Case Name: PEOPLES NATIONAL BANK OF HUNTSVILLE, ALABAMA, a corporation, as trustee of the Commercial Fishermen and Fish Vendors of the Wheeler Reservoir Trust Fund, Plaintiffs/Counterclaim Defendants-Appellees, v. Dwight MEREDITH, Defendant/Counterclaim Plaintiff-Appellant, v. TVA, etc., et al., Counterclaim Defendants; James E. CLOUD, Howard Jacobs, Floyd Bivens, Dwight Meredith, Elmer Lee Roberts, George Towles, Charles E. Goad and Steven Youngblood, Plaintiffs/Counterclaim Defendants-Appellants, v. Hammond HENDERSON, et al., Plaintiffs, v. TVA, etc., et al., Defendants, Peoples National Bank of Huntsville, Alabama, its successors and assigns, Southtrust Bank, a National Association being the merging bank by name of the same business entity formerly known as Peoples National Bank of Huntsville, Alabama, as Trustee of the Commercial Fishermen and Fish Vendors of the Wheeler Reservoir Trust Fund, Defendants/Counterclaim Plaintiffs-Appellees
Court: United States Court of Appeals for the Eleventh Circuit
Jurisdiction: United States
Decision Date: 1987-03-17
Citations: 812 F.2d 682
Docket Number: No. 86-7006
Parties: PEOPLES NATIONAL BANK OF HUNTSVILLE, ALABAMA, a corporation, as trustee of the Commercial Fishermen and Fish Vendors of the Wheeler Reservoir Trust Fund, Plaintiffs/Counterclaim Defendants-Appellees, v. Dwight MEREDITH, Defendant/Counterclaim Plaintiff-Appellant, v. TVA, etc., et al., Counterclaim Defendants. James E. CLOUD, Howard Jacobs, Floyd Bivens, Dwight Meredith, Elmer Lee Roberts, George Towles, Charles E. Goad and Steven Youngblood, Plaintiffs/Counterclaim Defendants-Appellants, v. Hammond HENDERSON, et al., Plaintiffs, v. TVA, etc., et al., Defendants, Peoples National Bank of Huntsville, Alabama, its successors and assigns, Southtrust Bank, a National Association being the merging bank by name of the same business entity formerly known as Peoples National Bank of Huntsville, Alabama, as Trustee of the Commercial Fishermen and Fish Vendors of the Wheeler Reservoir Trust Fund, Defendants/Counterclaim Plaintiffs-Appellees.
Judges: Before TJOFLAT, HATCHETT and CLARK, Circuit Judges.
Reporter: Federal Reporter 2d Series
Volume: 812
Pages: 682–687

Head Matter:
PEOPLES NATIONAL BANK OF HUNTSVILLE, ALABAMA, a corporation, as trustee of the Commercial Fishermen and Fish Vendors of the Wheeler Reservoir Trust Fund, Plaintiffs/Counterclaim Defendants-Appellees, v. Dwight MEREDITH, Defendant/Counterclaim Plaintiff-Appellant, v. TVA, etc., et al., Counterclaim Defendants. James E. CLOUD, Howard Jacobs, Floyd Bivens, Dwight Meredith, Elmer Lee Roberts, George Towles, Charles E. Goad and Steven Youngblood, Plaintiffs/Counterclaim Defendants-Appellants, v. Hammond HENDERSON, et al., Plaintiffs, v. TVA, etc., et al., Defendants, Peoples National Bank of Huntsville, Alabama, its successors and assigns, Southtrust Bank, a National Association being the merging bank by name of the same business entity formerly known as Peoples National Bank of Huntsville, Alabama, as Trustee of the Commercial Fishermen and Fish Vendors of the Wheeler Reservoir Trust Fund, Defendants/Counterclaim Plaintiffs-Appellees.
No. 86-7006
Non-Argument Calendar.
United States Court of Appeals, Eleventh Circuit.
March 17, 1987.
Clement J. Cartron, Huntsville, Ala., for defendant/counterclaim plaintiff-appellant.
Herbert S. Sanger, Jr., Gen. Counsel, James E. Fox, Deputy Gen. Counsel, Charles W. Van Beke, Asst. Gen. Counsel, D. Mark Hastings, Tennessee Valley Authority, Knoxville, Tenn., for TVA.
Before TJOFLAT, HATCHETT and CLARK, Circuit Judges.

Opinion:
HATCHETT, Circuit Judge:
Background
This appeal arises out of a loan program formulated and administered by the Tennessee Valley Authority (TVA) to aid fish: ermen in Triana, Alabama, whose livelihoods were threatened when extensive DDT pollution was discovered in the Wheeler Reservoir of the Tennessee River.
TVA used funds provided for in the Energy and Water Development Appropriation Act of 1981, Pub.L. No. 96-367, 94 Stat. 1345 (1980), to develop the loan program. The House of Representatives and Senate Appropriation Committees recommended that $1,500,000 be appropriated to TVA for "Triana, Alabama, pollution.mitigation," but failed to specify how the funds were to be used.
TVA developed a loan program following a meeting with fishermen and other interested persons at Tallucah Presbyterian Church. What transpired during this meeting is contested. Some of the fishermen claim that TVA officials agreed to develop a "sham" loan program which allowed them to borrow money without having to repay it. TVA officials acknowledge that one fisherman suggested a sham loan program, but deny agreeing to such a program.
TVA deposited the funds into a trust fund at Peoples National Bank of Huntsville, Alabama (Bank), and established criteria for issuing the loans. TVA also sent a letter to forty-four fishermen notifying them of the loan program and informing them that the program was "not a grant to you from the government." Due to the parties' differing views about the Tallucah meeting, litigation ensued.
In Peoples National Bank v. Meredith, No. CV84-L-5169-NE, an Alabama state court action, the bank sought damages against Dwight Meredith after he defaulted on his loan. Meredith answered raising several defenses including estoppel, waiver, and fraud. He also filed a counterclaim against the bank and TVA alleging among other things misrepresentation. Meredith amended the counterclaim to add four TVA employees as defendants and to add counts alleging conversion, breach of fiduciary duties, and the creation of a constructive trust. The four TVA employees removed the action to federal district court.
In Cloud v. Peoples National Bank, No. CV84-L-5182-NE, nine fishermen brought an action against the bank alleging, among other things, misrepresentation, conversion, and breach of fiduciary duties.
On July 20, 1984, the district court consolidated the cases. Subsequently, the district court granted TVA, TVA officials, and the bank's motions for partial summary judgment dismissing all except the misrepresentation counts. The court held that these parties did not conceal material facts related to repayment of the loan; that no implied contract was made at the Tallucah Church meeting; that the congressional appropriation did not create a constructive trust; and that TVA's agreement with the bank did not create a trust to which the fishermen were beneficiaries.
On August 15,1984, TVA, TVA officials, and the bank filed answers in Cloud denying the allegations of the misrepresentation counts and raising affirmative defenses. The bank also filed a counterclaim against eight of the nine fishermen for payment on unpaid and overdue notes. TVA moved for summary judgment to dismiss the misrepresentation counts on the ground that its administration of the loan program was a discretionary function. TVA officials moved for summary judgment on the ground that they were immune because they were federal employees exercising discretionary functions within the outer parameters of their lines of duty. The district court granted the motions and dismissed the action as to TVA and TVA officials. Thus, only the bank's counterclaims against the fishermen remained for trial in the Cloud action. . On August 1, 1985, TVA and TVA officials moved for summary judgment on the misrepresentation counterclaims in Meredith on the same grounds. The district court also granted this motion; thus, the only claims left in that case were the bank's claim against Meredith and his counterclaim against the bank.
At a trial on November 12-18, 1985, the issues were submitted to the jury on special interrogatories. The jury found that the fishermen were not induced to execute their notes by TVA or the bank's misrepresentation and that they were liable to the bank for the sums loaned. The district court entered judgment in accordance with the jury's verdict.
Discussion
The fishermen's primary contention in this appeal is that the district court erred in granting TVA and the TVA officials' motions for summary judgment on grounds of immunity. The bank argues that the motions were correctly granted and urges that we affirm the district court's judgment. In our review, we need only discuss the issues regarding immunity to adequately dispose of this appeal.
A. TVA's Liability.
First, we note that the doctrine of sovereign immunity does not bar suit against TVA; indeed, its enabling act pro vides that it "[m]ay sue and be sued in its corporate name." 16 U.S.C. § 831(c)(b). Nevertheless, courts have held that TVA cannot be subject to liability when engaged in certain governmental functions. Queen v. Tennessee Valley Authority, 689 F.2d 80, 85 (6th Cir.1982). This "nonliability" doctrine is applied when the subject governmental function is discretionary. Morris v. Tennessee Valley Authority, 345 F.Supp. 321 (N.D.Ala.1972). See also J.H. Rutter Rex Manufacturing Company, Inc. v. United States, 515 F.2d 97 (5th Cir.1975).
The fishermen acknowledge the foregoing nonliability doctrine but contend that TVA was not acting "in one of those limited situations where it could be immune from liability." Specifically, the fishermen argue that TVA's development and administration of the loan program was not a discretionary function because Congress mandated that it spend funds appropriated in the Energy and Water Development Appropriation Act to assist them. TVA contends that its development and administration of the loan program was a discretionary function because Congress appropriated the funds without restriction and gave TVA unrestricted latitude in deciding how to parcel them out.
Deciding whether agency action is discretionary is not an easy task; however, we do not write upon an entirely clean slate. Some guidelines have been established. In J.H. Rutter Rex Manufacturing Company, Inc. v. United States, 515 F.2d 97 (5th Cir.1975), where an employer brought an action against the National Labor Relations Board under the Federal Tort Claims Act, the former Fifth Circuit discussed the discretionary function exception to the United States's waiver of its sovereign immunity under the Act:
An absolutist interpretation of the discretionary function is improper. Smith v. United States, 375 F.2d 243 (5th Cir.), cert. denied, 389 U.S. 841, 88 S.Ct. 76, 19 L.Ed.2d 106 (1967). It is not sufficient for the government to demonstrate that some choice was involved in the decision making process. That showing can be made in almost every case. Pigott v. United States, 451 F.2d 574 (5th Cir.1971). The nature of the judgment must also call for the balancing of policy considerations. Griffin v. United States, 500 F.2d 1059 (3d Cir.1974); Moyer v. Martin Marietta Corporation, 481 F.2d 585 (5th Cir.1973).
J.H. Rutter Rex Mfg. Co., Inc. at 99. In light of the above statements, TVA's arguments are persuasive. Although the House and Senate appropriations committees recommended that $1,500,000 be appropriated to TVA for "Triana, Alabama, pollution mitigation," the agency was never given any directive as to program development. In an effort to develop the best possible program, TVA officials met with the fishermen and discussed alternatives for providing aid. Subsequently, TVA developed the loan program. We agree with the district court that TVA's development and administration of the loan program was a discretionary governmental function such that the agency could not be held liable for alleged misdeed arising out of the program's development or administration.
The fishermen also contend that the district court erred in holding that the individual defendants, TVA officials, were absolutely immune from liability. The fishermen do concede, however, that the issues regarding TVA's "nonliability" and TVA officials' immunity are, in this case, inextricably bound together. We hold that the TVA officials, like the agency employing them, could not be held liable in this case because they were performing discretionary functions and acting within the outer parameters of their official duties. Barr v. Matteo, 360 U.S. 564, 79 S.Ct. 1335, 3 L.Ed.2d 1434 (1959); Johns v. Pettibone Corporation, 769 F.2d 724 (11th Cir.1985) (government employees enjoy immunity if challenged conduct involves discretionary functions within the outer parameters of their duties).
Conclusion
We have considered the fishermen's other claims regarding the creation of a constructive trust and find them unpersuasive. Thus, the judgment of the district court is affirmed.
AFFIRMED