587 U.S. 218
U.S.2019Background
- Congress created the Tennessee Valley Authority (TVA) as a hybrid, government-owned corporation that "may sue and be sued in its corporate name" (16 U.S.C. §831c(b)).
- TVA operates both governmental functions (e.g., eminent domain, law enforcement) and commercial functions (producing and selling electricity to millions).
- Gary Thacker was injured (and his passenger killed) when his boat struck a TVA power line that had fallen into the Tennessee River during TVA line-repair operations; he sued the TVA for negligence.
- District Court dismissed the suit on sovereign-immunity grounds; the Eleventh Circuit affirmed, applying the FTCA discretionary-function test to bar the suit.
- The Government argued that an implied discretionary-function limitation should be read into the TVA’s sue-and-be-sued clause, effectively making TVA immune for discretionary acts.
- The Supreme Court granted certiorari to decide whether the TVA’s waiver of immunity is subject to a discretionary-function exception and reversed the Eleventh Circuit.
Issues
| Issue | Thacker's Argument | TVA/Government's Argument | Held |
|---|---|---|---|
| Whether the TVA’s sue-and-be-sued clause is limited by a discretionary-function exception like the FTCA’s | The clause waives sovereign immunity for TVA torts and does not contain a discretionary-function limitation | The clause should be read to include an FTCA-style discretionary-function exception (or courts should imply one) | The TVA clause contains no such express limit and courts may not wholesale import the FTCA discretionary-function exception |
| Whether the FTCA discretionary-function exception governs TVA suits | FTCA does not apply to TVA claims because Congress excluded TVA from the FTCA | Government contended courts should read an implied similar limit into the TVA clause despite the FTCA exclusion | FTCA’s discretionary-function exception does not apply to TVA; Congress explicitly excluded TVA from FTCA provisions |
| Whether Burr permits implying a broad discretionary-function exception into sue-and-be-sued clauses | Implied exceptions are narrow; Burr allows implication only where clearly necessary to avoid grave interference or inconsistent with statutory scheme | Government urged Burr-based implied exception for all discretionary-function suits to prevent judicial second-guessing and interference | Burr permits only narrow implied exceptions; courts must decide whether the challenged activity is governmental and whether barring suit is necessary to avoid grave interference |
| How case should proceed on remand | Thacker: court should apply commercial/governmental distinction; if commercial, suit proceeds like against private actor | TVA: continued immunity for discretionary acts, including in commercial context | Remand: trial court must decide if the conduct was commercial or governmental; commercial acts subject to suit; governmental acts barred only if clear showing that suits would gravely interfere with function |
Key Cases Cited
- Federal Housing Admin. v. Burr, 309 U.S. 242 (1940) (sue-and-be-sued clauses are broadly construed but may bear a narrow implied restriction when suits conflict with statutory scheme or would gravely interfere with governmental functions)
- FDIC v. Meyer, 510 U.S. 471 (1994) (courts should not graft FTCA limitations onto another agency’s sue-and-be-sued clause absent congressional intent)
- United States v. Gaubert, 499 U.S. 315 (1991) (exposition of the FTCA discretionary-function exception)
- Loeffler v. Frank, 486 U.S. 549 (1988) (sue-and-be-sued clause waives sovereign immunity that would otherwise apply to federal entities)
- TVA v. Hill, 437 U.S. 153 (1978) (background on TVA as a hybrid public corporation)
- Franchise Tax Bd. v. Postal Service, 467 U.S. 512 (1984) (liability of public corporations engaged in commercial activities should be similar to private enterprises)
- Cutter v. Wilkinson, 544 U.S. 709 (2005) (court of review principles cited regarding remand)