Document: 460 U.S. 289 103 S.Ct. 1089 75 L.Ed.2d 67 John R. BLOCK, Secretary of Agriculture, et al., Petitionersv.Onilea NEAL. No. 81-1494. Argued Jan. 19, 1983. Decided March 7, Syllabus In her complaint in the later-described action, respondent asserted following facts. She obtained a loan from Farmers Home Administration (FmHA) under Housing Act 1949 for construction prefabricated house. then contracted with builder to construct The contract required work conform plans approved by FmHA and granted right inspect test all materials workmanship reject any that were defective. During at completion house, an official inspected site reported accorded FmHA-approved drawings specifications. After moved into she discovered, officials identified, number defects. refused comply FmHA's request cure defects accordance builder's warranty, declined pay certain Respondent brought action Federal District Court Tort Claims (FTCA), alleging partly attributable employees' failure properly supervise dismissed state claim on which relief could be granted. Appeals reversed, holding stated negligence was not barred 28 U.S.C. § 2680(h), precludes recovery FTCA "[a]ny arising out . misrepresentation." Held: Respondent's did "aris[e] misrepresentation" within meaning 2680(h) thus is provision because seek recover basis misstatements made officials. United States v. Neustadt, 366 696, 81 1294, 6 614 (1961), distinguished. Although may have undertaken both respondent's house provide information regarding progress construction, based solely former conduct. essence misrepresentation communication misinformation recipient relies. Here, duty use due care ensure adhered cured before completing distinct communicating respondent. Pp. 294-299. 646 F.2d 1178 (CA6 1981), affirmed. Carter G. Phillips, Washington, D.C., petitioners. Lenny L. Croce, Oak Ridge, Tenn., Justice MARSHALL delivered opinion Court. 1 Agriculture authorized Title V 1949, 42 1471 seq., extend financial technical assistance through low-income rural residents who obtain housing. Onilea Neal, this Act, §§ 1346(b), 2671-2680. alleged discovered after set up residence employees This case presents question whether 2 * A. 3 facts described summarized as follows. Unable credit other sources, Neal applied Rural Loan pursuant 502(a) 1472(a). application June 1977. summer year, received advice S. Lain Parkison, Supervisor Roane County, Tennessee. 4 On August 8, 1977, Marketing Associates, Inc. (Home Marketing), house.1 Marketing's FmHA. It also At same time, entered deed trust signed promissory note providing repayment principal sum $21,170, plus interest 8% per annum unpaid principal. 5 commenced Neal's 1977 finished month. An official, Mary Wells, three occasions: soon began, shortly it concluded, completed. Her inspection reports contained no adverse comments work. third inspection, Wells issued final report, indicated specifications one year warranty covering workmanship, materials, equipment. winter, heat pump working properly. notified Marketing. County Supervisor, revealed unit either defective or undersized. 22, 1978, State Director conducted complete identified 13 additional These included deviations applicable Minimum Property Standards. inadequacies caulking, bridging, sealing, plumbing, extended areas such porch, rear door, floor, roof, exterior paint, interior wall finish. these warranty. 7 November 1978 asked correction heating system structural do so. B 8 Eastern Tennessee can 489 F.Supp. 512 (ED Tenn.1980). found contractual home created regulations promulgated thereunder various agreements between court concluded requiring adhere terms its intended protect Government's security interest, make warrant quality benefit those receiving loans. Id., 514-515. failed against tort law. 515. 9 reversed. 1981). agreed had obligation 1181. However, principle "that undertakes act, even though gratuitously, act carefully exercise will liable injuries proximately caused care." 1181-1182, citing Restatement (Second) Torts 323 (1965). noted that, subject express exceptions, 2674, authorizes suit Government federal agency performing voluntary undertaking. Ibid.2 10 considered now us: "arise[s] misrepresentation," therefore excluded coverage Act. Distinguishing others including fall exception waiver sovereign immunity. petitioned certiorari suggested summary reversal ground decision below cannot reconciled Court's Neustadt. We writ, --- ----, 102 2267, 73 1282 (1982), we affirm. II 11 us narrow one. argues only "misrepresentation" 2680(h). does review threshold determination states Good Samaritan doctrine otherwise actionable 2674. Thus, need decide precisely what must prove order prevail claim, nor lies.3 Nor are called consider "based upon performance perform discretionary function." 2680(a). Finally, determine administrative remedy 1479(c) (1976 ed., Supp. IV), provides exclusive damages officials.4 12 scope focus (1961). Neustadt purchased reliance appraisal (FHA) mortgage insurance purposes. he took residence, cracks appeared ceilings walls his been noticed FHA appraiser during course inspection. sued difference fair market value property purchase price. He negligently appraised property, justifiably relied paying higher price than would paid. held arose determined initially applies claims negligent, well intentional, misrepresentation. U.S., 703-706, S.Ct., 1298-1300. Neustadt's breached "duty obtaining [the plaintiff] reasonably expected rely conduct economic affairs," merely restated traditional legal definition "negligent understood Congress when enacted. 706-707, 1300-1301.5 examined National 1934, amended, appraisal, nothing indicate intended, this, limit suspend 'misrepresentation' Act." 708-710, 1301-1302. 14 agree controlled As recognized decision, misrepresentation, negligent gravamen plaintiff misled "Statement Appraisal" prepared Government. injury suffered independently erroneous appraisal. Because exception. 15 Section relieves liability pecuniary wholly misstatements. result, statutory undoubtedly preserves immunity respect broad range government actions.6 But bar actions information, but rather breach different duty. 16 case, unlike essential plaintiff's claim. doctrine, show voluntarily undertook house; carrying their supervisory activity; some care.7 previously And certainly "appea[r] beyond doubt" reports. Conley Gibson, 355 41, 45-46, 78 99, 101-102, 80 (1957). factual allegations consistent proof trial never turned over condition if pointed while still underway, rejected withheld payment until corrected 17 Of course, absence misplaced provided Common questions, used inspecting construction. partial overlap two support conclusion excepted well. Neither language history suggest aspect exception, claimant pursuing aspects " 'The exemption involves hardship enough where consent has withheld. add rigor refinement announced.' Aetna Surety Co., 338 366, 383, 70 207, 216, 94 L.Ed. 171 (1949), quoting Anderson Hayes Constr. 243 N.Y. 140, 147, 153 N.E. 28, 29-30 (1926) (Cardozo, J.). Any interpretation encourage shield itself completely adding misrepresentations whatever torts commits. 18 hold supervising Accordingly, judgment 19 Affirmed. 20 THE CHIEF JUSTICE concurs judgment. Regulations effect allowed 502 1472, new housing ways. method respondent, known "contract method" financing involved See CFR 1804.4(d) (1977). "will become party incur thereunder," id., significantly phases For example, assist borrower selecting contractor bids proposals contractor's qualifications. 1804.4(d)(6). reviewed specifications, 1804.4(a), give prior approval changes plans, 1804.4(d), contract. 1804.4(d)(8). responsible making periodic inspections. 1804.4(d)(6)(i)(j ). 1803.2; 1803.5; 1804.4(g). responsibility see payments bills material labor, 1804.4(d)(7)(iv), performed compliance conditions payment. 1804.4(d)(7)(vii). assisted 1804.4(g)(5). cited, inter alia, Indian Towing Co. States, 350 61, 76 122, 100 48 (1955) (Coast Guard's maintain beacon light lighthouse); Seaboard Coast Line Railroad 473 714 (CA5 1973) (negligent design drainage ditch); Barron 1077 (D Hawaii 1979) (failure require subcontractor contract's safety requirements). common law expressly find recognizes apply private person similar negligence. 2674; Rayonier, 352 315, 319, 77 374, 376, 354 (1957); (1955). describe significant detail Compare, e.g., Johansen 343 427, 72 849, 96 1051 (1952) (Federal Employees Compensation civilian employees), Muniz, 374 150, 160, 83 1850, 1856, 805 (1963) (provision allowing compensation prison inmates work-related inmate), Brown, 348 110, 111, 141, 142, 99 139 (1954) (receipt disability Veterans Act). argue length, however, neither subsequent amendments expand established Brief Petitioners 22-32. alternative distinguished "many familiar forms misconduct [which] said involve element 'misrepresentation,' [only] generic sense word." 711, n. 26, 1302, 26. falls commonly 'has deceit,' confined 'very largely invasion interests commercial character, business dealings.' W. Prosser, Torts, 85, 702-703 (1941 ed.). (1955), vessel ran aground maintaining lighthouse, 552(3) include undertaking competent manner, constitute word. 5, supra.

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