Monday, July 28, 2014

5th Amendment "Takings," the Medical License and the Website Comments

Dr. Aaron Filler, a Santa Monica neurosurgeon, filed a pro se Complaint alleging that the United States government
effected a 5th Amendment taking of his medical license without just compensation. He claims the taking occurred as a result of the acts of Susan Walker, a biologist and regional director with the National Marine Fisheries Service (`NMFS’) of the National Oceanic and Atmospheric Administration (`NOAA’), a division within the United States Department of Commerce. He requests `damages in an amount to be proven at trial but no less than ten million dollars.’ Amended Complaint ¶ 130.
Filler v. U.S., 2014 WL 2000439 (U.S. Court of Federal Claims 2014).  The basis for the lawsuit was the final phrase in the 5th Amendment to the U.S. Constitution, i.e., “nor shall private property be taken for public use, without just compensation”.  This is known as the “Takings Clause” of the 5th Amendment (or “eminent domain”).
The U.S. Department of Justice’s Civil Division represented the government and moved to dismiss Filler’s suit under Rule 12(b)(6) of the Federal Rules of Civil Procedure, which lets a judge dismiss a lawsuit if the plaintiff has failed to state a viable cause of action.  As Wikipedia explains, the Rule 12(b)(6) motion is how lawsuits with
insufficient legal theories underlying their cause of action are dismissed from court. For example, assault requires intent, so if the plaintiff has failed to plead intent, the defense can seek dismissal by filing a 12(b)(6) motion. `While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).’  Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007).  
In the Department of Justice’s Rule 12(b)(6) motion in this case, it argued that
Dr. Filler `fails to articulate [a takings] claim within this Court's jurisdiction’ because . . . he has not alleged sufficient facts to establish that Ms. Walker acted on behalf of the government when she engaged in the acts alleged to have resulted in the taking of his property. [Defense’s Motion to Dismiss]. Finally, the government argues that Dr. Filler fails to state a claim upon which relief can be granted because there is no compensable property interest in a medical license for purposes of the Takings Clause.
Filler v. U.S., supra.
The judge began his analysis of the issues in the case by explaining that in 2010,
Susan Walker sought treatment from Dr. Filler, and [he] performed medical procedures on her, including injections of medication. . . . The complaint alleges that on January 31, 2011, Ms. Walker posted the following comment, referring to Dr. Filler and his treatments, on under the username `sueinjuneau’:

`Dr. Filler uses Wydase, which is a brand name of the enzyme hyaluronidase, in his piriformis injections to, in theory, break down scar tissue.’

`Wydase is a medical preparation of highly purified bovine testicular enzyme, made previously by Wyeth Pharmaceuticals in England. Production ceased due to the possible transmission of bovine spongiform encephalitis, or mad cow disease, though there is no documentation of transmission through this route. . . .’

`Wydase is no longer manufactured and has not been manufactured in at least seven years, so I'm not sure why Filler refers to the use of Wydase, and given the remote risk of CSE transmission that it poses, injecting it directly adjacent to a nerve does not seem advised.’

Amended Complaint 49. This comment and others Ms. Walker posted on various other web sites were the bases of an action for defamation and interference with prospective economic advantage in California state court and an administrative claim under the Federal TortClaims Act, 28 U.S. Code § 1346, with the Department of Commerce, which Dr. Filler pursued prior to bringing his takings claim in this Court. 

Dr. Filler alleges that Ms. Walker posted the comment on during working hours on a government computer and that the comment drew from Ms. Walker's NOAA training and constituted a `public warning about danger to the health and safety of the United States populace.’ Amended Complaint  ¶¶ 4, 48–49. He also alleges that the comment, `though false, is certain to cause fear in those patients who have been injected, their families and co-workers as well as causing fear in others considering visiting Dr. Filler for treatment.’ Id. ¶ 42. He claims Ms. Walker acted as an agent of the United States when she posted the comment and that the comment diminished the value of his medical license so completely  it constituted an inverse condemnation, for which the 5th Amendment requires just compensation. . . .
Filler v. U.S., supra. In a footnote, the judge says that “[b]y `CSE,’ Ms. Walker likely meant `BSE’ -- that is, bovine spongiform encephalitis.” Filler v. U.S., supra.  And in another note, the judge explains that “inverse condemnation” is
a type of takings claim; whereas condemnation occurs when the government undertakes the legal proceedings necessary to assume ownership of property under its eminent domain power, inverse condemnation occurs when the property owner undertakes legal proceedings to have a government action declared a taking and to recover just compensation due pursuant to the 5th Amendment. . . .
Filler v. U.S., supra.  
He then took up the first issue in the case, noting that the Court of Federal Claims is a
court of limited jurisdiction that, pursuant to the Tucker Act, may hear `any claim against the United States founded upon the Constitution, or any Act of Congress or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort.’ 28 U.S. Code § 1491(a)(1) (2006).

The Tucker Act serves as a waiver of sovereign immunity and a jurisdictional grant, but it does not create a substantive cause of action. Jan's Helicopter Serv., Inc. v. Fed. Aviation Admin., 525 F.3d 1299 (U.S. Court of Appeals for the Federal Circuit 2008). A plaintiff, therefore, must establish that `a separate source of substantive law . . . creates the right to money damages.’  Jan's Helicopter Serv., Inc. v. Fed. Aviation Admin, supra. Takings claims fall squarely within this Court's subject matter jurisdiction.
Filler v. U.S., supra.  
Next, he analyzed the issue raised by the Rule 12(b)(6) motion, i.e., whether Filler’s Complaint stated a viable cause of action. Filler v. U.S., supra.  He noted that to survive a Rule 12(b)(6) challenge to a Complaint’s factual allegations, those allegations “must be enough to raise a right to relief above the speculative level”. Filler v. U.S., supra.  The judge found that Filler’s Complaint did not achieve this. Filler v. U.S., supra.  He noted that in analyzing a motion to dismiss for failure to state a claim under Rule 12(b)(6), the judge
`must accept all well-pleaded factual allegations as true and draw all reasonable inferences in . . .[the plaintiff's] favor.’ Boyle v. U.S., 200 F.3d 1369 (U.S. Court of Appeals for the Federal Circuit 2000). The motion will be granted when the facts asserted by the plaintiff fail to `raise a right to relief above the speculative level.’ Am. Contractors Indem. Co. v. U.S., 570 F.3d 1373 (U.S. Court of Appeals for the Federal Circuit.2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)).

In other words, plaintiff's claim must be plausible on its face. Bell Atl. Corp. v. Twombly, supra.  `A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’ Ashcroft v. Iqbal, 556 U.S. 662 (2009). . . . `Conclusory allegations of law and unwarranted inferences of fact do not,’ however, `suffice to support a claim.’ Bradley v. Chiron Corp., 136 F.3d 1317 (U.S. Court of Appeals for the Federal Circuit 1998).

Where, as here, the plaintiff is pro se, his pleading is held `to less stringent standards than formal pleadings drafted by lawyers.’ Haines v. Kerner, 404 U.S. 519 (1972). Nonetheless, even taking into consideration Dr. Filler's pro se status, the Court concludes that his allegations are insufficient, as a matter of law, to state a claim for relief under the Takings Clause. Specifically, the facts Dr. Filler alleges in his complaint do not support his conclusory assertion that Ms. Walker acted on behalf of the government when she posted the comments . . . on

Further, and in any event, Dr. Filler's medical license does not, as a matter of law, constitute a compensable property interest within the meaning of the Takings Clause.
Filler v. U.S., supra.  
The judge then analyzed each factor in detail, beginning with the issue of whether Walker acted on behalf of the government in posting the comments at issue:

It is well settled that a compensable taking does not arise unless there is action by the government and even then, ‘”only if the government action in question is authorized,’” PI Elec. Corp. v. U.S., 55 Fed. Cl. 279 (U.S. Court of Federal Claims 2003) (quoting Del–Rio Drilling Programs. Inc. v. U.S., 146 F.3d 1358 (U.S. Court of Appeals for the Federal Circuit 1998)). . . . If the action is not authorized, it `is not the act of the government’ at all. Blanchette v. Conn. Gen. Ins. Corps., 419 U.S. 102 (1974) (quoting) Hooe v. U.S., 218 U.S. 322 (1910)). An action by a government agent is authorized, and implicates the Takings Clause, if the agent `act[s] within the general scope of [her] duties, i.e., if [her] actions are a “natural consequence of Congressionally approved measures,” or are pursuant to “the good faith implementation of a Congressional Act.”’ Del–Rio Drilling Programs. Inc. v. U.S., supra. . . .

Here, the factual allegations in Dr. Filler's complaint do not support his conclusory assertion that Ms. Walker was acting in her official capacity or on behalf of the government when she posted the comments in question. In fact, his factual assertions actually demonstrate precisely the opposite. Dr. Filler alleges in his complaint that Ms. Walker is employed as a marine biologist at the NMFS within the NOAA, a division of the Department of Commerce. . . .

This agency's authority derives from the Magnuson–Stevens Fishery Conservation and Management Act, 16 U.S. Code Ch. 38, the Marine Mammal Protection Act, 16 U.S.C. Ch. 31, and the Endangered Species Act, 16 U.S.C. Ch. 35. These statutes authorize the NMFS to manage, conserve, and protect living marine resources in waters controlled by the United States. NMFS does not have the authority to regulate medical practices or drug safety. Therefore, even if Ms. Walker's posting on is construed as, in Dr. Filler's words, `a public warning about danger to the health and safety of the United States populace,’ Am. Compl. ¶ 4, such an action would not fall within the official scope of authority of an employee of the NMFS generally, much less of Ms. Walker in particular.

In asserting that Ms. Walker acted `within the scope of her authorized duties,’ . . . Am. Dr. Filler cites various statutes and regulations reflecting `[t]he interest of the United States in  . . . preventing the spread of . . . BSE.’ Amended Complaint. ¶¶ 51, 55. . . .  (citing a provision within the Animal Health Protection Act, several provisions within Each provision Dr. Filler lists, however, falls within the enforcement purview of either the Department of Agriculture or the Food and Drug Administration; none implicates the authority of the Department of Commerce, let alone the NOAA or NMFS. See, e.g.,7 U.S. Code § 8302(14) (indicating the Secretary of Agriculture is responsible for the implementation of the Animal Health Protection Act); 21 C.F.R. § 810.2 (regulations in the part of the C.F.R. implement the Federal Food, Drug, and Cosmetic Act). Dr. Filler recognizes that the authorities he cites for `[t]he role of the United States in public warnings,’ 21 C.F.R. §§ 7.42, 810.2, , are 
, are addressed to the Food and Drug Administration. . . .

Thus, they cannot have provided the authorization for Ms. Walker to post an anonymous comment regarding the safety of any particular medical practice on

Leaving aside the conclusory assertions in Dr. Filler's complaint, such as the statement that `[t]he purpose of [Ms. Walker's] action was to serve the public purpose of protecting the United States population from infection by the Bovine Spongiform Encephalopathy prion agent,’ . . . the facts alleged in the complaint do not raise the prospect, even at the speculative level, that Ms. Walker acted in her capacity as a government official when she posted the comment on

To the contrary, the facts show Ms. Walker acted in her individual capacity as a former patient of Dr. Filler for her independent purpose of conveying her personal views on the efficacy and advisability of the treatment she believed Dr. Filler had used on her and other patients. Therefore, because he failed to sufficiently allege an authorized government action that could conceivably constitute a taking, Dr. Filler's complaint must be dismissed.
Filler v. U.S., supra.  
The judge also found that a medical license is not a “property interest within the meanings of the Takings Clause.”  Filler v. U.S., supra.  He explained that a “threshold element of a takings claim is whether the plaintiff has a cognizable property interest for purposes of the 5th Amendment.”  Filler v. U.S., supra.  If the plaintiff cannot show he/she has such an interest, the claim will fail.  Filler v. U.S., supra.  The judge found that “even assuming Dr. Filler had alleged sufficient facts to establish that Ms. Walker was acting within the scope of her duties when she posted the comments at issue, his claim would necessarily fail because, as a matter of law, a medical license does not constitute property cognizable under the Takings Clause.” Filler v. U.S., supra.  
He explained that the Constitution “`neither creates nor defines’” the property interests that are compensable under the Takings Clause of the 5th Amendment. Filler v. U.S., supra.  Courts therefore look to property law to decide if a particular item qualifies as property under the Takings Clause. Filler v. U.S., supra.  He noted that the right to
`sell, assign, or otherwise transfer are traditional hallmarks of property.’ Conti v. U.S., 291 F.3d 1334 (U.S. Court of Appeals for the Federal Circuit 2002). . . . Accordingly, the Federal Circuit has held that, assuming `the absence of express statutory language precluding the formation of a property right,’ a cognizable property interest in a government permit or license requires both a `right to transfer’ and a `right to exclude.' Members of Peanut Quota Holders Ass'n, Inc. v. United States, 421 F.3d 1323 (U.S. Court of Appeals for the Federal Circuit 2005). The government argues that . . . a medical license does not meet either of these requirements. The Court agrees.
Filler v. U.S., supra.  
He noted, first, that “it is clear” that the holder of a medical license
cannot sell or transfer his medical license to another individual or entity; a medical license can only be obtained by meeting the requirements specified in state law for the holders of such licenses. See Webster v. U.S., 74 Fed. Cl. 439 (U.S. Court of Federal Claims 2006) (`[b]ecause plaintiff does not have the right to sell . . . or otherwise transfer her medical license, a medical license does not possess the requisite indicia of transferability’). 

Dr. Filler's arguments to the contrary are unpersuasive. . . . He argues, for instance, that a medical license is subject to forfeiture under 21 U.S. Code § 853 if it is used to commit a controlled substances violation, and that generally, a civil forfeiture order transfers title in the property to the government. . . . As the government observes, however, whether something is transferable for purposes of establishing a compensable property interest depends upon `whether the citizen had the right[ ] to . . . transfer[ ] or dispose of the property,’ not whether the government could compel the citizen to relinquish it. . . .
Filler v. U.S., supra.  
Walker also argued that “property compensable under the takings clause must possess certain indicia of private property, including the ability to transfer and the ability to exclude others from use or enjoyment of that property.” Filler v. U.S., supra.  The judge agreed, explaining that in Members of the Peanut Quota Holders Ass'n v. U.S., 421 F.3d 1323 (U.S. Court of Appeals for the Federal Circuit 2005), the court held that
`decisions by both the Supreme Court and this court imply that a compensable interest is indicated by the absence of express statutory language precluding the formation of a property right in combination with the presence of the right to transfer and the right to exclude.’ . . . Thus, plaintiff is required to demonstrate a right to transfer and to exclude in order to present a valid compensable property interest.
Filler v. U.S., supra.  
The judge explained that medical licenses are not private property “as they do not possess the characteristics of exclusivity and right to transfer”. Filler v. U.S., supra.  He noted that medical licenses are not “exclusive” because “the number of medical licenses issued is not subject to a fixed limit by the Government”.  Filler v. U.S., supra.  Walker also noted that the medical license was not “property” under the 5th Amendment because it was not transferable, i.e., Filler could not “sell, assign or otherwise transfer” the license to someone else. Filler v. U.S., supra.  
For these and other reasons, he granted the government’s Rule 12(b)(6) motion to dismiss Filler’s Complaint and the cause of action predicated on it with prejudice. Filler v. U.S., supra.  

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