When determining whether the Tennessee Valley Authority is exempted from sovereign immunity and thus open to being sued, should courts use the “discretionary-function” test from the Federal Tort Claims Act, which would deem the Tennessee Valley Authority immune from suit if it or one of its officers would otherwise be subject to liability due to the performance of a discretionary function; or, should courts construe the exemption from immunity of a “sue and be sued” entity like the Tennessee Valley Authority broadly without a clearly shown exception, as held in Federal Housing Authority v. Burr?
This case asks the Supreme Court to determine the scope of a federal agency’s sovereign immunity to private lawsuits. The Tennessee Valley Authority (“TVA”), while attempting to raise a submerged power line in the river, injured Gary Thacker, who was participating in a fishing tournament. In their lawsuit against the TVA, Gary Thacker and his wife, Venida Thacker, contend that the TVA is not immune to their negligence claim because the TVA is not entitled to a discretionary-function exception—which immunizes a federal agency from private claims that arise from any of its discretionary governmental functions—and, therefore, the TVA may be sued under its statute’s sue-or-to-be-sued clause. The TVA counters that, pursuant to separation-of-powers principles, the TVA Act in fact implies a discretionary-function exception, and, even if it does not, the Suits in Admiralty Act, which indisputably has a discretionary-function exception, would apply and thus immunize the TVA from the Thackers’ suit. At stake here is the balance between a private citizen’s right to sue and the extent that sovereign immunity covers discretionary decisions of administrators and legislators.
Questions as Framed for the Court by the Parties
Whether the U.S. Court of Appeals for the 11th Circuit erred by using a “discretionary-function exception” derived from the Federal Tort Claims Act, from which the Supreme Court generally has declined to borrow rules, instead of the test set forth in Federal Housing Authority v. Burr when testing the immunity of governmental “sue and be sued” entities (like the Tennessee Valley Authority), to immunize the Tennessee Valley Authority from the plaintiffs’ claims.
Gary and Venida Thacker sued the Tennessee Valley Authority (“TVA”) because of an accident that the Thackers allege was caused by the TVA’s negligence. On July 30, 2013, Gary Thacker and his friend, Anthony Szozda, were in a boat on the Tennessee River while participating in a fishing tournament. Earlier that day, a power line spanning the river loosened and became partially submerged due to a failed pulling cable that resulted from a TVA conductor-replacement project. As the boat passed by the TVA’s repair site, the conductor, then being lifted out of the water by the TVA, struck both passengers—killing Szozda and seriously injuring Thacker. The Thackers then sued the TVA in the United States District Court for the Northern District of Alabama for the alleged negligence in failing to exercise reasonable care when installing the power lines and when warning boaters of the hazards caused by the installation, which ultimately led to both Gary’s injuries and Venida’s loss-of-consortium damages. The district court subsequently dismissed the Thackers’ suit for lack of subject matter jurisdiction.
Thereafter, the Thackers appealed to the United States Court of Appeals for the Eleventh Circuit. In considering whether the TVA was immune from private claims, the Eleventh Circuit first noted that the United States and its agencies generally cannot be sued because of sovereign immunity. However, Congress has waived this immunity in certain instances, including in some tort matters involving the TVA. But the Eleventh Circuit had previously held that this waiver did not apply to the TVA if its potential liability was caused by it being engaged in a discretionary governmental function. In this case, according to the Eleventh Circuit, the TVA was performing a governmental function because it could exercise the power of eminent domain—a power exclusive to the Government—while constructing the power lines.
The Eleventh Circuit then had to determine whether, while performing this governmental function, the TVA was engaged in a discretionary activity—choosing to use the same discretionary-function test that is applied under the Federal Tort Claims Act (“FTCA”). The first part of this test considers whether the employees’ conduct in question was a matter of choice. If there is a federal law, regulation, or policy that specifically mandates that an employee follow a prescribed course of action, then the conduct is not discretionary. The Thackers claimed that 29 C.F.R. § 1926, a general collection of health and safety regulations related to construction, mandated the TVA’s activity in question and thus satisfied the first part of the test. The Eleventh Circuit, though, would not consider this argument because the Thackers did not raise it in their original brief and only included it in their reply brief. Additionally, the court held that the Thacker’s argument would not succeed even on its merits, mainly because they could not single out a specific regulation that the TVA violated.
Next, the test’s second step required the court to consider whether the discretionary-function exception was meant to protect the judgment of the TVA employees in question. Specifically, if the action that the TVA employees took involved considerations of public policy, then the exception would apply. The Eleventh Circuit held that the TVA had to consider a variety of matters related to public policy when performing its duties here, and therefore the TVA’s actions were covered by the exception. According to the court, because the TVA’s actions satisfied both parts of the discretionary-function test, the district court was correct in dismissing the action. The Thackers appealed this ruling to the Supreme Court, challenging the Eleventh Circuit’s application of the FTCA discretionary-function test and arguing that the court should not have narrowed the applicability of the statutory exception to sovereign immunity. The Supreme Court granted the Thackers’ petition for a writ of certiorari.
WHETHER THE FTCA-DERIVED DISCRETIONARY-FUNCTION EXCEPTION IS PROPER
The Thackers argue that the Eleventh Circuit erred by using an FTCA-derived discretionary-function exception in upholding the dismissal of the case. According to the Thackers, the Eleventh Circuit held that the TVA, a federal agency, cannot be sued for its discretionary actions that are consistent with its governmental function, and the TVA’s commercial, power-generating activities fall under that exception. In response to the Eleventh Circuit’s holding, the Thackers first contend that under the statute that created the TVA, the TVA’s sue-and-be-sued clause is only subject to exceptions specifically provided in the TVA Act. But the TVA Act, the Thackers maintain, does not provide any discretionary-function exceptions. In response to the Eleventh Circuit’s “borrowing” of the discretionary-function exception from the FTCA, the Thackers assert that the FTCA does not apply to the TVA. According to the Thackers, the FTCA cannot waive the sovereign immunity of the TVA because a federal statute expressly denies the application of the FTCA to any claims against the TVA.
The TVA counters that although the TVA Act does not explicitly provide a discretionary-function exception, the exception still applies as it is a crucial and longstanding separation-of-powers principle. The TVA argues that the discretionary-function exception is crucial in preventing courts from transgressing into the distinct functions of the legislature or the executive. Otherwise, according to the TVA, every time they cause injuries to private citizens, the executive’s and the legislature’s policy judgments would be subject to judicial review. The TVA also asserts that the discretionary-function exception is a longstanding concept of immunity, and although it is most frequently applied under the FTCA, the FTCA merely clarifies what has been in existence for a long time, and the exception is implied outside the sphere of the FTCA. According to the TVA, although the Suits in Admiralty Act (“SIAA”) does not expressly provide a discretionary-function exception, the exception still applies under the recognition of all the federal courts of appeals. The TVA argues that a discretionary-function exception is likewise implicit in the TVA Act. Furthermore, the TVA posits that the TVA often undertakes activities that are “materially indistinguishable” from other activities, by other agencies, that fall under the discretionary-function exception. It would be absurd, the TVA maintains, if the same activity such as managing the water level in a reservoir is suable if it is undertaken by the TVA but not by another agency.
WHETHER THE BURR-LOEFFLER-MEYER TEST IS PROPER INSTEAD
The Thackers argue that instead of the Eleventh Circuit’s discretionary-function exception, the Supreme Court should first look to Federal Housing Administration v. Burr. There, according to the Thackers, the Supreme Court required a clear showing of, for example, the suit’s inconsistency with the federal agency’s statutory or constitutional scheme. Without that clear showing, the Thackers contend, an implied exception cannot limit the sue-or-to-be-sued clause of a federal agency. Moreover, according to the Thackers, the Supreme Court, in F.D.I.C. v. Meyer, rejected a federal agency’s “borrowing” of an exception under the FTCA.
In response, the TVA argues that the issue is not whether such “borrowing” from the FTCA is justified but whether a discretionary-function exception can be implied in the TVA Act by the separation-of-powers principles. Moreover, the TVA asserts that the governmental activity in F.D.I.C. v. Meyer does not involve, as in the present case, any emergency responses.
WHETHER THE TVA’S CORPORATE IDENTITY PREVENTS APPLICATION OF SOVEREIGN IMMUNITY
The Thackers also argue that their claims against the TVA does not deserve sovereign immunity because the TVA is functionally equivalent to a private corporate enterprise that is far from an executive agency. The Thackers note that the TVA’s board of directors—who controls the TVA—are in Tennessee rather than in Washington D.C. and the TVA is not just another Washington-based agency. In fact, the Thackers contend that Congress intended the TVA to operate as a private corporate enterprise. According to the Thackers, Congress has distinguished the TVA from other federal agencies by, for example, allowing the TVA to issue bonds that do not bind the United States and exempting the TVA from the civil service laws.
In response, the TVA counters that the discretionary-function exception still applies to corporations so long as they primarily act as instrumentalities or agencies of the United States. According to the TVA, both the FTCA and SIAA extend the discretionary-function exception to corporations. Moreover, the TVA argues that the TVA is distinguishable from other private corporate enterprises, in that the TVA performs emergency response protocols such as raising a submerged power line in a river.
THE TVA’S SOVEREIGN IMMUNITY UNDER THE SIAA
The Thackers contend that the SIAA does not apply to their claims against the TVA. , The Thackers argue that the TVA fails to satisfy the SIAA’s requirement that the government owns all of its capital stock. The Thackers point out that the TVA does not have any capital stock. Moreover, according to the Thackers, Congress passed the TVA Act 13 years after the SIAA, and Congress provided in the TVA Act that all preceding acts in conflict with the TVA would be repealed. Furthermore, the Thackers argue that even if the SIAA applies, the TVA would not be immune under the SIAA because Congress still allowed suits that are against a person as opposed to property when Congress passed the SIAA.
In response, the TVA argues that the claims by the Thackers against the TVA fall under the SIAA. The SIAA, the TVA maintains, waives sovereign immunity to suits in admiralty against a federally-owned corporation. According to the TVA, the SIAA applies only to suits arising in admiralty—suits that occur on navigable water and have a substantial relationship with maritime activity. The TVA asserts that the present suit arose in admiralty because it involved tort on navigable water that had potential to disrupt maritime commerce. To satisfy the second prong of the test, the TVA posits, only one of the proximate causes has to originate from the maritime activity of a tortfeasor. Here, the TVA argues that the TVA’s repair of infrastructure such as power lines on navigable water has a substantial relationship with maritime activity. The TVA asserts that the SIAA undeniably contains a discretionary-function exception and that regardless of whether the TVA’s sued-and-be-sued clause has a discretionary-function exception, the TVA is entitled to the discretionary-function exception under the SIAA.
THE SEPARATION OF POWERS
The TVA argues that the Government has historically had immunity protecting it from any liability resulting from the exercise of its discretionary functions based on separation of powers principles—chiefly due to the TVA being a part of the Executive Branch. According to the TVA, through the judicial “second-guessing” of discretionary decision-making, the courts would have the ability to improperly influence social, economic, and political policies under the guise of judging individual tort claims. Specifically, the TVA notes that it might have to weigh competing interests in scenarios that could ensue in a tort claim, such as in this case. That is, according to the TVA, courts cannot and should not determine how it might be best to warn boaters of an emergency while taking available resources into account.
The Thackers counter the TVA’s assertion that the judiciary is treading on the Executive Branch’s power. Instead, the Thackers claim that by broadly construing 16 U.S.C. § 831c(b)—so as to allow for the TVA to be sued—the courts are respecting the separation of powers by correctly interpreting the law as written by Congress. Specifically, the Thackers contend that Congress may choose to enact any form of sovereign immunity with the exceptions that it so chooses and that a discretionary-function exception should not be assumed. In this case, the Thackers maintain that Congress did not articulate any exception to the broad waiver of immunity it directed to the TVA, and therefore the courts should respect the authority of the legislature by allowing the TVA to be sued like any private, corporate entity. Furthermore, the Thackers argue, the TVA is not a “full-blown executive ‘agency,’” but rather bears a closer resemblance to a “corporate entity”—assuaging any concerns with respect to a violation of the separation of powers, and thus, due to its sufficient independence from the Executive, should nevertheless be open to suit.
AN AVENUE TO SUE AND OPERATIONAL EFFICIENCY
The Thackers assert that the lawsuits that individuals would like to bring against the TVA are “garden-variety” tort claims. The Thackers also acknowledge the current circuit split on the issue here between two pairs of appellate courts—which all have jurisdiction in states affected by the TVA. The Thackers reason that because of the split, it is unfair that some individuals may sue the TVA due to the Second and Fourth Circuits’ interpretation of the law, while individuals affected within the jurisdiction of the Sixth and Eleventh Circuits may not. Moreover, the Thackers contend, if the Supreme Court were to interpret the law to not allow most suits against the TVA, as the Sixth and Eleventh Circuits currently do, there would be almost no remedies available to those individuals who might be harmed by the TVA.
The TVA contends that an adverse understanding of the courts’ jurisdiction to that of its own would open up all discretionary decisions made by the TVA to individual tort claims—a situation that it views as particularly problematic considering the abundant operations under its supervision. Considering this issue in tandem with the fact that many of the TVA’s decisions will end up benefitting some parties while burdening others, the TVA is concerned that it could be under the perpetual “second-guessing” judgment of the court for its wide array of operations if those who were burdened from a particular discretionary action could always sue. The TVA thus worries that the constant threat and initiation of suit would lead to operational inefficiencies due to the time, resources, and concern spent on these lawsuits.
- Bernard Bell, Thacker v. Tennessee Valley Authority: The Relationship Between Judicial Review and Tort Liability (Part I), Yale Journal on Regulation (Oct. 6, 2018).
- Michael Phillis, Justices to Weigh Tenn. Valley Authority’s Immunity to Suits, Law360 (Sept. 27, 2018).