Jessie Williams was a customer of Family Bank & Trust Company in Illinois. Following a Federal Deposit Insurance Corporation (FDIC) routine examination in late 2005, Family Bank stopped making loans to Williams, supposedly at the behest of FDIC Associate Examiner Jerry Fleming. The alleged catalyst for Fleming’s decision was a racially motivated bias against Williams and other African-Americans. In response, Williams sued Family Bank, the United States, and Fleming, alleging various causes of action arising under the Constitution, state law, and the Federal Tort Claims Act (FTCA), 28 U.S.C. §§ 1346(b), 2671-80 (1946). The district court dismissed the claim against Family Bank because Family Bank was not a state actor, as is required for a properly pled Fifth Amendment violation. It also dismissed the claim against the United States because the FTCA expressly exempts the United States from suit in slander actions. As a consequence of the FTCA dismissal, the district court found that the FTCA’s judgment bar applied to prohibit Williams’s remaining Bivens suit against Fleming, resulting in a dismissal of his third and final claim from federal court. It is the dismissal of Fleming on the basis of the judgment bar that Williams challenges on appeal. We affirm.
I. Background
Jessie Williams was a customer of Family Bank with close to three million dollars in outstanding personal and business loans. In late 2005, the FDIC, led by Associate Examiner Jerry Fleming, conducted a routine safety and soundness examination at Family Bank. At the time of the examination, Williams was in good standing and had never been late with a payment.
Williams alleges that during the examination, Fleming made racially discriminatory statements to Family Bank’s President, James Zaring, about the city of Harvey, Illinois, and about the bank’s practice of initiating loans in the predominantly African-American suburb. Fleming and other FDIC employees also supposedly made racially disparaging remarks about Williams specifically. Williams alleges that during this examination, Fleming ordered Zaring and Family Bank to refuse all further loans to Williams and other members of his community because of their race.
Williams alleges that as a result of these statements and the directive issued by Fleming, any subsequent loan applications that Williams submitted were not considered in the ordinary course of business and were instead denied immediately. Williams claims to have been denied credit by several other banking institutions as a direct result of Fleming’s actions.
Williams filed a second amended complaint in April 2008 asserting a claim against Family Bank arising under the Fifth Amendment; a claim against Family Bank and, through the FTCA, against the United States, the basis of which was the Illinois Human Rights Act, which makes it a civil rights violation for a “financial institution” to unlawfully discriminate in the provision of credit; and a Bivens claim against Fleming based on the Fifth Amendment.
The district court dismissed Family Bank from the suit because it could not violate the Constitution as a non-state actor. The district court also granted the United States’ motion to dismiss the FTCA claim against it in July 2008, finding that the FTCA’s reservation of sovereign immunity in 28 U.S.C. § 2680(h) was applicable because it prohibits suit against the United States for “[a]ny claim arising out of ... abuse of process, libel, slander, misrepresentation, deceit, or interference with
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contractual rights.” In determining the applicability of § 2680(h), the district court characterized Williams’s claim as one for slander, because no independent tort of racial discrimination exists under Illinois law, and the essence of the claim alleged fit best under the rubric of slander. The district court found that, in any case, the FDIC did not act as a financial institution with regard to Williams,
1
so Williams failed to state a claim under state law, which is a prerequisite to an FTCA claim.
See, e.g., Doe v. United States,
In November 2008, Fleming filed a motion to dismiss based on the FTCA’s judgment bar, 28 U.S.C. § 2676, arguing that the court’s FTCA judgment for the United States barred Williams’s individual capacity claim against Fleming. In April 2009, the district court granted the motion to dismiss, finding that the FTCA’s judgment bar was applicable. It reached this conclusion by referencing our decision in
Hoosier Bancorp of Indiana v. Rasmussen,
II. Analysis
Generally, an individual may not sue the United States for tortious conduct committed by the government or its agents.
United States v. Navajo Nation,
— U.S. -,
The judgment bar recognizes that the purpose of sovereign immunity is to protect the United States not simply from the financial consequences of suit, but
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also from the burden of defending against suit.
See, e.g., Hoosier Bancorp,
Although we held in
Hoosier Bancorp
that “
‘any
FTCA judgment, regardless of its outcome, bars a subsequent
Bivens
action on the same conduct that was at issue in the prior judgment,’ ”
Instead, we base our decision on our holding in
Collins v. United States,
Because we are reviewing the district court’s interpretation of the judgment bar
de novo, Manning v. United States,
In
Collins,
we discussed our approach to dealing with the exceptions listed in § 2680. We noted that ours is a minority position, but nevertheless held firm in our conviction that ours is the correct one.
Second, we noted the illogic of the argument that the federal courts do not have jurisdiction to decide cases arising under § 2680. “Obviously the federal courts are *824 authorized to decide suits under the Federal Tort Claims Act; indeed, no other court system is.” Id. If in fact federal courts could not decide FTCA cases, the statute would be a nullity, because no decision-maker would be authorized to hear these cases.
Finally, we explained that the confusion of whether the § 2680 exceptions were jurisdictional perhaps stemmed in part from cases treating defenses to liability as “an automatic corollary of the [FTCA’s] constituting a waiver of the federal government’s sovereign immunity from suit,” rather than analyzing the issue as distinct from jurisdictional analysis. Id. at 837. This argument is problematic for an obvious reason — it confuses jurisdiction, or the court’s power to decide a case, with defenses, or the government’s exceptions from suit.
Instead, our position recognized that the proper inquiry is not one of jurisdiction, but whether the United States has a defense to suit. In conducting this analysis, lower courts should scrutinize the cause of action, and if a § 2680 exception applies, then courts should relieve the United States from the burden of defending against a lawsuit. The rationale for this dismissal is not that the court lacks jurisdiction over the FTCA issue, but that the United States has a defense that relieves it from suit.
Because the cause of action in this case was dismissed pursuant to § 2680(h), we hold that the claim was not dismissed for lack of jurisdiction, but for the existence of a defense. Therefore, the dismissal was on the merits, and the determination that the judgment bar prevented Williams’s remaining Bivens action was correct.
III. Conclusion
Because William’s suit against the United States was on the merits, and not for lack of subject matter jurisdiction, his remaining Bivens suit was properly barred by section § 2676 of the FTCA. The dismissal of Williams’s claim against Fleming is Affirmed.
Notes
. The district court did not address the question of whether the FDIC could ever be a financial institution. Because it found that the FDIC did not act as a financial institution in this instance, it prudently reserved judgment on that broader question.
. We did not have occasion in
Hoosier Ban-corp
to address specifically whether a judgment granted on the basis of § 2680 was a judgment for purposes of the judgment bar statute. Instead, we focused on whether a judgment must be favorable for the judgment bar to apply.