Court Opinion

ID: 4391661
Source: CourtListenerOpinion
Date Created: 2019-04-29 15:00:36.740989+00
Date Added: 2024-06-11T07:49:51.117458
License: Public Domain

(Slip Opinion)              OCTOBER TERM, 2018                                       1

                                       Syllabus

         NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
       being done in connection with this case, at the time the opinion is issued.
       The syllabus constitutes no part of the opinion of the Court but has been
       prepared by the Reporter of Decisions for the convenience of the reader.
       See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337.

SUPREME COURT OF THE UNITED STATES

                                       Syllabus

           THACKER ET UX. v. TENNESSEE VALLEY
                      AUTHORITY

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
                THE ELEVENTH CIRCUIT

    No. 17–1201. Argued January 14, 2019—Decided April 29, 2019
The Tennessee Valley Authority (TVA), a Government-owned corpora-
  tion, provides electric power to millions of Americans. In creating the
  TVA, Congress decided that the corporation could “sue and be sued in
  its corporate name,” 16 U.S. C. §831c(b), thus waiving at least some
  of the sovereign immunity from suit that it would have enjoyed as a
  Federal Government entity. Congress subsequently waived immuni-
  ty from tort suits involving agencies across the Government in the
  Federal Tort Claims Act (FTCA), but it carved out an exception for
  claims based on a federal employee’s performance of a “discretionary
  function.” 28 U.S. C. §2680(a). Congress specifically excluded from
  the FTCA’s provisions—including the discretionary function excep-
  tion—“[a]ny claim arising from the activities of the [TVA].” §2680(l).
     In this case, TVA employees were raising a downed power line that
  was partially submerged in the Tennessee River when petitioner
  Gary Thacker drove his boat into the area at high speed. Thacker’s
  boat collided with the power line, seriously injuring him and killing
  his passenger. He sued for negligence. The TVA moved to dismiss,
  claiming sovereign immunity, and the District Court granted the mo-
  tion. Affirming, the Eleventh Circuit used the same test it applies
  when evaluating whether the Government is immune from suit
  under the discretionary function exception to the FTCA, and it held that
  Thacker’s suit was foreclosed because the challenged actions were “a
  matter of choice.”
Held:
    1. The waiver of immunity in the TVA’s sue-and-be-sued clause is
 not subject to a discretionary function exception of the kind in the
 FTCA. By the terms of the Tennessee Valley Authority Act of 1933,
2                            THACKER v. TVA

                                  Syllabus

    the TVA’s sue-and-be-sued clause contains no exception for suits
    based on discretionary functions. Nor does the FTCA’s discretionary
    function exception apply to the TVA. See 28 U.S. C. §2680(l). But
    this Court recognized in Federal Housing Administration v. Burr, 309
U.S. 242, that a sue-and-be-sued clause might be subject to an “im-
    plied restriction,” id., at 245. In particular, a court should recognize
    such a restriction if the type of suit at issue is “not consistent with
    the statutory or constitutional scheme” or the restriction is “neces-
    sary to avoid grave interference with the performance of a govern-
    mental function.” Ibid. The Government tries to use the framework
    of Burr to argue that this Court should imply an FTCA-like limit on
    the TVA’s sue-and-be-sued clause for all suits challenging discretion-
    ary functions because those suits would conflict with separation-of-
    powers principles and interfere with important governmental func-
    tions. At the outset, Congress made a considered decision not to
    apply the FTCA to the TVA, and the Government is effectively asking
    this Court to negate that legislative choice. In any event, the Gov-
    ernment errs in arguing that waiving the TVA’s immunity from suits
    based on discretionary functions would offend the separation of pow-
    ers. And the Government overreaches when it says that all suits
    based on the TVA’s discretionary conduct would interfere with gov-
    ernmental functions. The discretionary acts of hybrid entities like
    the TVA may be commercial in nature, and a suit challenging a
    commercial act will not interfere with governmental functions. Ibid.
    Pp. 4–10.
       2. The courts below, which wrongly relied on the discretionary
    function exception, should have the first chance to address the issues
    this Court finds relevant in deciding whether this suit may go for-
    ward. To determine if the TVA has immunity, the court on remand
    must first decide whether the conduct alleged to be negligent is gov-
    ernmental or commercial in nature. If it is commercial, the TVA
    cannot invoke sovereign immunity. If it is governmental, the court
    might decide that an implied limitation on the clause bars the suit,
    but only if it finds that prohibiting the “type[ ] of suit [at issue] is
    necessary to avoid grave interference” with that function’s perfor-
    mance. Burr, 309 U.S., at 245. Pp. 10–11.
868 F.3d 979, reversed and remanded.

    KAGAN, J., delivered the opinion for a unanimous Court.
                        Cite as: 587 U. S. ____ (2019)                              1

                             Opinion of the Court

     NOTICE: This opinion is subject to formal revision before publication in the
     preliminary print of the United States Reports. Readers are requested to
     notify the Reporter of Decisions, Supreme Court of the United States, Wash-
     ington, D. C. 20543, of any typographical or other formal errors, in order
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SUPREME COURT OF THE UNITED STATES
                                   _________________

                                   No. 17–1201
                                   _________________

        GARY THACKER, ET UX., PETITIONERS v.
          TENNESSEE VALLEY AUTHORITY
 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
          APPEALS FOR THE ELEVENTH CIRCUIT
                                 [April 29, 2019]

   JUSTICE KAGAN delivered the opinion of the Court.
   Federal law provides that the Tennessee Valley Author-
ity (TVA), a Government-owned corporation supplying
electric power to millions of Americans, “[m]ay sue and be
sued in its corporate name.” Tennessee Valley Authority
Act of 1933 (TVA Act), 48 Stat. 60, 16 U.S. C. §831c(b).
That provision serves to waive sovereign immunity from
suit. Today, we consider how far the waiver goes. We
reject the view, adopted below and pressed by the Gov-
ernment, that the TVA remains immune from all tort suits
arising from its performance of so-called discretionary
functions. The TVA’s sue-and-be-sued clause is broad and
contains no such limit. Under the clause—and consistent
with our precedents construing similar ones—the TVA is
subject to suits challenging any of its commercial activi-
ties. The law thus places the TVA in the same position as
a private corporation supplying electricity. But the TVA
might have immunity from suits contesting one of its
governmental activities, of a kind not typically carried out
by private parties. We remand this case for consideration
of whether that limited immunity could apply here.
2                     THACKER v. TVA

                     Opinion of the Court

                               I
   Congress created the TVA—a “wholly owned public
corporation of the United States”—in the throes of the
Great Depression to promote the Tennessee Valley’s eco-
nomic development. TVA v. Hill, 437 U.S. 153, 157
(1978). In its early decades, the TVA focused on reforest-
ing the countryside, improving farmers’ fertilization prac-
tices, and building dams on the Tennessee River. See
Brief for Respondent 3. The corporation also soon began
constructing new power plants for the region. And over
the years, as it completed other projects, the TVA devoted
more and more of its efforts to producing and selling elec-
tric power. Today, the TVA operates around 60 power
plants and provides electricity to more than nine million
people in seven States. See id., at 3–4. The rates it
charges (along with the bonds it issues) bring in over $10
billion in annual revenues, making federal appropriations
unnecessary. See ibid.; GAO, FY 2018 Financial Report of
the United States Government 53 (GAO–19–294R, 2019).
   As even that short description may suggest, the TVA is
something of a hybrid, combining traditionally govern-
mental functions with typically commercial ones. On the
one hand, the TVA possesses powers and responsibilities
reserved to sovereign actors. It may, for example, “exer-
cise the right of eminent domain” and “condemn all prop-
erty” necessary to carry out its goals.          16 U.S. C.
§§831c(h), (i). Similarly, it may appoint employees as “law
enforcement agents” with powers to investigate crimes
and make arrests. §831c–3(a); see §831c–3(b)(2). But on
the other hand, much of what the TVA does could be
done—no, is done routinely—by non-governmental parties.
Just as the TVA produces and sells electricity in its region,
privately owned power companies (e.g., Con Edison, Do-
minion Energy) do so in theirs. As to those commonplace
commercial functions, the emphasis in the oft-used label
“public corporation” rests heavily on the latter word. Hill,
                 Cite as: 587 U. S. ____ (2019)           3

                     Opinion of the Court
437 U.S., at 157.
   In establishing this mixed entity, Congress decided (as
it had for similar government businesses) that the TVA
could “sue and be sued in its corporate name.” §831c(b);
see, e.g., Reconstruction Finance Corporation Act, §4, 47
Stat. 6; Federal Home Loan Bank Act, §12, 47 Stat. 735.
Without such a clause, the TVA (as an entity of the Fed-
eral Government) would have enjoyed sovereign immunity
from suit. See Loeffler v. Frank, 486 U.S. 549, 554 (1988).
By instead providing that the TVA could “be sued,” Con-
gress waived at least some of the corporation’s immunity.
(Just how much is the question here.) Slightly more than
a decade after creating the TVA, Congress enacted the
Federal Tort Claims Act of 1946 (FTCA), 28 U.S. C.
§§1346(b), 2671 et seq., to waive immunity from tort suits
involving agencies across the Government.               See
§1346(b)(1) (waiving immunity from damages claims
based on “the negligent or wrongful act or omission of any
employee of the Government”). That statute carved out an
exception for claims based on a federal employee’s perfor-
mance of a “discretionary function.” §2680(a). But Con-
gress specifically excluded from all the FTCA’s provi-
sions—including the discretionary function exception—
“[a]ny claim arising from the activities of the [TVA].”
§2680(l).
   This case involves such a claim. See App. 22–33 (Com-
plaint). One summer day, TVA employees embarked on
work to replace a power line over the Tennessee River.
When a cable they were using failed, the power line fell
into the water. The TVA informed the Coast Guard, which
announced that it was closing part of the river; and the
TVA itself positioned two patrol boats near the downed
line. But several hours later, just as the TVA workers
began to raise the line, petitioner Gary Thacker drove his
boat into the area at high speed. The boat and line col-
lided, seriously injuring Thacker and killing a passenger.
4                     THACKER v. TVA

                     Opinion of the Court

Thacker sued for negligence, alleging that the TVA had
failed to “exercise reasonable care” in “assembl[ing] and
install[ing] power lines” and in “warning boaters” like him
“of the hazards it created.” Id., at 31.
   The TVA moved to dismiss the suit, claiming sovereign
immunity. The District Court granted the motion. It
reasoned that the TVA, no less than other government
agencies, is entitled to immunity from any suit based on
an employee’s exercise of discretionary functions. See 188
F. Supp. 3d 1243, 1245 (ND Ala. 2016). And it thought
that the TVA’s actions surrounding the boating accident
were discretionary because “they involve[d] some judg-
ment and choice.” Ibid. The Court of Appeals for the
Eleventh Circuit affirmed on the same ground. According
to the circuit court, the TVA has immunity for discretion-
ary functions even when they are part of the “TVA’s com-
mercial, power-generating activities.” 868 F.3d 979, 981
(2017). In deciding whether a suit implicates those func-
tions, the court explained that it “use[s] the same test that
applies when the government invokes the discretionary-
function exception to the [FTCA].” Id., at 982. And that
test, the court agreed, foreclosed Thacker’s suit because
the challenged actions were “a matter of choice.” Ibid.
(internal quotation marks omitted).
   We granted certiorari to decide whether the waiver of
sovereign immunity in TVA’s sue-and-be-sued clause is
subject to a discretionary function exception, of the kind in
the FTCA. 585 U. S. ___ (2018). We hold it is not.
                            II
  Nothing in the statute establishing the TVA (again, the
TVA Act for short) expressly recognizes immunity for
discretionary functions. As noted above, that law provides
simply that the TVA “[m]ay sue and be sued.” 16 U.S. C.
§831c(b); see supra, at 3. Such a sue-and-be-sued clause
serves to waive sovereign immunity otherwise belonging
                 Cite as: 587 U. S. ____ (2019)           5

                     Opinion of the Court

to an agency of the Federal Government. See Loeffler, 486
U.S., at 554. By the TVA Act’s terms, that waiver is
subject to “[e]xcept[ions] as “specifically provided in” the
statute itself. §831c. But the TVA Act contains no excep-
tions relevant to tort claims, let alone one turning on
whether the challenged conduct is discretionary.
   Nor does the FTCA’s exception for discretionary func-
tions apply to the TVA. As described earlier, see supra, at
3, the FTCA retained the Federal Government’s immunity
from tort suits challenging discretionary conduct, even
while allowing other tort claims to go forward. See 28
U.S. C. §§1346(b), 2680(a); United States v. Gaubert, 499
U.S. 315, 322–325 (1991) (describing the discretionary
function exception’s scope). But Congress made clear that
the FTCA does “not apply to[] [a]ny claim arising from the
activities of the [TVA].” §2680(l). That means the FTCA’s
discretionary function provision has no relevance to this
case. Even the Government concedes as much. It
acknowledges that the FTCA’s discretionary function
exception “does not govern [Thacker’s] suit.” Brief for
Respondent 15. Rather, it says, the TVA Act’s sue-and-be-
sued clause does so. See id., at 6. And that is the very
clause we have just described as containing no express
exception for discretionary functions.
   But that is not quite the end of the story because in
Federal Housing Administration v. Burr, 309 U.S. 242
(1940), this Court recognized that a sue-and-be-sued
clause might contain “implied exceptions.” Id., at 245.
The Court in that case permitted a suit to proceed against
a government entity (providing mortgage insurance)
whose organic statute had a sue-and-be-sued clause much
like the TVA Act’s. And the Court made clear that in
green-lighting the suit, it was doing what courts normally
should. Sue-and-be-sued clauses, the Court explained,
“should be liberally construed.” Ibid.; see FDIC v. Meyer,
510 U.S. 471, 475 (1994) (similarly calling such clauses
6                     THACKER v. TVA

                     Opinion of the Court

“broad”). Those words “in their usual and ordinary sense,”
the Court noted, “embrace all civil process incident to the
commencement or continuance of legal proceedings.”
Burr, 309 U.S., at 245–246. And Congress generally
“intend[s] the full consequences of what it sa[ys]”—even if
“inconvenient, costly, and inefficient.” Id., at 249 (quota-
tion modified). But not quite always, the Court continued.
And when not—when Congress meant to use the words
“sue and be sued” in a more “narrow sense”—a court
should recognize “an implied restriction.” Id., at 245. In
particular, Burr stated, a court should take that route if
one of the following circumstances is “clearly shown”:
either the “type[] of suit [at issue is] not consistent with
the statutory or constitutional scheme” or the restriction is
“necessary to avoid grave interference with the perfor-
mance of a governmental function.” Ibid.
   Although the courts below never considered Burr, the
Government tries to use its framework to defend their
decisions. See Brief for Respondent 17–40. According to
the Government, we should establish a limit on the TVA’s
sue-and-be-sued clause—like the one in the FTCA—for all
suits challenging discretionary functions. That is for two
reasons, tracking Burr’s statement of when to recognize an
“implied exception” to a sue-and-be-sued clause. 309 U.S.,
at 245. First, the Government argues that allowing those
suits would conflict with the “constitutional scheme”—
more precisely, with “separation-of-powers principles”—by
subjecting the TVA’s discretionary conduct to “judicial
second-guessing.” Brief for Respondent 19, 21 (internal
quotation marks omitted). Second, the Government main-
tains that permitting those suits would necessarily “inter-
fere[ ] with important governmental functions.” Id., at 36;
see id., at 39–40; Tr. of Oral Arg. 39–41. We disagree.
   At the outset, we balk at using Burr to provide a gov-
ernment entity excluded from the FTCA with a replica of
that statute’s discretionary function exception. Congress
                 Cite as: 587 U. S. ____ (2019)            7

                     Opinion of the Court

made a considered decision not to apply the FTCA to the
TVA (even as Congress applied that legislation to some
other public corporations, see 28 U.S. C. §2679(a)). See
supra, at 3, 5. The Government effectively asks us to
negate that legislative choice. Or otherwise put, it asks us
to let the FTCA in through the back door, when Congress
has locked the front one. We have once before rejected
such a maneuver. In FDIC v. Meyer, a plaintiff brought a
constitutional tort claim against a government agency
with another broad sue-and-be-sued clause. The agency
claimed immunity, stressing that the claim would have
fallen outside the FTCA’s immunity waiver (which extends
only to conventional torts). We dismissed the argument.
“In essence,” we observed, the “FDIC asks us to engraft” a
part of the FTCA “onto [the agency’s] sue-and-be-sued
clause.” 510 U.S., at 480. But that would mean doing
what Congress had not. See id., at 483. And so too here,
if we were to bestow the FTCA’s discretionary function
exception on the TVA through the conduit of Burr. In-
deed, the Government’s proposal would make the TVA’s
tort liability largely coextensive with that of all the agen-
cies the FTCA governs. See Tr. of Oral Arg. 33–34. Far
from acting to achieve such parity, Congress did every-
thing possible to avoid it.
   In any event, the Government is wrong to think that
waiving the TVA’s immunity from suits based on discre-
tionary functions would offend the separation of powers.
As this Court explained in Burr, the scope of immunity
that federal corporations enjoy is up to Congress. That
body “has full power to endow [such an entity] with the
government’s immunity from suit.” 309 U.S., at 244. And
equally, it has full power to “waive [that] immunity” and
“subject[ the entity] to the judicial process” to whatever
extent it wishes. Ibid. When Congress takes the latter
route—even when it goes so far as to waive the corpora-
tion’s immunity for discretionary functions—its action
8                     THACKER v. TVA

                      Opinion of the Court

raises no separation of powers problems. The right gov-
ernmental actor (Congress) is making a decision within its
bailiwick (to waive immunity) that authorizes an appro-
priate body (a court) to render a legal judgment. Indeed,
the Government itself conceded at oral argument that
Congress, when creating a public corporation, may consti-
tutionally waive its “immunity [for] discretionary func-
tions.” Tr. of Oral Arg. 37. But once that is acknowledged,
the Government’s argument from “separation-of-powers
principles” collapses. Brief for Respondent 19. Those
principles can offer no reason to limit a statutory waiver
that even without any emendation complies with the
constitutional scheme.
   Finally, the Government overreaches when it says that
all suits based on the TVA’s discretionary conduct will
“grave[ly] interfere[]” with “governmental function[s].”
Burr, 309 U.S., at 245. That is so, at the least, because
the discretionary acts of hybrid entities like the TVA may
be not governmental but commercial in nature. And a suit
challenging a commercial act will not “grave[ly]”—or,
indeed, at all—interfere with the “governmental functions”
Burr cared about protecting. The Government contests
that point, arguing that this Court has not meant to dis-
tinguish between the governmental and the commercial in
construing sue-and-be-sued clauses. See Brief for Re-
spondent 39–40. But both Burr and later decisions do so
explicitly. Burr took as its “premise” that an agency
“launched [with such a clause] into the commercial world”
and “authorize[d] to engage” in “business transactions
with the public” should have the same “amenab[ility] to
judicial process [as] a private enterprise under like cir-
cumstances.” 309 U.S., at 245. Meyer also made clear
that such an agency “could not escape the liability a pri-
vate enterprise would face in similar circumstances.” 510
U.S., at 482; see ibid. (“[T]he liability of a private enter-
prise [is] a floor below which the agency’s liability [may]
                  Cite as: 587 U. S. ____ (2019)             9

                      Opinion of the Court

not fall”). And twice the Court held that the liability of
the Postal Service (another sue-and-be-sued agency)
should be “similar[ ] to [that of] other self-sustaining com-
mercial ventures.” Franchise Tax Bd. of Cal. v. Postal
Service, 467 U.S. 512, 525 (1984); see Loeffler, 486 U.S.,
at 556. The point of those decisions, contra the Govern-
ment, is that (barring special constitutional or statutory
issues not present here) suits based on a public corpora-
tion’s commercial activity may proceed as they would
against a private company; only suits challenging the
entity’s governmental activity may run into an implied
limit on its sue-and-be-sued clause.
   Burr and its progeny thus require a far more refined
analysis than the Government offers here. The reasons
those decisions give to recognize a restriction on a sue-
and-be-sued clause do not justify the wholesale incorpora-
tion of the discretionary function exception. As explained
above, the “constitutional scheme” has nothing to say
about lawsuits challenging a public corporation’s discre-
tionary activity—except to leave their fate to Congress.
Burr, 309 U.S., at 245; see supra, at 8. For its part, Con-
gress has not said in enacting sue-and-be-sued clauses
that it wants to prohibit all such suits—quite the contrary.
And no concern for “governmental functions” can immun-
ize discretionary activities that are commercial in kind.
Burr, 309 U.S., at 245; see supra, at 8–9. When the TVA
or similar body operates in the marketplace as private
companies do, it is as liable as they are for choices and
judgments. The possibility of immunity arises only when
a suit challenges governmental activities—the kinds of
functions private parties typically do not perform. And
even then, an entity with a sue-and-be-sued clause may
receive immunity only if it is “clearly shown” that prohibit-
ing the “type[ ] of suit [at issue] is necessary to avoid grave
interference” with a governmental function’s performance.
Burr, 309 U.S., at 245. That is a high bar. But it is no
10                    THACKER v. TVA

                     Opinion of the Court

higher than appropriate given Congress’s enactment of so
broad an immunity waiver—which demands, as we have
held, a “liberal construction.” Ibid. (quotation modified).
                             III
   All that remains is to decide this case in accord with
what we have said so far. But as we often note at this
point, “we are a court of review, not of first view.” Cutter
v. Wilkinson, 544 U.S. 709, 718, n. 7 (2005). In wrongly
relying on the discretionary function exception, the courts
below never addressed the issues we have found relevant
in deciding whether this suit may go forward. Those
courts should have the first chance to do so, as guided by
the principles set out above and a few last remarks about
applying them here.
  As described earlier, the TVA sometimes resembles a
government actor, sometimes a commercial one. See
supra, at 2–3. Consider a few diverse examples. When
the TVA exercises the power of eminent domain, taking
landowners’ property for public purposes, no one would
confuse it for a private company. So too when the TVA
exercises its law enforcement powers to arrest individuals.
But in other operations—and over the years, a growing
number—the TVA acts like any other company producing
and supplying electric power. It is an accident of history,
not a difference in function, that explains why most Ten-
nesseans get their electricity from a public enterprise and
most Virginians get theirs from a private one. Whatever
their ownership structures, the two companies do basically
the same things to deliver power to customers.
  So to determine if the TVA has immunity here, the court
on remand must first decide whether the conduct alleged
to be negligent is governmental or commercial in nature.
For the reasons given above, if the conduct is commer-
cial—the kind of thing any power company might do—the
TVA cannot invoke sovereign immunity. In that event,
                 Cite as: 587 U. S. ____ (2019)           11

                     Opinion of the Court

the TVA’s sue-and-be-sued clause renders it liable to the
same extent as a private party. Only if the conduct at
issue is governmental might the court decide that an
implied limit on the clause bars the suit. But even assum-
ing governmental activity, the court must find that prohib-
iting the “type[] of suit [at issue] is necessary to avoid
grave interference” with that function’s performance.
Burr, 309 U.S., at 245. Unless it is, Congress’s express
statement that the TVA may “be sued” continues to de-
mand that this suit go forward.
   We accordingly reverse the judgment of the Court of
Appeals and remand the case for further proceedings
consistent with this opinion.
                                            It is so ordered.