U.S. Supreme Court widens tort liability exposure of New Deal-era, state-owned enterprises

On April 29, the U.S. Supreme Court held against the Government by reversing and remanding unanimously in Thacker v. Tennessee Valley Authority, No. 17-1201 (Oyez), a negligence claim arising under the Federal Tort Claims Act of 1946 (FTCA).

Per Justice Kagan, the Court held that the test for sovereign immunity in tort claims against New Deal-era "sued and be sued" entities such as the TVA is twofold.  First, the court must determine whether the conduct of the defendant was commercial or governmental.  Sovereign immunity can attach only to governmental conduct.  Second, if governmental, the court must determine whether suit is clearly inconsistent with constitutional or statutory scheme, or suit clearly would threaten interference with the governmental function (the test of FHA v Burr (U.S. 1940)).  Only in those narrow cases—much narrower than the statutory discretionary function exception to FTCA's waiver of sovereign immunity—does sovereign immunity attach.

The Court's decision hews to the plain text of the TVA Act of 1933 and represents a win for plaintiffs.  The case also throws into doubt other lines of federal case law in which the courts have borrowed and extended immunity concepts by analogy to the FTCA to shield government actors from liability in other statutory contexts.

You can hear my verbal review of the case at the Federalist Society's SCOTUScast.  Hear my pre-decision, post-argument analysis on SCOTUScast and view pre-argument analysis with engaging visuals from the Federalist Society on SCOTUSbrief.  The case is on SCOTUSblog with record links and informative analysis by Gregory Sisk.  Find the opinion and oral argument at Oyez.