FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

KEVIN ABBEY; et al.

*

, 

Plaintiffs-Appellants, 

 v. 

UNITED STATES OF AMERICA; 

UNITED STATES DEPARTMENT 

OF THE NAVY, 

Defendants-Appellees, 

and 

TETRA TECH, INC., 

Defendant.

No. 23-15170 

D.C. No. 3:20-cv06443-JD 

OPINION

Appeal from the United States District Court

for the Northern District of California

James Donato, District Judge, Presiding

Argued and Submitted May 15, 2024

San Francisco, California

Filed August 20, 2024

* The court is not listing herein all of the numerous individual plaintiffs 

in this appeal.
2 ABBEY V. USA

Before: Kenneth K. Lee and Daniel A. Bress, Circuit 

Judges, and Gloria M. Navarro,** District Judge.

Opinion by Judge Lee 

SUMMARY***

Federal Tort Claims Act

The panel affirmed the district court’s dismissal for lack 

of subject matter jurisdiction of a Federal Tort Claims Act 

(FTCA) action, brought by current and former San Francisco 

Police Department (SFPD) employees, alleging that the 

United States misled the City of San Francisco and the SFPD 

about the safety of a contaminated former Naval shipyard 

that the City leased to use as a facility for SFPD employees.

The panel held that the FTCA’s misrepresentation 

exception to the sovereign immunity waiver applied because 

it precludes any claims “arising out of” a 

misrepresentation. Plaintiffs’ claims arose out of the Navy’s 

alleged misrepresentations, even if the Navy did not directly 

make them to plaintiffs. 

The panel rejected plaintiffs’ argument that the 

Comprehensive Environmental Response, Compensation, 

and Liability Act (CERCLA) implicitly limited or suspended 

** The Honorable Gloria M. Navarro, United States District Judge for the 

District of Nevada, sitting by designation.

*** This summary constitutes no part of the opinion of the court. It has 

been prepared by court staff for the convenience of the reader.
ABBEY V. USA 3 

the misrepresentation exception because neither the 

statutory text nor canons of statutory construction suggest 

that Congress intended CERCLA to override the FTCA’s 

misrepresentation exception.

COUNSEL

Sara M. Peters (argued), Khaldoun A. Baghdadi, Clifton 

Smoot, and Kelly L. Ganci, Walkup Melodia Kelly & 

Schoenberger, San Francisco, California; Tiffany J. Gates, 

Law Offices of Tiffany J. Gates, San Luis Obispo, 

California; for Plaintiffs-Appellants. 

Albert Lai (argued), Kenneth A. Haywood, Heidy L. 

Gonzalez, and Caroline Stanton, Trial Attorneys; Rosemary 

Yogiaveetil, Assistant United States Attorney; J. Patrick 

Glynn, Director, Torts Branch; August Flentje, Special 

Counsel, Civil Division; Brian M. Boynton, Principal 

Deputy Assistant Attorney General; United States 

Department of Justice, Washington, D.C.; for DefendantsAppellees.
4 ABBEY V. USA

OPINION

LEE, Circuit Judge:

This case addresses the scope of the misrepresentation 

exception to the sovereign immunity waiver under the 

Federal Tort Claims Act (FTCA). While sovereign

immunity generally shields the United States from lawsuits, 

Congress waived it for most tort claims. But the FTCA also

carved out several exceptions to that sovereign immunity

waiver, including for claims “arising out of,” among other 

things, “misrepresentation.” 28 U.S.C. § 2680(h). 

Here, the City of San Francisco leased a former Naval 

shipyard to use as a facility for San Francisco Police 

Department (SFPD) employees. The plaintiffs—current and 

former SFPD employees, along with their family 

members—sued the United States, claiming that it had 

misled the City and the SFPD about the safety of the 

contaminated shipyard. The key question before us is 

whether the FTCA’s misrepresentation exception requires 

the federal government to have made the alleged 

misrepresentations directly to the plaintiffs—or if making 

allegedly false statements to the City or the SFPD is enough 

to invoke this exception and bar the plaintiffs’ claims. 

We hold that the FTCA’s misrepresentation exception to 

the sovereign immunity waiver applies because it precludes

any claims “arising out of” a misrepresentation. 28 U.S.C. 

§ 2680(h). And in our case, the plaintiffs’ claims “arise” out 

of the Navy’s alleged misrepresentations, even if the Navy 

did not directly make them to the plaintiffs. Our precedent—

which directs courts to look at the “gravamen” of the 

complaint—confirms our reading of the FTCA’s 

misrepresentation exception.
ABBEY V. USA 5

We also reject the plaintiffs’ argument that the 

Comprehensive Environmental Response, Compensation, 

and Liability Act (CERCLA) has implicitly limited or 

suspended the misrepresentation exception. 42 U.S.C. 

§ 9620(h)(1). While CERCLA imposes a duty of disclosure 

about environmental health hazards on federally owned 

property, neither the statutory text nor canons of statutory 

construction suggest that Congress intended CERCLA to 

override the FTCA’s misrepresentation exception. We thus 

affirm the district court’s dismissal of the lawsuit for lack of 

subject matter jurisdiction. 

I. Factual Background 

Hunters Point Naval Shipyard is a 965-acre former naval 

base located along the San Francisco Bay. During the Cold 

War, the Naval Radiological Defense Laboratory operated 

there, undertaking research and decontamination of 

radioactive vessels used in nuclear weapon tests. 

In 1989, the Environmental Protection Agency (EPA) 

determined that the shipyard qualified under CERCLA as a 

“Superfund” site, requiring the Navy to remediate it before 

it could be reused. 42 U.S.C. § 9601 et seq. The Navy 

signed an agreement with EPA and California governmental 

entities setting a schedule for environmental remediation. 

The Navy also contracted with Tetra Tech, Inc. to plan and 

oversee testing, investigation, and cleanup activities. 

The plaintiffs allege that the Navy negligently 

supervised Tetra Tech and that Tetra Tech perpetrated 

extensive fraud. Despite these alleged failures, the Navy 

began negotiating a lease of the Building 606 Property at the 

shipyard to the City for use by the SFPD. According to the 

plaintiffs, the Navy “negligently performed its inspection, 

investigation, and record review, and negligently told the 
6 ABBEY V. USA

City that there was no history of any radioactive substances 

at the Building 606 Property.” 

In particular, the plaintiffs assert that the Navy

misrepresented the safety of the site in two 1996 lease 

documents prepared under CERCLA § 120(h)(1)’s 

disclosure requirement. Relying on these alleged 

misrepresentations, the City agreed to lease the site for use 

by the SFPD. The SFPD, too, relied on the Navy’s 

misrepresentations in these two documents. And, as the 

plaintiffs tell it, the Navy and Tetra Tech continued to

misrepresent the safety of the shipyard to the City and the 

SFPD.

As a result of these misrepresentations, SFPD employees

claim that they were exposed to “radiological and nonradiological contamination” at the site, causing health 

problems and elevating their risk of developing lifethreatening diseases.

II. Procedural History

In 2020, the plaintiffs sued the United States. The 

government moved to dismiss for lack of subject matter 

jurisdiction, contending that the claims fall outside the 

United States’ waiver of sovereign immunity. See 28 U.S.C. 

§§ 1346(b), 2671, 2680(a), 2680(h). The district court 

dismissed the First Amended Complaint without prejudice

and advised the plaintiffs that the FTCA’s 

“misrepresentation exception . . . appears likely to bar at 

least some portion” of their claims.

The plaintiffs then filed their Second Amended 

Complaint (SAC), asserting, among other things, negligent 

undertaking, negligent failure to warn, negligent 

supervision, negligence per se, negligent misrepresentation, 
ABBEY V. USA 7 

and negligent infliction of emotional distress. The 

government once again moved to dismiss for lack of subject 

matter jurisdiction. And the district court again dismissed

the complaint on that basis. It concluded that the plaintiffs

had “doubled down on the misrepresentation theory” in the 

SAC. The court reasoned that the “alleged 

misrepresentations in this case are by no means ‘collateral to 

the gravamen’ of the SAC.” See Esquivel v. United States, 

21 F.4th 565, 578 (9th Cir. 2021). Rather, the court stressed,

“[m]isrepresentation is at the heart of all of the claims in the 

SAC.” 

The district court rejected the plaintiffs’ contention that 

the misrepresentation exception did not apply. The plaintiffs 

argued that because the misstatements were made to the City 

and their employer (SFPD)—and not to SFPD employees—

they did not detrimentally rely on the false information, as 

required under the common law tort of misrepresentation. 

The district court reasoned that the “plain language of 28 

U.S.C. § 2680(h) exempts from the FTCA’s waiver of 

sovereign immunity ‘[a]ny claim arising out 

of . . . misrepresentation.’” The court also rejected the 

argument that CERCLA has limited or suspended the 

misrepresentation exception. The district court dismissed 

the SAC with prejudice, and the plaintiffs timely appealed. 

STANDARD OF REVIEW

We review de novo a district court’s dismissal for lack 

of subject matter jurisdiction under the FTCA. Leuthauser 

v. United States, 71 F.4th 1189, 1193 (9th Cir. 2023) (citing 

Foster v. United States, 522 F.3d 1071, 1074 (9th Cir. 

2008)). 
8 ABBEY V. USA

ANALYSIS

I. The FTCA waived sovereign immunity for certain 

tort claims, but not for those arising out of 

misrepresentation.

Although not explicitly mentioned in the Constitution, 

the principle of sovereign immunity long predates the 

American Founding. See Alden v. Maine, 527 U.S. 706, 

715–16 (1999) (surveying English common law on 

sovereign immunity). The Framers accepted this long-held 

view and thus “considered immunity from private suits 

central to sovereign dignity.” Id. at 715; see also The 

Federalist No. 81, p. 511 (B. Wright ed. 1961) (A. Hamilton) 

(“It is inherent in the nature of sovereignty not to be 

amenable to the suit of an individual without its consent.” 

(emphasis in original)). And given this historical backdrop, 

the Supreme Court has recognized that federal courts lack 

jurisdiction over suits against the United States unless “it 

consents to be sued.” United States v. Sherwood, 312 U.S. 

584, 586 (1941). 

Congress, though, enacted the FTCA in 1946, which as 

amended waives immunity for tort claims alleging: 

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 
ABBEY V. USA 9 

claimant in accordance with the law of the 

place where the act or omission occurred.

28 U.S.C. § 1346(b)(1). 

The FTCA, however, clawed back certain classes of tort 

suits from its broad sovereign immunity waiver. It excludes 

from its scope “[a]ny claim arising out of assault, battery, 

false imprisonment, false arrest, malicious prosecution, 

abuse of process, libel, slander, misrepresentation, deceit, or 

interference with contract rights . . . .” Id. § 2680(h) 

(emphasis added). The Supreme Court has long held that

based on the inclusion of both “misrepresentation” and 

“deceit,” section 2680(h) bars claims “arising out of 

negligent, as well as willful, misrepresentation.” United 

States v. Neustadt, 366 U.S. 696, 702 (1961). And the 

misrepresentation exception also encompasses omissions. 

City & Cnty. of S.F. v. United States, 615 F.2d 498, 504–05 

(9th Cir. 1980). 

The “plaintiff bears the burden of persuading the court 

that it has subject matter jurisdiction under the FTCA’s 

general waiver of immunity,” and the United States bears the 

burden of proving that a waiver exception applies. Prescott

v. United States, 973 F.2d 696, 701–02 (9th Cir. 1992) 

(citing 28 U.S.C. § 1346(b)). 
10 ABBEY V. USA

II. The district court properly dismissed the lawsuit 

for lack of subject matter jurisdiction under the 

FTCA’s misrepresentation exception. 

A. Under the plain text of section 2680(h), the 

claims “arise out of” misrepresentation and 

thus fall within the waiver exception. 

Our analysis begins, as it must, with the statutory text. 

Leuthauser, 71 F.4th at 1194. The plain language of 28 

U.S.C. § 2680(h) exempts from the FTCA’s waiver of 

sovereign immunity “[a]ny claim arising out of . . . 

misrepresentation.” The Supreme Court has held that “the 

essence of an action for misrepresentation, whether 

negligent or intentional, is the communication of 

misinformation on which the recipient relies.” Block v. Neal, 

460 U.S. 289, 296 (1983). The question before us is thus

whether the plaintiffs’ claims “arise out of” the Navy’s 

alleged misrepresentations about the safety of the shipyard. 

We hold that they do. 

We have generally given “arising out of” or “arising 

from”—terms commonly used by Congress—a broad 

construction in other statutory contexts. See, e.g., In re 

Tristar Esperanza Props., LLC, 782 F.3d 492, 497 (9th Cir. 

2015); In re Border Infrastructure Env’t Litig., 915 F.3d 

1213, 1220 (9th Cir. 2019). We have held that “arising out 

of” generally means “‘originating from,’ . . . ‘growing out 

of,’ or . . .‘incident to, or having connection with.’” In re 

Tristar, 782 F.3d at 497 (quoting Underwriters at Lloyd’s of 

London v. Cordova Airlines, Inc., 283 F.2d 659, 664 (9th 

Cir. 1960)). 

So by its plain text, section 2680(h) does not merely 

preclude claims for misrepresentation. Rather, it bars any 

claim “arising out of” misrepresentation. Cf. id.; see United
ABBEY V. USA 11

States v. Shearer, 473 U.S. 52, 55 (1985) (plurality opinion) 

(“Section 2680(h) does not merely bar claims for assault or 

battery; in sweeping language it excludes any claim arising 

out of assault or battery.”); Life Partners Inc. v. United 

States, 650 F.3d 1026, 1032 (5th Cir. 2011) (“The FTCA’s 

misrepresentation exception is broad: it bars any claim 

arising out of a misrepresentation—even if the conduct 

underlying the claim may also constitute a tort not barred by 

section 2680(h).”). And here, the claims plainly “arise out 

of” the Navy’s alleged misrepresentations to the City and the 

SFPD about hazardous substances at the shipyard. The 

complaint alleges that the Navy’s misrepresentations to “the 

City . . . about the hazardous substances used and released at 

[the site] was a substantial factor in causing the Plaintiffs’” 

injuries. And the plaintiffs further allege that the SFPD 

expressly relied on these alleged misrepresentations “first in 

relocating hundreds of employees . . . to [the shipyard]” and 

then in “continuing to have [them] work there during Tetra 

Tech’s remediation activities.” In sum, the complaint makes 

clear that the claims arise out of the Navy’s 

misrepresentations—and that they thus fall within the 

FTCA’s misrepresentation exception. 

This reading of the FTCA’s “arising out of” language

dovetails with our case law providing that courts should 

determine whether the government’s misrepresentation 

constitutes the “essence” or “gravamen” of a plaintiff’s 

complaint. See Esquivel, 21 F.4th at 578 (applying the 

misrepresentation exception where the “alleged 

misrepresentation . . . [was] not collateral to the gravamen of 

the complaint”); Sabow v. United States, 93 F.3d 1445, 1456 

(9th Cir. 1996), as amended (Sept. 26, 1996) (“We focus our 

§ 2680(h) inquiry on whether conduct that constitutes an 

enumerated tort is ‘essential’ to a plaintiff’s claim.”); see 
12 ABBEY V. USA

also Mt. Homes, Inc. v. United States, 912 F.2d 352, 355 (9th 

Cir. 1990); Block, 460 U.S. at 296; Neustadt, 366 U.S. at 

704. 

Put another way, our case law indicates that a claim is 

barred as “arising out of” misrepresentation if its

“gravamen” or “essence” is the government’s

communication of false information. Conversely, a claim 

can proceed under the FTCA if it is predicated on “the 

Government’s breach of a different duty”—even if false 

information is collaterally involved. Block, 460 U.S. at 297

(holding that section 2680(h) was inapplicable because “the 

Government’s misstatements [were] not essential to 

plaintiff’s negligence claim”); see also Esquivel, 21 F.4th at 

578. 

In determining the “gravamen” or “essence” of the 

claim, we must “‘look[] beyond the labels,’” and appraise

“the alleged ‘conduct on which the claim is based.’” 

DaVinci Aircraft, Inc. v. United States, 926 F.3d 1117, 1123 

(9th Cir. 2019) (citations omitted). Otherwise, plaintiffs 

could creatively plead around the FTCA’s misrepresentation 

exception. Id. (“[I]f the governmental conduct underlying a 

claim falls within an exception outlined in section 2680, the 

claim is barred, no matter how the tort is characterized.”); 

see also, e.g., Thomas-Lazear v. F.B.I., 851 F.2d 1202, 1207 

(9th Cir. 1988) (reasoning that a “claim for negligent 

infliction of emotional distress is nothing more than a 

restatement of the slander claim, which is barred by section 

2680(h)”). 

Here, the Navy’s alleged misrepresentations are not 

“collateral to the gravamen” of the complaint, Esquivel, 21 

F.4th at 578, but rather “essential” to each claim, see Sabow, 

93 F.3d at 1456; Thomas-Lazear, 851 F.2d at 1207. As the 
ABBEY V. USA 13

district court pointed out, the plaintiffs had “doubled down 

on the misrepresentation theory” in their complaint. And

because the “gravamen” or “essence” of the claims is rooted 

in misrepresentation, they “arise out of” the Navy’s 

allegedly false statements and fall within the FTCA’s 

misrepresentation exception. 

B. The Supreme Court has not required a 

misrepresentation to be made to the plaintiffs 

for the FTCA’s waiver exception to apply. 

Faced with the FTCA’s text and our case law supporting 

that plain meaning construction, the plaintiffs argue that the 

misrepresentation exception does not apply if the false 

information was neither made directly to nor relied on by the 

plaintiffs. Here, they contend, the Navy misrepresented the 

safety of the shipyard to third parties—the City and their 

employer, SFPD—and the plaintiffs themselves did not 

detrimentally rely on those false statements. As the plaintiffs 

have it, they were merely “unfortunate and foreseeable 

victims of the misrepresentations that were made” to and 

relied on by the City in leasing the contaminated property 

from United States. 

The plaintiffs hitch this theory on out-of-context 

language from a pair of Supreme Court cases—Neustadt and 

Block—that observed that Congress contemplated the 

“traditional and commonly understood legal definition of the 

tort of ‘negligent misrepresentation’” in drafting the FTCA 

exceptions. Neustadt, 366 U.S. at 706–07; see also Block, 

460 U.S at 296. Under the traditional tort of negligent 

misrepresentation, detrimental reliance by a plaintiff is an

“essential element” of the claim. And because the City and 

SFPD—not the plaintiffs—detrimentally relied on Navy’s 

misrepresentations, the plaintiffs argue that their claims do 
14 ABBEY V. USA

not fall within the common law definition of the tort of 

negligent misrepresentation. 

We reject the plaintiffs’ argument for several reasons. 

First, neither Neustadt nor Block squarely addressed 

section 2680(h)’s “arising out of” language, so neither 

decision supports—as a matter of statutory construction—

the plaintiffs’ argument that only claims for 

misrepresentations personally relied upon by the plaintiff are 

expressly barred. Cf. Shearer, 473 U.S. at 55 (plurality 

stating that assault and battery exception does not just bar 

claims for assault and battery but those arising out of the 

same). 

Second, neither case addressed the question before us—

whether the misrepresentation exception applies when a 

third-party, rather than the plaintiff, relies on the 

government’s misrepresentations that allegedly injured the 

plaintiff. Rather, in both Neustadt and Block, the Court

emphasized the traditional tort of misrepresentation to 

distinguish between (1) claims grounded in the 

government’s failure “to use due care in communicating 

information” (which are barred by section 2680(h)), and 

(2) negligence claims which may collaterally involve 

misstatements but ultimately center upon “the Government’s 

breach of a different duty” (which are not barred). Block, 

460 U.S. at 297. 

In Neustadt, the Court stressed that section 2680(h) bars 

negligent misrepresentation claims, no matter how a plaintiff 

characterizes them. See 366 U.S. at 703. The Neustadts had 

relied on an appraisal conducted by the Federal Housing 

Administration (FHA) for mortgage insurance purposes. Id. 

at 699–701. But the FHA had failed to identify latent 

structural defects, and the Neustadts later noticed cracks 
ABBEY V. USA 15

forming in the ceilings and walls of their house. Id. at 700.

They sued under the FTCA, alleging that the FHA 

negligently inspected and appraised the property and that 

they justifiably relied on the faulty appraisal. Id. 

The Court held that the claim was barred by section 

2680(h), rejecting the Neustadts’ argument that it arose out 

of the FHA’s negligence, not a misrepresentation. Id. at

706–07. Rather, the Court reasoned, the Neustadts’ claim 

amounted to “the traditional and commonly understood legal 

definition of the tort of ‘negligent misrepresentation,’” id. at

706. The Court explained that to characterize the Neustadts’ 

claims as “‘arising out of’ negligence rather than 

‘misrepresentation,’ . . . is nothing more than an attempt to 

circumvent [section] 2680(h) by denying that it applies to 

negligent misrepresentation.” Id. at 703. So neither 

Neustadt’s holding nor its analysis supports the plaintiffs’ 

argument that the misrepresentation must be made directly 

to the plaintiffs for section 2680(h) to apply. 

Likewise, Block does not add much to the plaintiffs’ 

argument. In that case, the plaintiff, Neal, had secured a loan 

from the Farmers Home Administration (FmHA) for the 

construction of a prefabricated house. Block, 460 U.S at 

290–91. Neal then entered a contract with a builder 

requiring the construction to conform to FmHA-approved 

plans and granting FmHA the right to inspect and supervise 

construction. Id. at 291. A FmHA supervisor inspected the 

home and issued a report confirming that it met FmHA’s 

specifications. Id. at 292. Neal later discovered substantial 

defects and sued under the FTCA. Id. The government 

contended that the claim arose out of her reliance on the 

inspection reports containing misrepresentations about the 

house’s construction. Id. at 297. 
16 ABBEY V. USA

Noting that “the essence of an action for 

misrepresentation . . . is the communication of 

misinformation on which the recipient relies,” the Court 

explained that the misrepresentation exception “does not bar 

negligence actions which focus not on the Government’s 

failure to use due care in communicating information, but 

rather on the Government’s breach of a different duty,” id. 

at 296–97 (emphasis added). Distinguishing Neustadt, the 

Block Court held that Neal’s claim was not barred by section

2680(h) because she “d[id] not seek to recover on the basis 

of misstatements made by FmHA officials.” Id. at 299. The 

Court reasoned that while the FmHA “may have undertaken 

both to supervise construction of Neal’s house and to 

provide Neal information regarding the progress of 

construction, Neal’s action is based solely on the former 

conduct.” Id. (emphasis added). That is, “the FmHA’s duty 

to use due care to ensure that the builder adhered to the 

approved plans and cured all defects before completing 

construction was distinct from any duty to use due care in 

communicating information to [Neal].” Id. at 297. 

In both cases, the Supreme Court referenced the common 

law tort of negligent misrepresentation to distinguish 

between (1) claims in which the government’s 

misstatements are “essential” (which are barred by the 

FTCA) and (2) “negligence actions which focus not on the 

Government’s failure to use due care in communicating 

information, but rather on the Government’s breach of a 

different duty” (which are not precluded by the FTCA). Id. 

And here, as explained earlier, the Navy’s alleged 

misrepresentations are “essential” to the complaint. 

Ignoring this broader context of the decisions, the 

plaintiffs pluck out language from Neustadt and Block

discussing a plaintiff’s detrimental reliance as an element of 
ABBEY V. USA 17

the traditional tort of negligent misrepresentation. But “the 

language of an opinion is not always to be parsed as though 

we [are] dealing with [the] language of a statute.” Reiter v. 

Sonotone Corp., 442 U.S. 330, 341 (1979). Rather, as the 

Supreme Court has stressed, “opinions dispose of discrete 

cases and controversies[,] and they must be read with a 

careful eye to context” and the specific facts at bar. Nat’l 

Pork Producers Council v. Ross, 598 U.S. 356, 373–74 

(2023) (citing Cohens v. State of Virginia, 19 U.S. 264, 399–

400 (1821) (Marshall, C.J.)); see also Cohens, 19 U.S. at 399 

(“It is a maxim not to be disregarded, that general 

expressions, in every opinion, are to be taken in connection 

with the case in which those expressions are used.”). We 

thus reject the plaintiffs’ reading of Block and Neustadt as

requiring detrimental reliance by the plaintiff for the FTCA’s 

misrepresentation exception to apply. 

C. The Ninth Circuit, along with two other circuits,

has applied the misrepresentation exception 

even without detrimental reliance by the 

plaintiff. 

Our decision today is consistent with circuit precedent: 

our circuit has taken a broad view of the FTCA’s 

misrepresentation exception and applied it even if the 

allegedly false statement was not made directly to the 

plaintiff. See Alexander v. United States, 787 F.2d 1349, 

1350–51 (9th Cir. 1986); Lawrence v. United States, 340 

F.3d 952, 958 (9th Cir. 2003). 

In Alexander, the plaintiff received a conditional job 

offer from the Pacific Stock Exchange, which solicited a 

background check from the FBI. 787 F.2d at 1350. The FBI 

sent his “rap sheet,” which “purportedly contained two arrest 

items that should not have been released because they had 
18 ABBEY V. USA

been ordered sealed by a California court.” Id. at 1350. The 

plaintiff then sued the United States, alleging that the 

government negligently failed to excise the information 

from his record. Id. 

We held that the plaintiff’s negligence claim was barred 

by section 2680(h). See id. at 1350–51. In so doing, we 

stressed the “broad reach of the ‘misrepresentation’ 

exception of section 2680(h),” holding that the plaintiff’s

“claim . . . fits squarely into the category of ‘negligent 

misrepresentation,’” id. at 1351. Although we did not 

directly address the question before us today, the facts of the 

case made clear that the alleged misrepresentation was not 

made to the plaintiff but to a third-party, his employer; yet, 

we still held that the exception applied. See id. at 1350–51. 

The plaintiffs’ argument is at odds with the result in 

Alexander. 

Similarly, we adopted a more expansive view of the 

misrepresentation exception in Lawrence, where a minor 

plaintiff was sexually abused by her foster parent, a felon. 

340 F.3d at 953–54. The plaintiff alleged that a federal

marshal and probation officer failed to provide complete and

accurate information to a state licensing agency about the 

felon’s criminal history. Id. at 958. We held that the 

plaintiff’s FTCA claim was barred by the misrepresentation 

exception, stating that the “claim was based on [the federal

officers’] alleged failure to communicate certain information

at the exemption hearing.” Id.

The plaintiffs urge that these cases are not controlling 

because neither Alexander nor Lawrence “‘squarely 

address[ed]’” the reliance issue and thus did not explicitly 

reject the argument that they advance here. United States v.

Kirilyuk, 29 F.4th 1128, 1134 (9th Cir. 2022) (citation 
ABBEY V. USA 19

omitted). Even so, we merely note that our holding today 

tracks our earlier decisions applying section 2680(h) even 

absent personal detrimental reliance by the plaintiff.

We are also not alone in our interpretation of the FTCA’s 

misrepresentation exception. The Eleventh Circuit has 

squarely held that the misrepresentation exception applies 

even if the alleged misrepresentation was neither received 

nor relied on by the plaintiff. JBP Acquisitions, LP v. United

States ex rel. FDIC, 224 F.3d 1260, 1266 (11th Cir. 2000); 

see also Zelaya v. United States, 781 F.3d 1315, 1333 (11th 

Cir. 2015) (explaining that the “phrase ‘arising out of’ is 

interpreted broadly to include all injuries that are dependent 

upon one of the listed torts having been committed”). 

In JBP Acquisitions, the United States had sold plaintiff 

JPB, a real estate investment company, a loan secured by a 

low-income housing project. 224 F.3d at 1262. But, at the 

same time, the government acted as if it still owned the loan 

and negotiated with another entity, which condemned and 

bulldozed the property. Id. The court held that JBP’s claims 

were barred by section 2680(h) because the lawsuit was 

based on the “[g]overnment’s misrepresentation to [the 

bulldozing purchaser] regarding [the government’s] current 

ownership of the loan.” Id. at 1265 (emphasis deleted). The 

court held that “it does not matter for purposes of the 

misrepresentation exception whether the misrepresentations

causing JBP’s claims were made directly to it or to some 

third party.” Id. at 1266.1 

1 The court “emphasize[d] that at its core the negligent ‘act’ is the 

Government’s misrepresentation” both to the bulldozing purchaser 

“regarding its ownership interest in the Property and its 
20 ABBEY V. USA

The Fifth Circuit, too, has similarly applied the 

misrepresentation exception to bar FTCA claims when a 

plaintiff’s alleged injury results from third-party reliance on 

the government’s misrepresentations. See, e.g., Baroni v.

United States, 662 F.2d 287, 288–89 (5th Cir. 1981) 

(applying the misrepresentation exception to bar plaintiff

homeowners’ claims, even though the government’s 

miscalculation of the flood level was communicated to the 

real estate developer); Williamson v. U.S. Dep’t of Agric., 

815 F.2d 368, 377–78 (5th Cir. 1987). 

D. Out-of-circuit precedents do not support the 

plaintiffs’ narrow view of the misrepresentation 

exception.

The plaintiffs respond by citing other out-of-circuit 

authority. But each case is distinguishable, and none 

addresses the issue of third-party reliance implicated here. 

As with Neustadt and Block, each case focuses on the 

distinction between negligence claims in which the 

misstatements are collateral to the suit’s gravamen and those 

truly premised on the government’s misrepresentations. 

First, the plaintiffs rely on Jimenez-Nieves v. United

States, 682 F.2d 1 (1st Cir. 1982), in which the Social 

Security Administration (SSA) ceased paying benefit checks 

because of a government clerk’s typographical error. Id. at 

2. The First Circuit held that the FTCA’s misrepresentation 

exception did not apply because the alleged false 

statement—the typo—“did not directly injure the plaintiff; it 

misrepresentation to JBP regarding its continued negotiation in the 

condemnation proceedings.” Id. (emphasis added). The court stressed 

that without the government’s misrepresentation to the third-party 

purchaser, the condemnation and the demolition would not have 

occurred. See id. at 1265.
ABBEY V. USA 21

was simply the internal bureaucratic cause of other agency 

action—dishonoring the checks.” Id. at 4. In making this 

point, the First Circuit cited Neustadt’s reference to “the 

‘traditional and commonly understood definition of the 

tort’” when the FTCA was enacted. Id. at 3–4 (quoting 

Neustadt, 366 U.S. at 706). The court then observed that 

“one essential element of misrepresentation remains reliance 

by the plaintiff himself upon the false information that has 

been provided.” Id. at 4 (citations omitted). Because the 

false statement “was not made to the plaintiff and he did not 

rely upon it,” the misrepresentation exception did not bar the 

plaintiff’s claims. Id. at 5. 

Although Jimenez-Nieves does include some language 

that facially supports the plaintiffs, the case again turns on

the distinction between claims premised on the 

government’s communication of false information (which 

fall within the misrepresentation exception) and those 

premised on the government’s breach of some alternate duty 

(which do not fall within the misrepresentation exception). 

The “false statement” at issue in Jimenez-Nieves was a

clerical error by the SSA in intra-agency communications. 

Id. at 2. So, by definition, the government’s 

misrepresentations could not have been relied on by the 

plaintiff—or by anyone else outside the agency, for that 

matter. The First Circuit referred to Neustadt only to 

underscore that the “false statement” (the typo) did not harm 

the plaintiff and that other governmental action caused the 

injury. 

The plaintiffs next cite Saraw Partnership v. United

States, 67 F.3d 567 (5th Cir. 1995), in which the Fifth Circuit 

held that a negligence claim was not barred where the 

Veterans Administration (VA) incorrectly entered a 

plaintiff’s loan payments, resulting in foreclosure of his 
22 ABBEY V. USA

property. Id. at 571. There, the government contended that 

the plaintiff’s alleged injury was caused by the VA’s failure 

to tell the plaintiff that it had not received his loan payments. 

Id. at 570. The Saraw Partnership court first relied on Ninth 

Circuit case law distinguishing between “misrepresentation” 

and the negligent “performance of operational tasks.” Id. at

570–71 (citing Mundy v. United States, 983 F.2d 950, 952 

(9th Cir. 1993)). The Fifth Circuit reasoned that the “case is 

not about reliance on faulty information or on the lack of 

proper information; rather, the gist of this case is the 

government’s careless handling of Saraw’s loan payments.” 

Id. at 571. The claim centered on the government’s 

operational negligence, and any lack of communication was 

“collateral” to the mishandling of loan payments. Id. 

The Saraw Partnership court then concluded that the 

misrepresentation exception was further inapplicable 

because Saraw did not detrimentally rely on any lack of 

communication by the government. Id. The appellants rely 

on this snippet, but the Fifth Circuit did not address the issue 

of third-party reliance. See generally id. And, in any event, 

the case is distinguishable along the same lines as JimenezNieves: the crux of the dispute similarly revolved around the 

intra-agency clerical error, not any misrepresentation. See 

Est. of Trentadue ex rel. Aguilar v. United States, 397 F.3d 

840, 854–55 (10th Cir. 2005) (describing Saraw Partnership 

as a case refusing to apply the misrepresentation exception 

to a claim for which a misrepresentation was only

“collaterally involved”). 

Finally, the plaintiffs cite Estate of Trentadue, where the 

Tenth Circuit observed that both “reliance by the plaintiff 

. . . upon the false information that has been provided,’ and 

‘pecuniary loss’” are the twin essential elements of 

misrepresentation. 397 F.3d at 854 (quoting Jimenez–
ABBEY V. USA 23

Nieves, 682 F.2d at 5); see also id. at 855. There, family 

members of a deceased prisoner brought a claim for 

intentional infliction of emotional distress for, among other 

things, the government’s failure to inform the family 

members of the battered condition of the prisoner’s body 

before sending them the remains. Id. The government 

invoked the FTCA’s misrepresentation exception, 

contending that the family alleged “no conduct independent 

of a failure to communicate” information about the remains. 

Id. at 854. 

The Tenth Circuit disagreed, concluding that “even 

acknowledging that the government failed to inform the 

Trentadues of certain facts,” their “emotional distress arises 

from the government’s callous treatment of the family in the 

aftermath of Trentadue’s death, including its shipping of 

Trentadue’s battered remains to unsuspecting family 

members.” Id. at 855. Estate of Trentadue is distinguishable

for two reasons. First, the misrepresentation was made 

directly to the Trentadues, so the court had no occasion to 

consider the issue of third-party reliance. See id. And

second, the central issue was whether the government’s false 

statements and nondisclosure were “more than collaterally 

involved and constitute the very conduct giving rise to 

plaintiffs’ emotional distress claim.” Id. Here, in contrast, 

the Navy’s alleged misrepresentations to the City are the 

precise conduct giving rise to the claims. There can be no 

argument that the misrepresentations are merely 

“collaterally involved” in the plaintiffs’ claims. 

* * * *

To recap: Our interpretation of the misrepresentation

exception—focusing on the “gist,” “gravamen,” or 

“essence” of plaintiffs’ claims—reflects the reasoning of 
24 ABBEY V. USA

Neustadt, Block, and longstanding Ninth Circuit precedent. 

See, e.g., Esquivel, 21 F.4th at 578; cf. Mt. Homes, Inc., 912 

F.2d at 355. The Navy’s alleged misrepresentations are 

“essential” to the plaintiffs’ negligence claims. Block, 460 

U.S. at 297. We thus hold that the claims “arise out of” 

misrepresentation and fall within the FTCA waiver 

exception. Cf. Esquivel, 21 F.4th at 578; Shearer, 473 U.S. 

at 55. 

III. CERCLA § 120(h)(1) does not “limit or suspend”

the FTCA’s misrepresentation exception.

The plaintiffs also contend that even if the FTCA’s 

misrepresentation exception applies, section 120(h) of 

CERCLA imposes a “specific and mandatory duty of 

accurate disclosure on the Navy,” thus implicitly “limit[ing] 

or suspend[ing]” the misrepresentation exception in this 

case. See 42 U.S.C. §§ 9620(h)(1), 9620(h)(3)(A)(ii). 

This is a question of first impression in this circuit, and

it appears that no other court has addressed the issue. 

Section 120(h) is silent as to its effect not only on the 

FTCA’s misrepresentation exception but also on potential 

tort liability under CERCLA more generally. Using

ordinary principles of statutory construction, we conclude 

that Congress did not silently waive sovereign immunity for

certain misrepresentation claims under CERCLA section 

120(h). 

Section 120(h)(1)’s disclosure provision states that 

whenever any department, agency, or 

instrumentality of the United States enters 

into any contract for the sale or other transfer 

of real property which is owned by the United 

States and on which any hazardous substance 
ABBEY V. USA 25

was stored for one year or more, known to 

have been released, or disposed of, the head 

of such department, agency, or 

instrumentality shall include in such contract 

notice of the type and quantity of such 

hazardous substance and notice of the time at 

which such storage, release, or disposal took 

place, to the extent such information is 

available on the basis of a 

complete search of agency files. 

42 U.S.C. § 9620(h)(1) (emphasis added). Section 

120(h)(3)(A), in turn, requires that “each deed entered into 

for the transfer of such property by the United States to any 

other person or entity shall contain . . . 

(ii) a covenant warranting that— 

(I) all remedial action necessary to

protect human health and the 

environment with respect to any such

substance remaining on the property has

been taken before the date of such

transfer, and

(II) any additional remedial action found 

to be necessary after the date of such

transfer shall be conducted by the United

States . . . . 

Id. § 9620(h)(3)(A)(ii) (emphasis added). 

The plaintiffs insist that section 120(h)’s disclosure 

requirement shows that Congress intended it as a guarantee

to buyers and lessees about the safety of the federal property. 

And so, their argument goes, by adopting CERCLA section 
26 ABBEY V. USA

120(h), Congress intended to limit or suspend the FTCA’s 

misrepresentation exception. This argument fails. 

A. Congress did not silently limit or suspend 

application of the misrepresentation exception 

through CERCLA § 120(h). 

As a matter of statutory interpretation, we presume that 

Congress was aware of the FTCA’s misrepresentation 

exception and its judicial construction when enacting 

CERCLA section 120(h). See Progressive W. Ins. Co. v. 

Preciado, 479 F.3d 1014, 1018 (9th Cir. 2007) (“‘Faced with 

statutory silence . . . , we presume that Congress is aware of 

the legal context in which it is legislating.’” (alteration in 

original) (quoting Abrego Abrego v. Dow Chem. Co., 443 

F.3d 676, 683–84 (9th Cir. 2006) (per curiam))). CERCLA 

was enacted decades after the FTCA, an oft-litigated statute 

that should be familiar to Congress. Nothing in CERCLA 

references the FTCA or even implies that it intended to 

supersede the FTCA or its exceptions. Confronted with 

statutory silence, we presume that Congress did not displace

the FTCA’s misrepresentation exception in enacting 

CERCLA section 120(h). 

Further, we “strictly construe waivers of sovereign

immunity, which must be ‘unequivocally expressed in the 

statutory text’” in favor of the United States. Oklevueha

Native Am. Church of Haw., Inc. v. Holder, 676 F.3d 829, 

840 (9th Cir. 2012) (citation omitted). This principle of 

statutory construction is sometimes called the “presumption 

against the waiver of sovereign immunity” or the “sovereign 

immunity canon.” See Antonin Scalia & Bryan A. Garner, 

Reading Law: The Interpretation of Legal Texts 281 (2012) 

(“a federal statute does not eliminate state sovereign 

immunity—unless that disposition is unequivocally clear”); 
ABBEY V. USA 27

see also Plaskett v. Wormuth, 18 F.4th 1072, 1087 (9th Cir. 

2021) (holding that scope of waiver is also “strictly 

construed” in the government’s favor (citation omitted)). 

This longstanding rule was part of the legal backdrop at the 

time of CERCLA’s enactment—and Congress said nothing 

to suggest that it intended to curtail the misrepresentation 

exception. 

The statutory silence about the FTCA—or tort claims 

more generally—takes on added significance given that

CERCLA actually does waive sovereign immunity for 

certain claims. Section 120(a)(1) unambiguously waives 

sovereign immunity for CERCLA suits—at least to recover 

for clean-up costs. See United States v. Shell Oil Co., 294 

F.3d 1045, 1053 (9th Cir. 2002) (allowing clean-up suits 

against the United States under 42 U.S.C. § 9607). So, 

although Congress expressly waived sovereign immunity for 

clean-up lawsuits in CERCLA, it remained silent about 

suspending or limiting waiver exceptions for tort lawsuits

against the United States. This circumscribed waiver in 

CERCLA suggests that Congress did not disturb the FTCA’s 

sovereign immunity waiver framework. In short, there is 

simply no indication from the text of section 120 that 

Congress intended to suspend the FTCA’s misrepresentation 

exception sub silentio. Cf. Neustadt, 366 U.S. at 710–11

(stating that courts cannot “justifiably ignore the plain words 

Congress has used in limiting the scope of the Government’s 

tort liability”).

B. Neither Neustadt nor its out-of-circuit progeny 

supplants ordinary principles of statutory 

construction. 

In arguing that CERCLA section 120(h) displaces the 

misrepresentation exception, the plaintiffs return to Neustadt
28 ABBEY V. USA

in which the Supreme Court held that the exception was not 

limited or suspended by the government’s duty to provide 

accurate appraisals under the National Housing Act. 366 

U.S. at 708–09. They also rely on City of Garland v. Zurn 

Industries, Inc., 870 F.2d 320, 325 (5th Cir. 1989), in which 

the Fifth Circuit similarly concluded that the obligations 

imposed on the EPA under the Clean Water Act, 33 U.S.C. 

§ 1251 et seq., did not limit or suspend the FTCA’s 

misrepresentation exception. 

Notably, neither of these cases actually held that another 

federal statute has impliedly displaced the FTCA’s 

misrepresentation exception, and the plaintiffs do not 

identify any case so holding. Rather, the plaintiffs primarily 

focus on distinctions between CERCLA and the laws that

courts have found not to displace the misrepresentation 

exception, arguing that CERCLA presents a stronger case 

for displacement. The plaintiffs insist that—unlike the 

provisions of the National Housing Act or the Clean Water 

Act in Neustadt and Zurn Industries, respectively—

“CERCLA’s plain language imposes a specific and 

mandatory duty of accurate disclosure on the United States,” 

evidencing Congressional intent to override the 

misrepresentation exception. 

The plaintiffs read too much into too little. Neustadt 

mentioned two considerations in determining whether a 

statute evinces a congressional intent to “limit or suspend” 

the misrepresentation exception: (1) whether the 

government intended to warrant the accuracy of the 

information disclosed, and (2) whether the disclosure 

requirement is central to the primary purpose of the statutory 

scheme. See Neustadt, 366 U.S. at 708–11; see also Zurn 

Indus., 870 F.2d at 324–26. The plaintiffs may well be 

correct that the first guidepost favors them: the statutory 
ABBEY V. USA 29

disclosure requirements in Neustadt and Zurn Industries 

may not be as ironclad in promising accuracy as the one in 

CERCLA.2 

But that is largely beside the point here. The twopronged analysis in Neustadt did not establish an exclusive 

or dispositive test for determining whether Congress has 

suspended or limited exceptions to the sovereign immunity 

waiver; at most, it merely sets interpretive guideposts to 

consider in construing a statute. Ultimately Neustadt’s 

inquiry cannot supplant our duty to interpret statutes based 

on the text, its context, and general principles of statutory 

construction. Cf. Kisor v. Wilkie, 588 U.S. 558, 575 (2019) 

(court must “empty” its “legal toolkit” containing all the 

“traditional tools” of interpretation used to “carefully 

consider the text, structure, history, and purpose” of the 

statute or regulation (internal quotation marks and alteration 

omitted)). 

2

 The second guidepost, however, does not clearly favor either side. On 

the one hand, this circuit has observed that “CERCLA was enacted to

protect and preserve public health and the environment . . . .” Carson

Harbor Vill., Ltd. v. Unocal Corp., 270 F.3d 863, 880 (9th Cir. 2001) 

(internal quotation marks and citation omitted) (emphasis added). On 

the other hand, the same could be said of any environmental legislation, 

including the Clean Water Act, which was at issue in Zurn Industries. 

See 40 C.F.R. § 131.3(i) (Clean Water Act regulation stating that the 

purpose of “water quality standards are to protect the public health or 

welfare, enhance the quality of water and serve the purposes of the Act” 

(emphasis added)). Indeed, we might just as easily conclude that, as with 

the Clean Water Act, “the environment itself was the intended 

beneficiary of” CERCLA section 120(h)’s mandatory disclosure regime. 

Zurn Indus., 870 F.2d at 325. CERCLA’s twin overriding purposes—

common to nearly all landmark environmental legislation—do not 

indicate Congressional intent to silently create a right of redress against 

the government in tort for violating section 120(h). 
30 ABBEY V. USA

To sum things up, neither Neustadt nor its out-of-circuit 

progeny dictates displacement of our ordinary rules of 

statutory construction. As explained, we both (a) presume 

that Congress was aware of the FTCA’s misrepresentation 

exception in enacting CERCLA, see Neustadt, 366 U.S. at 

710, and (b) construe any ambiguity in the scope of a waiver 

of sovereign immunity in the government’s favor, Hunsaker 

v. United States, 902 F.3d 963, 967 (9th Cir. 2018). The 

plaintiffs have pointed to no authority showing that, by 

enacting CERCLA section 120(h), Congress intended to 

limit or suspend the FTCA’s misrepresentation exception. 

Because we “presum[e] that Congress legislates with 

knowledge of our basic rules of statutory construction,”

McNary v. Haitian Refugee Ctr., Inc., 498 U.S. 479, 496 

(1991), we decline the plaintiffs’ invitation to infer such 

intent out of thin air. 

CONCLUSION

We do not diminish the gravity of Navy’s supposed 

negligence in failing to disclose the environmental health 

hazards at the shipyard. But we are not at liberty to “ignore 

the plain words Congress has used in limiting the scope of 

the Government’s tort liability.” Neustadt, 366 U.S. at 710–

11. The claims here against the United States “aris[e] out 

of” misrepresentation and thus are barred by the plain 

language of 28 U.S.C. § 2680(h). We affirm the district 

court’s dismissal of the complaint for lack of subject matter 

jurisdiction.

AFFIRMED.