[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

________________________

No. 16-16479

________________________

D.C. Docket No. 3:13-cv-00174-TJC-MCR

RENE ALVAREZ, ET AL., 

 Plaintiff - Appellants,

 versus

UNITED STATES OF AMERICA,

 Defendant - Appellee.

________________________

Appeal from the United States District Court

for the Middle District of Florida

________________________

(July 17, 2017)

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2

Before CARNES, Chief Judge, ROSENBAUM and HIGGINBOTHAM,∗ Circuit 

Judges.

HIGGINBOTHAM, Circuit Judge: 

Current and former federal law enforcement employees and their spouses 

deceived into investing in a Ponzi scheme presenting as the Federal Employee 

Benefits Group, Inc. (“FEBG”) Bond Fund seek relief under the Federal Tort 

Claims Act (“FTCA”), 28 U.S.C. § 1346(b)(1), asserting claims of negligent 

conduct and aiding and abetting the scheme. The Government moved to dismiss 

for lack of subject matter jurisdiction, relying upon the misrepresentation and 

discretionary function exceptions to the FTCA. The district court agreed that the 

misrepresentation exception applied and dismissed. We now AFFIRM.

I.

Around 1988, Kenneth Wayne McLeod began contracting with various 

federal agencies to provide retirement advice to federal employees. McLeod

founded and ran the FEBG Bond Fund. Most of the Plaintiffs met McLeod at 

retirement seminars hosted by their agency employer, where McLeod spoke 

generally about finances and retirement and also pitched his fund. McLeod would 

sometimes follow up with individual employees, promising high, secure returns in 

the FEBG Bond Fund. Several Plaintiffs “invested” their life savings.

 

* Honorable Patrick E. Higginbotham, United States Circuit Judge for the Fifth Circuit, 

sitting by designation.

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Around 2008, McLeod’s company began experiencing financial trouble. In 

2010, a duped investor complained to the United States Securities and Exchange 

Commission, and on June 17, 2010, McLeod admitted the fund was a Ponzi 

scheme. Shortly thereafter, he committed suicide.

Plaintiffs sued the United States under the FTCA. They filed their original 

complaint on February 19, 2013, alleging five counts against various federal 

agencies. The United States moved to dismiss for lack of subject matter 

jurisdiction and improper venue, alternatively for a stay. After a hearing, the 

district court denied the Government’s motion without prejudice and allowed 

discovery to proceed, finding that it needed a more developed record to resolve

the challenge to jurisdiction. Additional motions,1 another hearing, discovery, an 

unsuccessful settlement effort, and an amended complaint followed. Notably, 

Plaintiffs’ amended complaint alleged that McLeod was a government employee, 

not a contractor, a contention they stood by in defending the court’s jurisdiction. 

Plaintiffs’ amended complaint contained six counts. Count I alleged McLeod 

was negligent per se for selling unregistered securities which violated the Florida 

Securities and Investor Protection Act. Count II alleged that government 

employees aided and abetted McLeod in his sale of unregistered securities. Count 

III alleged common law negligence, including breach of an employer/employee 

 1 On May 15, 2015, the Government moved to dismiss, which the district court granted. 

The district court allowed Plaintiffs to file an amended complaint.

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duty of care, based on a number of theories. Plaintiffs additionally alleged that 

government employees negligently failed to supervise McLeod. Count IV alleged 

breach of fiduciary duty by, for example, allowing prohibited commercial 

solicitation. Count V alleged negligent supervision, and count VI alleged 

negligent infliction of emotional distress. The Government again moved to 

dismiss for lack of subject matter jurisdiction. 

On September 12, 2016, the district court found Plaintiffs’ claims barred by 

sovereign immunity, focusing its ruling upon the misrepresentation exception to 

the FTCA. Important to the arguments on appeal, the district court accepted 

Plaintiffs’ new allegation that McLeod acted as a United States employee for 

FTCA purposes. As the court recounted:

[P]laintiffs have at times altered their primary theories of liability to 

try to state a viable FTCA claim. Also, the Court granted plaintiffs an 

opportunity to conduct extensive jurisdictional discovery to try to 

support their claims. The current and final iteration of their case is 

premised on the contention that McLeod was an ‘employee’ of the 

United States when he committed his wrongs. All causes of action in 

the amended complaint assume that McLeod was an employee. While 

this is different from plaintiffs’ earlier contention that McLeod was 

not an employee [citations omitted], the Court assumes for purposes 

of testing plaintiffs’ claims that McLeod was an employee of the 

United States.

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Upon analyzing Plaintiffs’ “best case,”2 the district court found that two 

“paradigm plaintiffs [could not] demonstrate that subject matter jurisdiction [was] 

proper.” The district court found that Plaintiffs’ injuries from counts I and II—

negligence per se for McLeod’s selling unregistered securities, and governmental 

aiding and abetting—“flow[ed] from the securities and McLeod’s representations 

which underlay them being fraudulent, not because they were unregistered.” The 

court therefore found that McLeod’s failure to register was not an independent 

cause of Plaintiffs’ harm. As for the other counts, the district court found that the 

“crucial component of plaintiffs’ claims . . . is that McLeod . . . lied about the 

bona fides of the FEBG Bond Fund, and other government employees, either 

expressly or impliedly, convinced plaintiffs to trust McLeod and invest with him.”

The court concluded that Plaintiffs’ injuries were “dependent” on the 

misrepresentations and omissions of McLeod and other governmental employees, 

and were consequently barred.

Plaintiffs appeal.

 2 The court thus “put[] aside those investors who were not employed by the government, 

those who did not invest in the FEBG Bond Fund but hired McLeod to manage their investment 

portfolio, those who did not meet McLeod at a government-sponsored seminar or who did not 

attend a seminar at a GSA-controlled venue.” It also presumed a plaintiff who lived in Florida 

for venue purposes, and identified two plaintiffs who fit this criteria.

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II.

“We review a district court’s dismissal of an action for lack of subject matter 

jurisdiction de novo.”3 Unless it consents, the United States retains sovereign 

immunity from suit.4 Relevant here, the United States has waived its immunity for 

claims under the FTCA.5 “[W]hile the FTCA, as a general matter, waives what 

would otherwise be the federal government’s sovereign immunity from legal 

actions for torts committed by its employees, there are exceptions to that general 

waiver.”6 “[A] court must strictly observe the ‘limitations and conditions upon 

which the Government consents to be sued’ and cannot imply exceptions not 

present within the terms of the waiver.”7 One such exception is the intentional tort 

exception, which bars:

[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 . . .

8

“[A] claim will be deemed to have arisen from a § 2680 excepted tort if the 

governmental conduct that is essential to the plaintiff’s cause of action is 

encompassed by that tort. And this is so even if the plaintiff has denominated, as 

 3 Zelaya v. United States, 781 F.3d 1315, 1321 (11th Cir. 2015), cert. denied, 136 S. Ct. 

168 (2015) (citation omitted).

4 Id.

5 Douglas v. United States, 814 F.3d 1268, 1280 (11th Cir. 2016) (Tjoflat, J., concurring).

6 Zelaya, 781 F.3d at 1321.

7 Id. at 1322 (quoting Soriano v. United States, 352 U.S. 270, 276 (1957)). 8 28 U.S.C. § 2680(h) (emphasis added).

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the basis for the cause of action, a tort not found within § 2680(h)’s list of excepted 

torts.”9

One of the excepted torts is misrepresentation. “The Supreme Court has 

characterized ‘misrepresentation’ as being a breach of the ‘duty to use due care in 

obtaining and communicating information upon which [another] may reasonably 

be expected to rely in the conduct of his economic affairs.’”10 “Accordingly, ‘the 

essence of an action for misrepresentation, whether negligent or intentional, is the 

communication of misinformation on which the recipient relies.’”11 “The 

misrepresentation exception encompasses failure to communicate as well as 

miscommunication.”12 “The test in applying the misrepresentation exception is 

whether the essence of the claim involves the government’s failure to use due care 

in obtaining and communicating information.”13 In determining whether the 

exception applies, “it is ‘the substance of the claim and not the language used in 

stating it which controls.’”14

 9 Zelaya, 781 F.3d at 1333 (citations omitted).

10 Id. at 1334 (quoting United States v. Neustadt, 366 U.S. 696, 706 (1961)).

11 Id. (quoting Block v. Neal, 460 U.S. 289, 296 (1983)); accord Block, 460 U.S. at 296 

n.5 (“The ‘misrepresentation’ exception applies only when the action itself falls within the 

commonly understood definition of a misrepresentation claim, which has been identified with the 

common law action of deceit, and has been confined very largely to the invasion of interests of a 

financial or commercial character, in the course of business dealings.” (some internal quotation 

marks omitted)). 

12 JBP Acquisitions, LP v. U.S. ex rel. F.D.I.C., 224 F.3d 1260, 1265 n.3 (11th Cir. 2000).

13 Id. at 1264 (citations omitted).

14 Zelaya, 781 F.3d at 1334 (citation omitted).

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A.

We first turn to the district court’s dismissal of Plaintiffs’ count I claim 

against McLeod. Assuming McLeod is a government employee—as Plaintiffs did 

in their amended complaint—Plaintiffs’ claim of negligence per se for unregistered 

securities arises out of misrepresentation. As the district court correctly explained, 

“had the FEBG Bond Fund been legitimate, the fact of its being unregistered 

would have had no effect on plaintiffs. And conversely, if McLeod had registered 

the fraudulent securities (lying about them to do so since they didn’t exist), 

plaintiffs would still have suffered the same harm. Plaintiffs’ injuries flow from the 

securities and McLeod’s representations which underlay them being fraudulent, 

not because they were unregistered.” Said differently, even though Plaintiffs have

“denominated, as the basis for the cause of action, a tort not found within 

§ 2680(h)’s list of excepted torts” McLeod’s misrepresentations are nevertheless 

“the governmental conduct that is essential to the plaintiff[s’] cause of action.”15

And even if McLeod is not considered a government employee—which 

Plaintiffs at times hint at throughout their briefing—then Plaintiffs cannot recover 

against him under the FTCA, which allows recovery for only injuries “caused by 

the negligent or wrongful act or omission of any employee of the Government[.]”16

 15 Zelaya, 781 F.3d at 1333 (citations omitted).

16 28 U.S.C. § 1346(b)(1) (emphasis added).

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Accordingly, Plaintiffs’ count I claim is either barred by the misrepresentation 

exception or is not actionable under the FTCA.

B.

Plaintiffs’ other claims are similarly barred by the FTCA’s intentional tort

exception because they “aris[e] out of . . . misrepresentation,”17 and, contrary to

Plaintiffs’ contention, Sheridan v. United States18 does not save them.

1.

In Zelaya v. United States, plaintiffs were victims of Allen Stanford’s Ponzi 

scheme.19 They sued under the FTCA alleging the SEC was negligent for failing to 

notify an investor protection group about the scheme.20 This Court “examine[d] 

Plaintiffs’ notification claim to determine if [it] [wa]s based on the communication 

or miscommunication of information upon which others might be expected to rely 

in economic matters.”21 If it was, the Court explained, “and if a flawed 

communication caused the Plaintiffs’ injury, then Plaintiffs’ claim [would] be 

construed as a misrepresentation claim[.]”22 Emphasizing that the 

misrepresentation exception includes both miscommunications and non-

 17 28 U.S.C. § 2680(h).

18 487 U.S. 392 (1988).

19 Zelaya, 781 F.3d at 1318.

20 Id. at 1318–20. Plaintiffs’ claim derived from the alleged violation of a statutory duty 

in the Securities Investor Protection Act. See id. at 1333.

21 Id. at 1334.

22 Id.

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communications,23 the Court found that plaintiffs’ claim was grounded in the 

SEC’s non-communication of financial information.24 Consequently, the 

misrepresentation exception applied.25

In reaching this outcome, the Zelaya Court sifted through the applicable case 

law, separating cases in which the misrepresentation exception applied from those 

in which it did not, developing guidance for future cases in the process. For 

instance, failure-to-warn cases which do not involve injuries arising from 

“commercial decisions based on the governments’ misrepresentations” are not 

barred by the misrepresentation exception.26 Nor are cases in which the 

Government’s breach of an independent “operational” duty causes the injury.27 The 

Court explained, “if a plaintiff can show that the Government has breached a duty 

distinct from the duty not to make a misrepresentation and if that breach [] caused 

the plaintiff’s injury, the fact that the Government may have also made a 

misrepresentation will be insufficient to trigger the misrepresentation 

exception[.]”28

Plaintiffs argue that the district court read Zelaya too broadly in finding it 

applied to bar their claims. They also attempt to distinguish Zelaya by claiming 

 23 See id.

24 Id. at 1335.

25 See id. 26 Id. at 1338.

27 Id. at 1336.

28 Id. 

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that in that case, “[t]here was no allegation . . . that the persons who failed to notify 

the [Securities Investor Protection Corporation (“SIPC”)] were not SEC employees 

or were SEC employees acting outside the scope of their employment.”

The Government responds by defending Zelaya as consistent with Supreme 

Court doctrine. It argues that in this case, like in Zelaya and others, 

“misrepresentation is the essence of plaintiffs’ claims[.]”The Government suggests 

that the alleged omissions during McLeod’s seminars, which gave Plaintiffs 

“undue confidence in McLeod’s credibility,” constitute misrepresentations.

The Zelaya Court made clear that “a claim will be deemed to have arisen 

from a § 2680 excepted tort if the governmental conduct that is essential to the 

plaintiff’s cause of action is encompassed by that tort.”29 Plaintiffs alleged McLeod 

was a government employee in their amended complaint. From this premise, it is 

evident that the governmental conduct essential to Plaintiffs’ causes of action was 

McLeod’s false statements about his bond fund—in other words, McLeod’s 

misrepresentations.

In this case, it is of no consequence that Plaintiffs characterize the alleged

breached duties as other than misrepresentation because “a plaintiff cannot 

circumvent the misrepresentation exception simply through the artful pleading of 

 29 Zelaya, 781 F.3d at 1333.

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its claims.”30 Similarly, it does not matter that Plaintiffs alleged governmental 

employees other than McLeod breached such duties. On that point, Zelaya was 

clear: “if the governmental conduct that is essential to proving a plaintiff’s claim 

would be covered by the misrepresentation exception, then the Government is 

shielded from liability by sovereign immunity, no matter how the plaintiff may 

have framed his claim or articulated his theory.”31

In JBP Acquisitions, plaintiffs tried to escape the misrepresentation 

exception by arguing “that the Government was negligent in selling it [a] loan 

securing . . . Property and then continuing to act as though it had an ownership 

interest in the Property by negotiating a condemnation award with [the 

Metropolitan Atlanta Olympic Games Authority].”32 The court rejected the 

plaintiffs’ argument, finding that it was actually the Government’s failure to 

communicate certain information to the plaintiffs and misrepresentations regarding 

its ownership that constituted the basis of the negligence claims.33 Similarly, the 

basis of Plaintiffs’ claims in the present case are McLeod’s misrepresentations 

about his phony bond fund.

McLeod aside, the alleged negligent conduct of the various agency 

employees yet falls within the misrepresentation exception. This Court has

 30 JBP Acquisitions, 224 F.3d at 1264 (citations omitted).

31 Zelaya, 781 F.3d at 1334.

32 JBP Acquisitions, 224 F.3d at 1265.

33 See id.

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explained that “[t]he [misrepresentation] exception covers actions for negligence 

when the basis for the negligence action is an underlying claim for 

misrepresentation.”34 The alleged negligent conduct of the agency employees

stems from both their failure to stop McLeod’s solicitation (non-communications) 

and their endorsement of McLeod (miscommunications). Each of the allegations in 

Plaintiffs’ remaining five counts falls into one or the other.35

In count II, Plaintiffs alleged that various agency employees aided and 

abetted McLeod in violating the Florida Securities and Investor Protection Act.

But, as explained, the underlying violation is barred by the misrepresentation 

exception, and in any event the alleged aiding and abetting is comprised of 

governmental miscommunications that McLeod and his services were legitimate.36

In count III, Plaintiffs allege common law negligence in that various agency

employees breached employer-based duties and the duty to act carefully by 

negligently failing to follow a bevy of policies, provisions, and regulations.37 They 

 34 Id. at 1264 (citations omitted).

35 Plaintiffs must also demonstrate a state-law analogue for each of their claims. Zelaya, 

781 F.3d at 1324 (“[T]he fact that a federal employee has failed to perform duties imposed by 

federal law is insufficient by itself to render the federal government liable under the FTCA. 

Instead, a state tort cause of action is a sine qua non of FTCA jurisdiction, and we have 

dismissed FTCA suits that have pleaded breaches of federal duties without identifying a valid 

state tort cause of action.” (citations omitted)). However, like the district court, we need not 

decide this issue since we can affirm the dismissal for other reasons.

36 For example, according to Plaintiffs, agency employees aided and abetted by 

scheduling private meetings with McLeod. Underlying this conduct is a claim of 

misrepresentation against the Government for endorsing McLeod and his services.

37 For instance, an Office of Personnel Management (“OPM”) policy prohibits 

commercial solicitation, as does a General Services Administration (“GSA”) regulation.

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additionally make claims of negligent failure to vet, investigate, and supervise 

McLeod. Yet, the basis for each of the alleged breached duties is in fact the 

Government’s failure to communicate information about McLeod, as well as their 

miscommunications in endorsing McLeod. Moreover, several of the claims

necessarily depend on finding that the Government breached its duty to use due 

care in “communicating information upon which [Plaintiffs] may reasonably be 

expected to rely in the conduct of [their] economic affairs.’”38

The essence of misrepresentation “whether negligent or intentional, is the 

communication of misinformation on which the recipient relies.’”39 The Ninth 

Circuit has described that “[t]he key distinction in this area is between the 

performance of operational tasks and the communication of information.”40

Although some claims will implicate both,41 the “essence of the complaint” here is 

the Government’s miscommunicating McLeod’s legitimacy.

42 Said differently, the 

Government’s communication of misinformation here was far more than 

“collateral.”43

In count IV, Plaintiffs alleged breach of fiduciary duty by improperly 

soliciting, promoting, failing to follow ethics laws, and failing to properly vet 

 38 United States v. Neustadt, 366 U.S. 696, 706 (1961).

39 Zelaya, 781 F.3d at 1334 (quoting Block, 460 U.S. at 296).

40 Guild v. United States, 685 F.2d 324, 325 (9th Cir. 1982).

41 See, e.g., Block, 460 U.S. at 297–98.

42 Guild, 685 F.2d at 326.

43 Id.

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McLeod and the FEBG. Soliciting and promoting are plainly acts of 

communication that fall within the misrepresentation exception. And although

violating ethics rules and failing to vet offer an accurate description of the 

Government’s conduct, it is not complete.44 The Supreme Court instructed that we 

look to the “essence” of the claim to reach its footing.45 Here, the essence “is the 

communication of misinformation on which [Plaintiffs] relie[d].”46 The same is 

true for Plaintiffs’ count V allegations of negligent supervision. Alleging the 

breached duty to be a failure to “supervise, direct and control,” Plaintiffs strive but 

fail to circumvent the misrepresentation bar.47 Finally, in count VI, Plaintiffs 

alleged negligent infliction of emotional distress (“NIED”), which “requires an 

adequately pled underlying claim of negligence.”48 Because any underlying 

negligence claims are covered by the misrepresentation exception, Plaintiffs’ 

NIED claim is also barred. In short, like in Zelaya, “because Plaintiffs’ claim[s] 

[are] focused on non-communication [and miscommunication] of financial 

information” by the various agency employees, “the misrepresentation exception 

 44 Guild, 685 F.2d at 326 (key issue was “the correct characterization of the 

Government's conduct”).

45 See Block, 460 U.S. at 296–97.

46 Id. at 296.

47 See Metz v. United States, 788 F.2d 1528, 1534 (11th Cir. 1986) (“[A] cause of action 

which is distinct from one of those excepted under § 2680(h) will nevertheless be deemed to 

‘arise out of’ an excepted cause of action when the underlying governmental conduct which 

constitutes an excepted cause of action is ‘essential’ to plaintiff's claim.” (citation omitted)). 48 Chaparro v. Carnival Corp., 693 F.3d 1333, 1337 (11th Cir. 2012) (per curiam).

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springs into action to prevent a waiver of the Government’s sovereign 

immunity.”49

Then there is the requirement of causation. To escape the misrepresentation 

exception in cases like this, Zelaya requires Plaintiffs not only to “show that the 

Government has breached a duty distinct from the duty not to make a 

misrepresentation” but also, critically, that “that breach . . . caused the plaintiff’s 

injury.”50 In coming to that conclusion, the Zelaya decision relied on the Supreme 

Court’s Block v. Neal decision, which said that the misrepresentation exception 

“relieves the Government of tort liability for pecuniary injuries which are wholly 

attributable to reliance on the Government’s negligent misstatements. . . . But it 

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.”51

Plaintiffs cannot make the required showings in this case. Their injuries are 

“wholly attributable to reliance on” misrepresentations.52 In Zelaya, “[t]he injury 

Plaintiffs suffered . . . was the loss of their investment money, which is an 

economic injury arising from a commercial decision that Plaintiffs may not have 

 49 Zelaya, 781 F.3d at 1335.

50 Id. at 1336.

51 Block, 460 U.S. at 297; see Zelaya, 781 F.3d at 1335–36.

52 Block, 460 U.S. at 297.

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made had the SEC notified SIPC of Stanford Group’s financial frailty.”53 The 

injury Plaintiffs suffered in this case was also the loss of their investment money, 

“which is an economic injury arising from a commercial decision that Plaintiffs 

may not have made had” McLeod not peddled his fraudulent fund, and had agency 

employees not communicated McLeod’s legitimacy. Plaintiffs emphasize that an 

injury can have more than one cause.54 While correct as far as it goes, we must also 

determine whether the misrepresentation was central to the claim and injury.

55 In 

JBP Acquisitions, for instance, the Court determined that misrepresentations about 

the ownership of the loan are what made the Government’s conduct negligent in 

the first place, and that without the misrepresentation, there would have been no 

injury.56 The misrepresentation in JM Mechanical Corporation, on the other hand, 

was “[a] subsequent and collateral misrepresentation that merely aggravated the 

injury” which did “not suffice to invoke the misrepresentation exception.”57 Here,

McLeod and the agency employees’ misrepresentations are what made the 

 53 Zelaya, 781 F.3d at 1338.

54 For support, Plaintiffs cite to Justice Kennedy’s non-binding concurrence in the 

judgment in Sheridan. 55 See JBP Acquisitions, 224 F.3d at 1265.

56 See id. 57 Zelaya, 781 F.3d at 1336 (summarizing JM Mechanical Corp. v. United States, 716 

F.2d 190, 191–95 (3d Cir. 1983)). 

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Government’s conduct negligent and such misrepresentations were the primary

cause of injury.58

2.

Plaintiffs’ primary argument on appeal is that Sheridan v. United States 

offers their claims passage through the intentional tort gate.

59 In Sheridan, an

intoxicated off-duty servicemember injured plaintiffs by shooting a rifle into their 

car.60 Before doing so, three naval corpsmen had encountered the drunk 

serviceman inside a hospital.61 “They attempted to take him to the emergency 

room, but he broke away . . . revealing the barrel of [a] rifle. At the sight of the 

rifle barrel, the corpsmen fled. They neither took further action to subdue [him], 

nor alerted the appropriate authorities[.]”62 The plaintiffs sued the United States, 

“alleging that their injuries were caused by the Government’s negligence in 

 58 Plaintiffs point out that there are three Plaintiffs who “did not invest in the FEBG Bond 

Fund, but did hire McLeod to manage their retirement savings after attending an agencysponsored retirement seminar. These three plaintiffs allege McLeod negligently managed their 

money.” According to Plaintiffs, these three Plaintiffs did not rely on McLeod’s 

misrepresentations about the Bond Fund. Nonetheless, they relied on McLeod’s 

misrepresentations about his, and his business’s, legitimacy. For example, as Plaintiffs explain in 

their amended complaint, “[a]lthough McLeod held himself out as an expert on the federal 

retirement system, he was, in reality, not capable of handling his own finances and retirement 

planning . . . McLeod claimed he held a masters degree in finance . . when in reality, McLeod 

never graduated from college.” The misrepresentation exception applies. 59 The Government contends that Plaintiffs waived their Sheridan-based argument.

Although this contention has some force, see Gennusa v. Canova, 748 F.3d 1103, 1116 (11th 

Cir. 2014); In re Pan Am. World Airways, Inc., Maternity Leave Practices & Flight Attendant 

Weight Program Litig., 905 F.2d 1457, 1462 (11th Cir. 1990), we decline to reach it, because 

even if the argument is preserved, it fails. 60 Sheridan, 487 U.S. at 393–94.

61 See id. at 395.

62 Id. 

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allowing [the serviceman] to leave the hospital with a loaded rifle in his 

possession.”63 The Supreme Court considered “whether petitioners’ claim [was] 

one ‘arising out of’ an assault or battery within the meaning of 28 U.S.C. 

§ 2680(h).”64

In a two-part analysis, the Court held that the claim was not barred by the 

intentional tort exception. In the first part of its analysis, the Court considered a 

“claim arising out of two tortious acts, one of which is an [intentional tort] and the 

other of which is a mere act of negligence.”65 The Court acknowledged that “in at 

least some situations the fact that an injury was directly caused by an [intentional 

tort] will not preclude liability against the Government for negligently allowing the 

[intentional tort] to occur.”66

The Court recognized two theories. The first is that a claim does not arise 

“solely” or “predominantly” out of the intentional tort when there is an allegation 

of independent, antecedent negligence against the Government.

67 “Under this view, 

the assailant’s individual involvement would not give rise to Government liability, 

 63 Id. at 394.

64 Id. (footnote omitted).

65 Id. at 398; accord id. at 404 (Kennedy, J., concurring in the judgment) (“The question 

before us is how to interpret the intentional tort exception in the Federal Tort Claims Act . . . 

when a plaintiff’s injury is caused both by an intentional tort and by negligence that precedes 

it.”).

66 Id. at 398 (majority opinion) (emphasis added).

67 Id. at 399.

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but antecedent negligence by Government agents could[.]”68 But the Supreme 

Court expressly declined to rely on this theory.69

The second theory—and the one relied on by the Court—is that “the 

intentional tort exception is simply inapplicable to torts that fall outside the scope 

of § 1346(b)’s general waiver.”70 The Court cited favorably to Justice (then Judge) 

Harlan’s reasoning in Panella v. United States,

71 which concluded that the 

intentional tort exception “must be read against the rest of the Act.”72 Accordingly,

“[t]he exception should . . . be construed to apply only to claims that would 

otherwise be authorized by the basic waiver of sovereign immunity.”73 Since the 

FTCA’s basic waiver only authorizes claims for injuries caused by government 

employees acting in the scope of their employment,74 an intentional tort by a nongovernment employee, or a government employee acting outside the scope of 

employment, could not furnish the basis of an FTCA claim.75 Applied to Sheridan,

if the claim only involved the off-duty intoxicated servicemember—i.e., a 

government employee acting outside the scope of employment—plaintiffs would 

 68 Id. 69 Id. at 400.

70 Id.

71 216 F.2d 622 (2d Cir. 1954).

72 Sheridan, 487 U.S. at 400.

73 Id. 74 28 U.S.C. § 1346(b)(1) (allowing claims for money damages against the United States 

“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 . . .”).

75 See Sheridan, 487 U.S. at 400.

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have had no basis for suing the Government under the FTCA.

76 Without a viable 

FTCA claim, the FTCA’s intentional tort exception would be inapplicable.

77 

Turning to the first of these two theories, McLeod, who committed the 

intentional tort of misrepresentation, is akin to the servicemember, who committed 

the intentional tort of assault. Under the first theory, “[McLeod’s] individual 

involvement would not give rise to Government liability, but antecedent 

negligence by Government agents could[.]”78 However, this Circuit has not 

adopted this theory, and we have been given no good reason to do so today.

Plaintiffs’ negligence claims against agency defendants therefore cannot proceed 

under the first theory.

Nor can they under the second. The Sheridan Court explained that “[b]y 

voluntarily adopting [firearm] regulations . . . and by further voluntarily 

undertaking to provide care to a person who was visibly drunk and visibly armed, 

the Government assumed responsibility to ‘perform [its] “good Samaritan” task in 

 76 See id. at 401 (“If nothing more was involved here than the conduct of Carr at the time 

he shot at petitioners, there would be no basis for imposing liability on the Government. The 

tortious conduct of an off-duty serviceman, not acting within the scope of his office or 

employment, does not in itself give rise to Government liability whether that conduct is 

intentional or merely negligent.”).

77 Cf. at 400 (“Since an assault by a person who was not employed by the Government 

could not provide the basis for a claim under the FTCA, the exception could not apply to such an 

assault; rather, the exception only applies in cases arising out of assaults by federal employees.”). 

78 Id. at 399.

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22

a careful manner.’”79 The status of the intoxicated servicemember tortfeasor was 

irrelevant to this duty. The Court pointed out that the plaintiffs’ allegations 

included those against “other Government employees who allowed a foreseeable 

assault and battery to occur,” which “may furnish a basis for Government liability 

that is entirely independent of [the servicemember’s] employment status.”80 The 

Court concluded, “in a case in which the employment status of the assailant has 

nothing to do with the basis for imposing liability on the Government, it would 

seem perverse to exonerate the Government because of the happenstance that [the 

servicemember] was on a federal payroll.”81 The plaintiffs thus avoided the 

intentional tort bar because the Government’s alleged negligence had nothing to do 

with the intoxicated servicemember’s employment status. In this case, however,

the Government’s alleged negligence was closely connected to McLeod’s 

employment status. Indeed, McLeod’s presentments under the auspices of the 

Government were fundamental.

Plaintiffs urge that the agency employees who vouched for McLeod and 

failed to stop his solicitations are akin to the Navy corpsman in Sheridan who 

failed to stop the servicemember’s assault. Just as the Navy corpsman undertook an 

 79 Sheridan, 487 U.S. at 401 (footnote and citation omitted). Of note, “[t]he District Court 

and the Court of Appeals both assumed that petitioners’ version of the facts would support 

recovery under Maryland law on a negligence theory if the naval hospital had been owned and 

operated by a private person.” Id.

80 Id.

81 Id. at 402 (footnote omitted).

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23

independent duty of care to protect people from a possible assault, Plaintiffs 

suggest the agency employees here had an independent duty to protect employees 

from impermissible solicitations and commercial activity. The Government 

contends that “McLeod’s relationship with the government is at the heart of this 

case.” It asserts that “Plaintiffs’ theory of liability turns on the fact that the 

government contracted with McLeod’s employer and that his appearance at 

government-arranged seminars gave plaintiffs undue confidence in McLeod’s 

credibility.”

As an initial matter, Plaintiffs’ negligent supervision claims are “rooted in 

supervisor-supervisee relationships at work,”82 and thus closely related to 

McLeod’s employment status. All of Plaintiffs’ other claims—no matter how 

framed—are similarly connected to McLeod’s employment status as a 

governmental employee hired to help discharge the Government’s duty to provide 

retirement assistance to its employees. Plaintiffs’ insistence that the Government 

had antecedent, independent duties unrelated to McLeod’s employment 

relationship is incorrect.

Ultimately, since Plaintiffs’ claims arise out of McLeod’s misrepresentations 

about his bond fund, 28 U.S.C. § 2680(h) bars Plaintiffs’ claims. Sheridan does not 

 82 CNA v. United States 535 F.3d 132, 149 (3d Cir. 2008). According to the Third Circuit, 

the Sheridan Court recognized “that negligent supervision claims are not covered by the 

independent negligence theory[.]” Id. at 149 n.10 (citations omitted).

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24

alter the outcome because, unlike in that case, the Government’s liability was not 

independent of McLeod’s employment status.

III.

Congress has delineated the Government’s liability via the FTCA and its 

attendant exceptions. Concluding that the misrepresentation exception applies to 

bar Plaintiffs’ claims, we AFFIRM.

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25

ROSENBAUM, Circuit Judge, concurring specially:

In Oliver Twist, Mr. Bumble famously lamented, “If the law supposes that, 

the law is a ass—a idiot.”1

 Every once in a while, a case comes along where some 

might find Mr. Bumble’s philosophy of the law apt. This is one of those cases. 

Here, more than 100 federal law-enforcement-agency employees and their 

family members were swindled out of millions and millions of dollars in their 

retirement savings by Kenneth Wayne McLeod—a man these plaintiffs’ agencies 

brought onto federal property for the express purpose of, ironically, financially 

educating agency employees. Because the agencies allegedly did not follow rules 

prohibiting speakers from soliciting federal employees and from dispensing 

personal financial advice, among other safeguards, McLeod was able to abuse his 

position and take advantage of the federal employees’ trust in their agencies. Now, 

troublingly, the plaintiffs have no recourse because sovereign immunity precludes 

suit against the government in these circumstances.

I agree that the panel correctly reaches this same conclusion. But I write 

separately in an effort to prevent the harsh exception to the Federal Tort Claims 

Act’s (“FTCA”) waiver of sovereign immunity from being construed in the future 

any more broadly than it has been written and that the Supreme Court has 

interpreted it. In particular, I respectfully disagree with the panel opinion’s 

 1 Charles Dickens, Oliver Twist, https://www.planetebook.com/ebooks/Oliver-Twist.pdf, 

at 617 (last visited July 6, 2017).

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26

understanding of Sheridan v. United States, 487 U.S. 392 (1988), and with dicta 

from our decision in Zelaya v. United States, 781 F.3d 1315 (11th Cir. 2015).

I.

As I have noted, I agree that the panel correctly concluded that the FTCA’s 

waiver of sovereign immunity does not apply here. As relevant in this case, the 

FTCA’s exception from its waiver of sovereign immunity bars any claim “[a]rising 

out of . . . misrepresentation, deceit, or interference with contract rights.” 28 

U.S.C. § 2680(h). Significantly, this language includes claims arising out of not 

only intentional misrepresentation but also negligent misrepresentation. See 

United States v. Neustadt, 366 U.S. 696, 710 (1961).

When we consider whether this exception applies, we must identify the true 

“essence” of the plaintiff’s claim, regardless of how the plaintiff may have pled her 

cause. JBP Acquisitions, LP v. United States ex rel. FDIC, 224 F.3d 1260, 1264 

(11th Cir. 2000) (citation omitted). We have explained that the “essence” of 

negligent misrepresentation “involves the government’s failure to use due care in 

obtaining and communicating information.” Id. (citing Block v. Neal, 460 U.S. 

289, 296 (1983); Neustadt, 366 U.S. at 706-07). And, more specifically, a claim is 

for negligent misrepresentation “when the loss suffered by the injured party is 

caused by the breach of . . . the duty to use due care in obtaining and 

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communicating information upon which that party may reasonably be expected to 

rely in the conduct of his economic affairs.” Neustadt, 366 U.S. at 706.

Here, all of the plaintiffs’ claims are, at their essence, either claims of 

intentional misrepresentation or claims of negligent misrepresentation. To the 

extent that the complaint asserts claims against McLeod, these claims rely, at 

bottom, on the fact that McLeod defrauded them through material 

misrepresentations and omissions about what he was doing with their money. 

And to the extent that the complaint makes claims against government 

employees for their independent negligence in vetting and investigating McLeod, 

in allowing him to solicit employees and offer personal financial investment 

advice, and in otherwise failing to follow regulations and government policy in 

permitting McLeod to speak at official agency-sponsored events and on federal 

property, all of these claims sound in negligent misrepresentation. This is 

necessarily so because even setting aside McLeod’s intentional misrepresentations, 

all of plaintiffs’ losses may be traced to the government’s alleged “breach of . . . 

the duty to use due care in obtaining and communicating [financial-literacy] 

information upon which [the plaintiffs] . . . reasonably [could have been] expected 

to rely in the conduct of [their] economic affairs,” id.; that is, to the government’s 

own negligent misrepresentations. 

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Indeed, the entire purpose of the government’s financial-literacy program 

was to financially educate federal employees in the hope that they would rely on 

the information and increase their retirement savings. See 5 U.S.C. § 8350 note on 

Pub. L. 108-469, § 2, 118 Stat. 3892 (2004).2

 Had the government followed its 

own policies and regulations that were put in place to ensure the use of due care in 

communicating financial-literacy information, McLeod either would not have been 

permitted to speak or, at the very least, would not have been allowed to solicit 

employees and offer them personal financial investment advice, regardless of the 

content of that advice. Either way, the plaintiffs would not have been defrauded by 

McLeod.

So all of plaintiffs’ claims are, at their essence, claims for either intentional 

or negligent misrepresentation. As a result, § 2680(h), by its terms, precludes them 

all.

II.

 2 This note provides, in relevant part,

(c) Strategy.—As part of the retirement training offered by Office 

of Personnel Management under . . . [this section], the Office, in 

consultation with the Board, shall—

(1) Not later than 6 months after . . . [December 21, 2004], 

develop and implement a retirement financial literacy and 

education strategy for Federal employees that—

(A) shall educate Federal employees on the need for 

retirement savings and investment; and

(B) provide information related to how Federal employees 

can receive additional information on how to plan for 

retirement and calculated what their retirement investment 

should be in order to meet their retirement goals . . . .

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For this same reason, this case is also distinguishable from Sheridan. There, 

as the panel correctly notes, an obviously drunken off-duty serviceman fired 

several shots at the plaintiffs after government employees allowed him to leave a 

naval hospital with a loaded rifle in his possession. The plaintiffs sued the 

government for the employees’ negligence in allowing the serviceman to leave the 

hospital without reporting the situation. 

Section 2680(h) excepts assault and battery from the FTCA’s waiver of 

sovereign immunity, but it does not except negligence. So, like McLeod’s 

intentional misrepresentations here, the assailant’s tort in Sheridan would have 

been excluded from the FTCA’s waiver, even had the assailant been acting in the 

scope of his government employment. 

But notably, unlike misrepresentation, assault and battery has no negligent 

counterpart. And the government employees who let the drunken, armed assailant 

go without trying to stop him and without reporting the incident engaged in a 

separate act of negligence, not assault and battery or any other tort that § 2680(h) 

excepts. So unlike the acts of the government employees here who engaged in the 

excepted tort of negligent misrepresentation independent of McLeod’s intentional 

misrepresentations, the acts of the government employees in Sheridan were not 

protected by sovereign immunity under the terms of § 2860(h). See Sheridan, 487 

U.S. at 401.

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This is where I would end my discussion of this case and of Sheridan: 

unlike in Sheridan, the essence of the government employees’ acts in this case 

constituted an excepted tort under § 2680(h)—that of negligent misrepresentation. 

As a result, the FTCA bars recovery here. 

But the panel’s interpretation of Sheridan goes further. And I am concerned 

that some of what the panel says about Sheridan could be broadly construed to 

impose limitations that Sheridan did not on the FTCA’s waiver of sovereign 

immunity. For that reason, I think it important to address two points in the panel’s 

Sheridan discussion.

First, I am concerned that the panel’s interpretation of Sheridan may be read 

to mistakenly suggest that Sheridan’s rule allowing claims against government 

employees for non-excepted torts applies only when the excepted tortfeasor (in the 

position of the drunken serviceman in Sheridan or McLeod here) did not act within 

the scope of government employment. And that would be in direct conflict with 

what Sheridan actually says.

In fact, the government-employee status of the excepted tortfeasor (in the 

position of the drunken serviceman in Sheridan or McLeod here) makes no 

difference to whether Sheridan’s rule applies. The Supreme Court expressly said 

so: “[the assailant serviceman’s] employment status is irrelevant to the outcome” 

of the case. Sheridan, 487 U.S. at 403 n.8; see also id. (“Because . . . [the assailant 

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31

serviceman’s] employment status . . . has [no] bearing on the basis for petitioners’ 

claim for money damages, [§ 2680(h)] is not applicable in this case.”). Rather, in 

and of itself, the excepted tort (that directly inflicts the injuries)—regardless of 

whether a government employee acting within the scope of his duties committed 

it—does not preclude liability against the government for conduct that is “entirely 

independent” of the tortfeasor’s employment status. Id. at 401.

So even accepting the complaint’s allegations that McLeod was a 

government employee and that he acted within the scope of his employment, 

McLeod’s employment status, in and of itself, does not provide a basis under 

Sheridan for rejecting plaintiffs’ claims based on other government employees’ 

alleged breaches of a separate duty to follow government regulations and policy. 

Instead, plaintiffs’ claims cannot succeed because the independent legal foundation 

of those claims against the responsible government agencies finds its basis in 

negligent misrepresentation, which is itself an excepted tort—without reference to 

McLeod’s intentional tort of intentional misrepresentation.

Second, the panel opinion describes the two theories that the Supreme Court 

discussed in Sheridan to explain how liability might be imposed against 

government employees who negligently allowed an intentional tortfeasor to 

commit his tort. See Op. at 22-23. As the panel correctly notes, the Supreme 

Court relied exclusively on the second theory. 

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Nonetheless, the panel alternatively analyzes this case under the first 

Sheridan theory. It notes that “McLeod, who committed the intentional tort of 

misrepresentation, is akin to the servicemember, who committed the intentional 

tort of assault. Under the first theory, [McLeod’s] individual involvement would 

not give rise to Government liability, but antecedent negligence by Government 

agents could[.]” Id. at 22. (quoting Sheridan, 487 U.S. at 399). Ultimately, 

though, the panel rejects liability here because “this Circuit has not adopted this 

theory, and we have been given no good reason to do so today.” Id.

In my view, we need not reach this consideration. Even if Sheridan’s first 

theory were binding law, it simply would not apply here. As I have noted, the 

government employees here (other than McLeod) allegedly engaged in negligent 

misrepresentation, which is an excepted tort, regardless of whether Sheridan’s first 

theory is valid. For that reason alone, the government employees’ antecedent 

negligence at issue here could not give rise to government liability under the 

FTCA, and Sheridan’s first theory cannot help plaintiffs.

III.

The panel opinion also invokes our decision in Zelaya in its discussion of 

causation. See Op. at 17. And while Zelaya certainly contains some valid and 

important points, I think no discussion of Zelaya’s causation analysis is complete 

without a word of caution about that opinion. Zelaya states, “The phrase ‘arising 

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33

out of’ [in § 2680(h)] is interpreted broadly to include all injuries that are 

dependent upon one of the listed torts having been committed.” 781 F.3d at 1333 

(citing United States v. Shearer, 473 U.S. 52, 55 (1985)). But, in my view, this 

statement of the law and the citation on which Zelaya bases it, are not good law for 

two reasons.

First, Zelaya relies solely on Shearer for that proposition. But Shearer’s 

entire discussion of § 2680(h)’s exceptions to the FTCA’s waiver of sovereign 

immunity appears in Section II-A of the opinion—a part of the opinion that the 

majority did not adopt. See id. at 54-57. Instead, the Supreme Court’s decision in 

Shearer was based solely on the Feres doctrine,3 which precludes a soldier from 

recovering under the FTCA “for injuries which ‘arise out of or are in the course of 

activity incident to service.’” See Shearer, 473 U.S. at 57-59. That doctrine, of 

course, has no application here.

And more significantly, the Court’s holding in Sheridan necessarily rejected 

the Shearer plurality’s analysis of the “arising out of” language in § 2680(h). In 

Shearer, an Army private’s mother sued the Army for negligence because another 

serviceman kidnapped and murdered her son. She alleged that the Army knew that 

the other serviceman was dangerous, yet it failed to control him and to warn others 

that he was at large. In finding her claim barred, the plurality effectively 

 3 Feres v. United States, 340 U.S. 135 (1950).

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concluded that where a plaintiff’s damages “stem from” an excepted tort under § 

2680(h), an action based on a non-excepted tort “aris[es] out of” the excepted tort 

and likewise is prohibited. See id. at 55.

But Sheridan held that § 2680(h) did not preclude the plaintiffs’ claims 

there, even though all their injuries were dependent on the drunken serviceman’s 

assault and battery—an excepted tort. Had the Shearer plurality’s reasoning ruled 

the day, Sheridan could not have reached this conclusion: though the plaintiffs 

alleged an independent cause of action for negligence against the government, the 

Shearer plurality would have concluded that their actual injuries “ar[ose] out of” 

the drunken serviceman’s assault and battery and were thus barred. So it is clear 

that any suggestion that § 2680(h) bars all claims for which the injuries arose 

directly out of an excepted tort is overly broad, incorrect, and inconsistent with the 

governing law of Sheridan.

Fortunately, however, Zelaya’s suggestion in this regard is dicta, as our 

holding in Zelaya was actually based on the fact that all the plaintiffs’ claims there 

were, at their essence, claims for the excepted tort of misrepresentation. In light of 

the panel’s reliance on other aspects of Zelaya, I note this error in that opinion to 

prevent our opinion here from being viewed as endorsing all that Zelaya had to 

say.

IV.

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The outcome in this case is troubling. Yet it is one that the law clearly 

requires. Nevertheless, I would limit any restraints this opinion could impose on 

future litigants by confining it to address only what is absolutely necessary. Here, 

that means holding only that § 2680(h) precludes plaintiffs’ claims because all of 

them are based on the excepted torts of either intentional misrepresentation or 

negligent misrepresentation.

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