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, Washington,
D. C. 20543, of any typographical or other formal errors, in
order that corrections may be made before the preliminary print
goes to press.
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
Authority (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),
48Stat. 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 Government, 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 activities. 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.
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 economic development.
TVA v.
Hill,
437 U.S.
153, 157 (1978)
. In its early decades, the TVA focused
on reforesting the countryside, improving farmers’ fertilization
practices, 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 electric 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 governmental
functions with typically commercial ones. On the one hand, the TVA
possesses powers and responsibilities reserved to sovereign actors.
It may, for example, “exercise the right of eminent domain” and
“condemn all property” 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, Dominion 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, 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, 47Stat. 6;
Federal Home Loan Bank Act, §12, 47Stat. 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,” Congress 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
performance of a “discretionary function.” §2680(a). But Congress
specifically excluded from all the FTCA’s provisions—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
(Complaint). 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. 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
judgment 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 discretionary functions
even when they are part of the “TVA’s commercial, power-generating
activities.” 868 F.3d 979, 981 (2017). In deciding whether a suit
implicates those functions, 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 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 exceptions relevant to tort
claims, let alone one turning on whether the challenged conduct is
discretionary.
Nor does the FTCA’s exception for discretionary
functions 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 “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 (quotation 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 performance 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 maintains that permitting those suits would necessarily
“interfere[ ] 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 government entity excluded from the FTCA with a replica
of that statute’s discretionary function exception. Congress 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.
Indeed, the Government’s proposal would make the TVA’s tort
liability largely coextensive with that of all the agencies the
FTCA governs. See Tr. of Oral Arg. 33–34. Far from acting to
achieve such parity, Congress did everything possible to avoid
it.
In any event, the Government is wrong to think
that waiving the TVA’s immunity from suits based on discretionary
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 corporation’s
immunity for discretionary functions—its action raises no
separation of powers problems. The right governmental actor
(Congress) is making a decision within its bailiwick (to waive
immunity) that authorizes an appropriate body (a court) to render a
legal judgment. Indeed, the Government itself conceded at oral
argument that Congress, when creating a public corporation, may
constitutionally waive its “immunity [for] discretionary
functions.” 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 distinguish between the governmental
and the commercial in construing sue-and-be-sued clauses. See Brief
for Respondent 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 circumstances.” 309
U. S., at 245.
Meyer also made clear that such an
agency “could not escape the liability a private enterprise would
face in similar circumstances.” 510 U. S., at 482; see
ibid. (“[T]he liability of a private enterprise [is] a
floor below which the agency’s liability [may] 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 commercial 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 Government, is that
(barring special constitutional or statutory issues not present
here) suits based on a public corporation’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 incorporation
of the discretionary function exception. As explained above, the
“constitutional scheme” has nothing to say about lawsuits
challenging a public corporation’s discretionary activity—except to
leave their fate to Congress.
Burr, 309 U. S., at 245;
see
supra, at 8. For its part, Congress 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 immunize 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 prohibiting 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 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 Tennesseans 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 commercial—the kind of thing
any power company might do—the TVA cannot invoke sovereign
immunity. In that event, 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 assuming
governmental activity, the court must find that prohibiting 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 demand 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.