In Dimare Fresh, Inc., et al., v. United States (No. 13-519 C), the United States Court of Federal Claims granted the Food and Drug Administration’s (“FDA” or “Agency”) motion to dismiss a lawsuit brought by tomato farmers and producers who alleged a regulatory taking when the FDA issued warnings linking a Salmonella outbreak to certain types of tomatoes they produced.
Plaintiffs, who were involved in the production, distribution, and bulk sale of tomatoes, claimed that the FDA’s warnings “caused the loss of all or substantially all the value of Plaintiffs’ property . . . [;] [t]his action appropriated a benefit to the Government and the public at the expense of the Tomato Farmers and Producers.” Any link between plaintiffs’ tomatoes and Salmonella was eventually disproved.
The FDA argued that it had issued warnings, not a recall, of tomatoes from states not yet listed as safe, which means the sellers of tomatoes were not required to take those tomatoes off the shelves. Therefore, according to the FDA, “the effect of the FDA warnings on the market for plaintiffs’ tomatoes does not constitute a regulatory taking.”
The court agreed and likened this case with others that showed “public statements by government officials are not sufficient, by themselves, to effect a regulatory taking, even if these statements profoundly affect the market for the plaintiffs’ properties.”
Accordingly, the court opined that “A regulatory takings claim is not plausible and cannot proceed when the government action at issue has no legal effect on the plaintiffs’ property interest.” Further, the court explained that to hold otherwise would require “independent actions of consumers [and retailers declining to buy plaintiffs’ tomatoes] to be attributed to the Government” for the purpose of regulatory takings claims. The court dismissed plaintiffs’ claims, as filed on September 18, 2014, for failure to state a claim given that plaintiffs had not cited any cases which held that press releases and consumer advisories, by themselves, can constitute a regulatory taking.