Opinion ID: 770282
Heading Depth: 2
Heading Rank: 1

Heading: Negligent Misrepresentation Exception to FTCA

Text: 5 The United States, as sovereign, is immune from suit except as it consents to be sued, and the terms of its consent define the federal courts' jurisdiction to entertain suits against it. See United States v. Nordic Village, Inc., 503 U.S. 30, 34 (1992). The FTCA subjects the United States to liability for personal injuries caused by the negligent or wrongful act or omission of any employee of the Government. 28 U.S.C. § 1346(b)(1994). The FTCA waiver of sovereign immunity, must be strictly construed. See Levrie v. Dep't of the Army, 810 F.2d 1311, 1314 (5th Cir. 1987). 6 The United States filed a motion to dismiss Atkins's claims pursuant to Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction, arguing that there has been no waiver of sovereign immunity under the FTCA or FEGLIA. Specifically, the United States contended that this suit falls within the exception to FTCA's waiver of sovereign immunity for [a]ny claim arising out of . . . misrepresentation . . . . 28 U.S.C. § 2680(h)(1994). The district court agreed and dismissed the action. 7 The exception applies to both negligent and intentional misrepresentations, as well as to both affirmative acts and omissions of material fact. See, e.g., McNeily v. United States, 6 F.3d 343, 347 (5th Cir. 1993). Moreover, causes of action distinct from those excepted under § 2680(h) are nevertheless barred when the underlying governmental conduct 'essential' to the plaintiff's claim can be fairly read to 'arise out of' conduct that would establish an excepted cause of action. Id. Thus, the manner in which a plaintiff chooses to plead her claim is not controlling; rather, a court must look to the essential act that spawned the damages to determine whether the misrepresentation exception bars the claim. See Saraw Partnership v. United States, 67 F.3d 567, 570 (5th Cir. 1995). To determine whether the instant negligence claim arises out of misrepresentation, we consider whether the focal point of the claim is negligence in the communication of (or failure to communicate) information or negligence in the performance of an operational task, with misrepresentation being merely collateral to such performance. See id. at 570-71. The key question is whether the chain of causation from the alleged negligence to the alleged injury depends upon the transmission of misinformation by a government agent. Commercial Union Ins. Co. v. United States, 928 F.2d 176, 179 (5th Cir. 1991). 8 The district court found that the transmission of misinformation was a necessary link in the chain of causation between the alleged negligent conduct and the injury. The crux of Atkins's third-party claim was that the United States, through its employees, negligently failed to discover that Tyler had not signed his name in the designated block on the copy of the beneficiary form in Tyler's personnel file and negligently filed the unsigned form rather than a properly signed copy, with the result that Tyler's intended designation of Christina LaVena Atkins as his life insurance beneficiary was ineffective. In the district court's view, non-communication was an integral component of the claim. The district court reasoned that even if the federal employee had determined that Tyler had not signed the form, it would have been necessary to take the additional step of communicating the problem to Tyler so that he could supply his signature. The evidence in the record, taken in the light most favorable to theAtkins, does not support this view of the case. While no direct evidence establishes why an unsigned copy was retained in Tyler's personnel file, the parties' stipulated facts would support a conclusion by the fact finder that Tyler signed one or more copies of the beneficiary form and turned it over to the United States. 1 We understand Atkins's claims as alleging that the United States employee failed to preserve and properly file the correct copy - that is, the signed copy -- of Tyler's form. We conclude that because the negligent performance of an operational task allegedly caused the harm, the negligent misrepresentation exception to FTCA's waiver of sovereign immunity does not apply. See Saraw, 67 F.3d at 571. We therefore reverse the dismissal for lack of subject matter jurisdiction. 9