108 S.Ct. 1954

(Cite as: 486 U.S. 531, *535, 108 S.Ct. 1954, **1958)

F.2d 1322, supra, with Baker v. United States, 817 F.2d 560, 564-566 (CA9 1987) (holding that discretionary function exception did not bar suit alleging a negligent decision to license a polio vaccine); Loge v. United States, 662 F.2d 1268, 1272-1273 (CA8 1981) (holding that discretionary function exception did not bar suit alleging negligence in both the licensing of a polio vaccine and the release of a particular vaccine lot). We now reverse the Third Circuit's judgment.

II

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." [FN2]

FN2. There is currently no dispute in this case as to whether petitioners have stated a claim that falls within this general waiver of immunity. Although the Government raised this issue in its motion to dismiss petitioners' suit, the District Court found that the complaint stated a claim under the relevant state law, and the Government declined to request certification of this decision for immediate appeal.

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).

*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

Page 5

and its desire to protect certain governmental activities from exposure to suit by private individuals." United States v. Varig Airlines, 467 U.S., at 808, 104 S.Ct., at 2761-2762.

[1][2] 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 813, 104 S.Ct., at 2764. 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 Dalehite v. United States, 346 U.S. 15, 34, 73 S.Ct. 956, 967, 97 L.Ed. 1427 (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 **1959 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. Westfall v. Erwin, 484 U.S. 292, 296-297, 108 S.Ct. 580, ----, 98 L.Ed.2d 619 (1988) (recognizing that conduct that is not the product of independent judgment will be unaffected by threat of liability).

[3] 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 *537 'second-guessing' of legislative and administrative decisions grounded in social, economic, and political policy through the

108 S.Ct. 1954

(Cite as: 486 U.S. 531, *537, 108 S.Ct. 1954, **1959)

medium of an action in tort." United States v. Varig Airlines, supra, at 814, 104 S.Ct., at 2764-2765. The exception, properly construed, therefore protects only governmental actions and decisions based on considerations of public policy. See Dalehite v. United States, supra, at 36, 73 S.Ct., at 968 ("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.

Court

This Court's decision in Varig Airlines illustrates these propositions. The two cases resolved in that decision were tort suits by the victims of airplane accidents who alleged that the Federal Aviation Administration (FAA) had acted negligently in certifying certain airplanes for operation. The characterized the suits as challenging the FAA's decision to certify the airplanes without first inspecting them and held that this decision was a discretionary act for which the Government was immune from liability. In reaching this result, the Court carefully reviewed the statutory and regulatory scheme governing the inspection and certification of airplanes. Congress had given the Secretary of Transportation broad authority to establish and implement a program for enforcing compliance with airplane safety standards. In the exercise of that authority, the FAA, as the Secretary's designee, had devised a system of "spot-checking" airplanes for compliance. This Court first held that the establishment of that system was a discretionary function within the meaning of the FTCA because it represented a policy determination as to how best to "accommodat[e] the goal of air transportation safety and the reality of finite agency resources." 467 U.S., at 820, 104 S.Ct., at 2767-2768. The Court then stated that the discretionary function exception also protected "the acts of FAA employees in executing the 'spot-check' program" because under this program the employees "were specifically empowered *538 to make policy judgments regarding the degree of confidence that might reasonably be placed in a given manufacturer, the need to maximize compliance with FAA

Page 6

regulations, and the efficient allocation of agency resources." Ibid. Thus, the Court held the challenged acts protected from liability because they were within the range of choice accorded by federal policy and law and were the results of policy determinations. [FN3]

FN3. The decision in Indian Towing Co. v. United States, 350 U.S. 61, 76 S.Ct. 122, 100 L.Ed. 48 (1955), also illuminates the appropriate scope of the discretionary function exception. The plaintiff in that case sued the Government for failing to maintain a lighthouse in good working order. The Court stated that the initial decision to undertake and maintain lighthouse service was a discretionary judgment. See id., at 69, 76 S.Ct., at 126-127. The Court held, however, that the failure to maintain the lighthouse in good condition subjected the Government to suit under the FTCA. See ibid. The latter course of conduct did not involve any permissible exercise of policy judgment.

[4] In restating and clarifying the scope of the discretionary function exception, we intend specifically to reject the Government's argument, pressed both in this Court and the Court of Appeals, that the **1960 exception precludes liability for any and all acts arising out of the regulatory programs of federal agencies. That argument is rebutted first by the language of the exception, which protects "discretionary" functions, rather than "regulatory" functions. The significance of Congress' choice of language is supported by the legislative history. As this Court previously has indicated, the relevant legislative materials demonstrate that the exception was designed to cover not all acts of regulatory agencies and their employees, but only such acts as are "discretionary" in nature. [FN4] See Dalehite v. United States, supra, 346 U.S., at 33-34, 73 S.Ct., at 966-967. *539 This coverage accords with Congress' purpose in enacting the exception: to prevent "LjJudicial intervention in the political, social, and economic judgments" of governmental--including regulatory--agencies. United States v. Varig Airlines, 467 U.S., at 820, 104 S.Ct., at 2767-2768. Moreover, this Court twice before has rejected a variant of the Government's position. See Indian Towing Co. v. United States, 350 U.S. 61, 64

WESTLAW

108 S.Ct. 1954

(Cite as: 486 U.S. 531, *539, 108 S.Ct. 1954, **1960)

65, 76 S.Ct. 122, 124, 100 L.Ed. 48 (1955) (disapproving argument that FTCA precludes liability for the performance of "uniquely governmental functions"); Rayonier, Inc. v. United States, 352 U.S. 315, 318-319, 77 S.Ct. 374, 376-377, 1 L.Ed.2d 354 (1957) (same). [FN5] And in Varig, we ignored the precise argument the Government makes in this case, focusing instead on the particular nature of the regulatory conduct at issue. To the extent we have not already put the Government's argument to rest, we do so now. discretionary function exception applies only to conduct that involves the permissible exercise of policy judgment. The question in this case is whether the governmental activities challenged by petitioners are of this discretionary nature.

The

FN4. The House of Representatives Report on the final version of the FTCA discussed the application of the discretionary function exception to the activities of regulatory agencies by stating that it would preclude application of the Act to "a claim against a regulatory agency, such as the Federal Trade Commission or the Securities and Exchange Commission, based upon an alleged abuse of discretionary authority by an officer or employee, whether or not negligence is alleged to have been involved.... The bill is not intended to authorize a suit for damages to test the validity of or provide a remedy on account of such discretionary acts even though negligently performed and involving an abuse of discretion. Nor is it desirable or intended that the constitutionality of legislation, or the legality of a rule or regulation should be tested through the medium of a damage suit for tort. However, the common-law torts of employees of regulatory agencies would be included within the scope of the bill to the same extent as torts of nonregulatory agencies." H.R.Rep. No. 1287, 79th Cong., 1st Sess., 6 (1945). This passage illustrates that Congress intended the discretionary function exception to apply to the discretionary acts of regulators, rather than to all regulatory acts.

FN5. The Government's position in this case at times appears to replicate precisely the position expressly rejected in Indian Towing and Rayonier. See Brief for United States 20 (arguing that Congress intended to preserve immunity for "core governmental function[s]"); id., at 16.

III

Page 7

Petitioners' suit raises two broad claims. First, petitioners assert that the DBS violated a federal statute and 540 accompanying regulations in issuing a license to Lederle Laboratories to produce Orimune. Second, petitioners argue that the Bureau of Biologics of the FDA violated federal regulations and policy in approving the release of the particular lot of Orimune that contained Kevan Berkovitz's dose. We examine each of these broad claims by reviewing the applicable regulatory scheme and petitioners' specific allegations of agency wrongdoing. [FN6] Because the decision **1961 we review adjudicated a motion to dismiss, we accept all of the factual allegations in petitioners' complaint as true and ask whether, in these circumstances, dismissal of the complaint was appropriate.

FN6. The parties to this case also have disputed in their briefs and arguments before this Court the applicability of the discretionary function exception to a claim alleging that the DBS wrongfully chose not to revoke Lederle Laboratories' license to manufacture Orimune. Neither the Court of Appeals nor the District Court specifically addressed this issue. Moreover, petitioners did not raise the issue in their petition for a writ of certiorari. We accordingly do not consider or decide the question whether the discretionary function exception bars a claim against the Government for failure to revoke a license to manufacture a polio vaccine.

A

Under federal law, a manufacturer must receive a product license prior to marketing a brand of live oral polio vaccine. See 58 Stat. 702, as amended, 42 U.S.C. § 262(a). In order to become eligible for such a license, a manufacturer must first make a sample of the vaccine product. See 42 CFR § 73.3 (Supp.1964); 21 CFR § 601.2 (1987). [FN7] This process *541 begins with the selection of an original virus strain. The manufacturer grows a seed virus from this strain; the seed virus is then used to produce monopools, portions of which are combined to form the

WESTLAW

108 S.Ct. 1954

(Cite as: 486 U.S. 531, *541, 108 S.Ct. 1954, **1961)

must

21

consumer-level product. Federal regulations set forth safety criteria for the original strain, see 42 CFR § 73.110(b)(2) (Supp.1964); CFR §§ 630.10(b)(2) (1987), the seed virus, see 42 CFR §§ 73.110(b)(3), (4) (Supp.1964); 21 CFR §§ 630.10(b)(3), (4) (1987), and the vaccine monopools, see 42 CFR § 73.114 (Supp.1964); 21 CFR § 630.16 (1987). Under the regulations, the manufacturer conduct a variety of tests to measure the safety of the product at each stage of the manufacturing process. See 42 CFR §§ 73.110, 73.114 (Supp.1964); 21 CFR §§ 630.10, 630.16 (1987). Upon completion of the manufacturing process and the required testing, the manufacturer is required to submit an application for a product license to the DBS. See 42 CFR § 73.3 (Supp.1964); 21 CFR § 601.2 (1987). [FN8] In addition to this application, the manufacturer must submit data from the tests performed and a sample of the finished product. Ibid.

FN7. The DBS issued a license to Lederle Laboratories to produce Orimune in 1963. The first citation in the text is to the regulation in effect at that time. Where the regulation has remained substantially in the same form, a parallel citation is given to the current regulations. Manufacturers are required to obtain an establishment license in addition to the product license. See 42 CFR §§ 73.2-73.4 (Supp.1964); 21 CFR §§ 601.1-601.2, 601.10 (1987). Petitioners have not challenged the issuance of an establishment license to Lederle Laboratories.

Page 8

upon a showing that the establishment and the products for which a license is desired meet standards, designed to insure the continued safety, purity, and potency of such products, prescribed in regulations, and licenses for new products may be issued only upon a showing that they 542 meet such standards. All such licenses shall be issued, suspended, and revoked as prescribed by regulations...." § 351(d), 58 Stat. 702-703, as amended, 42 U.S.C. § 262(d).

A regulation similarly provides that "[a] product license shall be issued only upon examination of the product and upon a determination that the product complies with the standards prescribed in the regulations...." 42 CFR § 73.5(a) (Supp.1964); see 21 CFR § 601.4 (1987). In addition, a regulation states that "[a]n application for license shall not be considered as filed" until the DBS receives the information and data regarding the product that the manufacturer is required to submit. 42 CFR § 73.3 (Supp.1964); 21 CFR § 601.2 (1987). These statutory and regulatory provisions require the DBS, prior to issuing a product license, to receive all data the manufacturer **1962 is required to submit, to examine the product, and to make a determination that the product complies with safety standards.

[5] Petitioners' first allegation with regard to the licensing of Orimune is that the DBS issued a product license without first receiving data that the manufacturer must submit showing how the product, at the various stages of the manufacturing process, matched up against regulatory safety standards. See App. 12-13; Brief for Petitioners 5-6. The discretionary function exception does not bar a cause of action based on this allegation. The statute and regulations described above require, as a precondition to licensing, that the DBS receive certain test data from the manufacturer relating to the product's compliance with regulatory standards. See § 351(d), 58 Stat. 702-703, as amended, 42 U.S.C. § 262(d) (providing that a license shall issue "only upon a showing" by the manufacturer); 42 CFR § 73.3 (Supp.1964); 21 CFR § 601.2 (1987) (providing that application for license shall be deemed as filed

108 S.Ct. 1954

(Cite as: 486 U.S. 531, *542, 108 S.Ct. 1954, **1962)

only upon receipt of relevant test data). The DBS has no discretion to issue a license without first receiving the required test data; to do so would violate a specific statutory *543 and regulatory directive. Accordingly, to the extent that petitioners' licensing claim is based on a decision of the DBS to issue a license without having received the required test data, the discretionary function exception imposes no bar.

Petitioners' other allegation regarding the licensing of Orimune is difficult to describe with precision. Petitioners contend that the DBS licensed Orimune even though the vaccine did not comply with certain regulatory safety standards. See App. 12; Brief for Petitioners 4-6. [FN9] This charge may be understood in any of three ways. First, petitioners may mean that the DBS licensed Orimune without first making a determination as to whether the vaccine complied with regulatory standards. Second, petitioners may intend to argue that the DBS specifically found that Orimune failed to comply with certain regulatory standards and nonetheless issued a license for the vaccine's manufacture. Third, petitioners may concede that the DBS made a determination of compliance, but allege that this determination was incorrect. Neither 544 petitioners' complaint nor their briefs and argument before this Court make entirely clear their theory of the case.

FN9. Petitioners point to two specific regulatory standards that the product allegedly failed to satisfy. First, petitioners claim that an original virus strain from which the vaccine was made did not comply with the requirement that the strain be "free of harmful effect upon administration in the recommended dosage to at least 100,000 people susceptible to poliomyelitis." 42 CFR § 73.110(b)(2)(i) (Supp.1964); see 21 CFR § 630.10(b)(2)(i) (1987). Second, petitioners assert that the strain, a seed virus, a vaccine monopool, and the ultimate vaccine product failed to comply with the regulatory scheme's neurovirulence requirement. See 42 CFR §§ 73.110(b)(2)(ii), 73.110(b)(4), 73.114(b)(1) (Supp.1964); 21 CFR §§ 630.110(b)(2)(ii), 630.110(b)(4), 630.16(b)(1) (1987). Neurovirulence is the capacity of an

Page 9

infectious agent to produce pathologic effects on the central nervous system. In this context, it refers to the vaccine's ability to cause paralytic poliomyelitis. The neurovirulence of a vaccine product is tested by injecting the product into monkeys. The product meets the neurovirulence criterion only if a specified number of the animals survive and a "comparative analysis" demonstrates that the neurovirulence of the vaccine product "does not exceed" the neurovirulence of a reference product previously selected by the agency. 42 CFR § 73.114(b)(1)(iii) (Supp.1964); 21 CFR § 630.16(b)(1)(iii) (1987).

[6][7] 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 **1963 from this mandated procedure. [FN10] 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.

FN10. Even the Government conceded at oral argument that the DBS has no discretion to issue a product license without an examination of the product and a determination that the product complies with regulatory standards. The transcript reads: "QUESTION: [Supposing the DBS] did not make any examination of the application at all, or any determination other than some papers have been filed and I will now issue the license. "Would that comply with the regulation? "[COUNSEL]: No, it would not comply with the regulation.

WESTLAW