Thacker v. Tenn. Valley Auth.
2019 U.S. LEXIS 3149, 203 L. Ed. 2d 668, 139 S. Ct. 1435 (2019)
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Rule of Law:
A "sue-and-be-sued" clause for a government corporation waives sovereign immunity for torts arising from its commercial activities, making it as liable as a private enterprise. Immunity may be implied only for purely governmental functions, and only when a suit would cause grave interference with the performance of those functions.
Facts:
- Tennessee Valley Authority (TVA) employees were working to replace a power line that crossed the Tennessee River.
- During the replacement work, a cable failed, causing the power line to fall into the river.
- The TVA notified the Coast Guard, which closed a portion of the river, and the TVA also positioned two patrol boats near the downed line as a warning.
- Several hours later, as TVA workers started to raise the line from the water, Gary Thacker drove his boat at high speed into the area.
- Thacker's boat collided with the submerged power line.
- The collision resulted in serious injury to Thacker and the death of his passenger.
Procedural Posture:
- Gary Thacker filed a negligence lawsuit against the Tennessee Valley Authority (TVA) in the U.S. District Court for the Northern District of Alabama.
- The TVA moved to dismiss the suit, claiming it was protected by sovereign immunity under the discretionary function exception.
- The District Court (trial court) granted the TVA's motion to dismiss.
- Thacker, as appellant, appealed the dismissal to the U.S. Court of Appeals for the Eleventh Circuit.
- The Eleventh Circuit (intermediate appellate court) affirmed the trial court's decision, holding that the TVA was immune from the suit.
- The U.S. Supreme Court granted Thacker's petition for a writ of certiorari.
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Issue:
Does the Tennessee Valley Authority's statutory "sue-and-be-sued" clause, which waives its sovereign immunity, implicitly include the discretionary function exception found in the Federal Tort Claims Act, thereby barring tort suits arising from the TVA's performance of its commercial functions?
Opinions:
Majority - Justice Kagan
No. The Tennessee Valley Authority's broad "sue-and-be-sued" clause does not implicitly contain the discretionary function exception from the Federal Tort Claims Act (FTCA), and the TVA is subject to suit for its commercial activities just as a private corporation would be. The TVA Act's waiver of immunity is broad and contains no express exception for discretionary acts. Congress explicitly excluded the TVA from the FTCA, meaning the FTCA's discretionary function exception cannot be judicially imported to limit the TVA Act's waiver. Following the precedent in Federal Housing Administration v. Burr, such sue-and-be-sued clauses must be liberally construed, and implied exceptions are disfavored. An exception can be implied only if a suit would be inconsistent with the statutory scheme or would cause "grave interference with the performance of a governmental function." When the TVA acts in a commercial capacity, like generating and transmitting electricity, it is not performing a uniquely governmental function, and it is therefore as liable as a private company for its negligence. Immunity might only be considered for purely governmental activities, and even then, only if a lawsuit would meet the high bar of creating a grave interference with that function.
Analysis:
This decision solidifies the principle that when the government acts in a commercial capacity through a corporate entity, it sheds much of its sovereign immunity and is subject to the same legal liabilities as private businesses. The ruling prevents lower courts from importing the FTCA's discretionary function exception into the organic statutes of agencies that Congress has expressly excluded from the FTCA's coverage. By establishing a clear test distinguishing between commercial and governmental functions, the Court creates a framework that increases the accountability of government corporations engaged in business-like activities, ensuring they are not unfairly shielded from tort liability that a private competitor would face.
