatory standards. See 42 CFR § 73.5(a) (Supp.1964); 21 CFR § 601.4 (1987). The agency has no discretion to deviate from this mandated procedure.{GO>10} Petitioners’ claim, if interpreted as alleging that the DBS licensed Orimune in the absence of a determination that the vaccine complied with regulatory standards, therefore does not challenge a discretionary function. Rather, the claim charges a failure on the part of the agency to perform its clear duty under federal law. When a suit charges an agency with failing to act in accord with a specific mandatory directive, the discretionary function exception does not apply.

….”