Case of the Day – Tuesday, August 29, 2017

NEITHER FISH NOR FOWL

Normally, one would think that when an electric utility was busy building new transmission lines, it was just as subject to liability for empty-headed negligence as the next guy. That would be true for your garden-variety profiteering, money-grubbing commercial enterprise. But not necessarily when your Uncle has his fingers in the pie.

Back in the dusty days of the Great Depression, some Americans began to think it was a good idea for the “public” – that is to say, the government – to own electric utilities. A lot of people thought private electric companies charged too much for power, did not employ fair operating practices, and were subject to abuse by the utility holding companies that owned them.

After all, the government is benevolent. And efficient. And responsive to citizens. Look no further than your local DMV. During his presidential campaign, Franklin Roosevelt claimed the federal government would never part with control of its power resources. At least where the Tennessee Valley Authority is concerned, he has been as good as his word.

The TVA is a utility that is neither fish nor fowl, acting in all respects like a privately-held company engaged in electricity generation and distribution. At the same time, it acts like a government agency, wielding powers reserved to the government.

Is that a good thing? Don’t ask Gary Thacker. He and fishing buddy Tony “Ski Daddy” Szozda were trollin’ and a’rollin’ in an Alabama fishing tournament on the Tennessee River one weekend, just while TVA crews were raising a submerged power line that they had accidently let drop into the river. If you ever saw the scene in “The Great Escape” where Steve McQueen commandeers a motorcycle with a rope across the road, you know where things were headed for Gary and Tony. At the they passed through the unmarked work area at full throttle, the TVA crews lifted the conductor out of the water. The boat hit the cable. Tony died.

Logically, Gary sued the TVA for negligence. After all, its crews had dropped the cable, and they had no boats patrolling the channel to warn boaters of their recovery activities, despite knowing that boats traversed the area at high speed, and that the usual Tuesday fishing tourney – with a lot of fast-moving boats – was underway.

After filing the lawsuit, Gary got smacked again. It turns out that sometimes the TVA is a private utility company. Sometimes it’s the government. Being the government has a substantial impact on liability, because no one may sue the federal government for tortious conduct (like negligence) unless the plaintiff has permission.

Permission is granted by the Federal Tort Claims Act, which grants permission to sue for many types of negligence. The FTCA, however, does not permit suit where the negligent act complained of is a “discretionary function” of government. The trial court concluded that “clotheslining” fishermen with an understaffed and poorly-thought-out power line recovery operation was a government function, and the court thus lacked jurisdiction to hear the lawsuit.

Last week, the 11th Circuit Court of Appeals agreed.

Thanks, FDR! If the utility had been First Energy, Exelon, Con Ed or any number of other private utilities, the checkbooks would have been out. But because the government was here to help, the widow Szozda and invalid Thacker take nothing.

Beyond this undeniable tragedy is an equally unhappy thought. The Court of Appeals applied an unusually attenuated syllogism here: the TVA has the power of eminent domain to condemn real estate for the installation of power lines. Because that is a government function, if when and where and how to build power lines is a discretionary function, any institutional stupidity that attends the building of power lines is likewise a discretionary function.

Not all discretionary functions are immune from a negligence suit, but the 11th Circuit’s analysis of this case suggests that the exceptions are as rare as king salmon in the Tennessee River. The court held that decisions on giving the boating public notice of potential danger are intended to be immune from a tort claim because they involve public policy decisions like allocation of resources.

Where does this string finally snap? Would driving a truck to be used in the building of a power line a discretionary function, so that a drunken TVA employee running down a busload of Brownies be shielded from liability? After all, relieving the tipsy trucker would require using another employee, an allocation-of-resources decision? More to our topic, would the clearing of trees well beyond a right-of-way – because maintaining power lines that TVA built on land it had condemned be part of the “discretionary function” chain – likewise block a suit when the tree fell on the same busload of Brownies?

There seems to be no logical way to cabin the 11th Circuit’s reasoning in this decision.

Thacker v. Tennessee Valley Authority, Case No. 16-15105 (U.S. Court of Appeals for the 11th Circuit, August 22, 2017). Gary Thacker sued TVA for negligence involving a tragic 2013 accident on the Tennessee River. While Gary and his friend Anthony Szozda were participating in a local fishing tournament, TVA was raising a downed power line that was partially submerged when a pulling cable had failed earlier that day. At the moment that TVA employees began lifting the conductor out of the water, the fishing partners’ boat passed through. The conductor struck Szozda, killing him, and Thacker. Injuring him seriously.

The district court concluded that TVA’s activities raising the cable were part of its discretionary function as a government agency, and dismissed the complaint for lack of subject-matter jurisdiction. Gary appealed.

Held: The TVA acts both as a private corporation and as a government agency. Here, it was a government agency, fulfilling a discretionary function in building power lines. Therefore, the FTCA did not permit suit, and the courts lacked subject-matter jurisdiction to hear the case.

The Court started with the obvious: the United States enjoys sovereign immunity from suit unless it unequivocally waives the immunity by statute. Courts construe the waiver set out in the FTCA strictly in favor of the government. While TVA is not entirely immune from suit, it cannot be sued when engaged in “governmental functions that are discretionary in nature.”

Previously, the courts have held TVA’s commercial, power-generating activities are discretionary functions. Here, because TVA has the power of eminent domain (a government power), it may condemn private property for transmission lines. Therefore, the 11th Circuit reasoned, TVA acts as an agency of the United States when it constructs power transmission lines on the land it condemned. Because the construction of power lines is a governmental activity, TVA cannot be sued for actions arising out of that activity if those actions fall within the discretionary-function exception.

Gary argued that TVA negligently “failed to exercise reasonable care in the assembly and installation of power lines across the Tennessee River” is encompassed within TVA’s construction of power-transmission lines. His claim that the TVA “failed to exercise reasonable care in warning boaters on the Tennessee River of the hazards the TVA created” was, the Court said, “a matter of choice for the acting employee.” An action is not a matter of choice — and therefore not discretionary — “when a federal statute, regulation, or policy specifically prescribes a course of action for an employee to follow.” Under those circumstances, an employee is required to follow the directive, meaning that the employee’s actions are not discretionary and do not fall within the discretionary-function exception.

Gary could point to no particular statute or TVA rule that failure to alert boaters transgressed. What’s more, the Court said, TVA’s failure to warn boaters was the “kind of judgment designed to be shielded by the discretionary-function exception.” The Court said TVA’s failure to provide warning to boaters “plainly involved public-policy considerations. The challenged actions and decisions in this case could require TVA to consider, among other things, its allocation of resources (such as personnel and time), public safety, cost concerns, benefits, and environmental impact.”

– Tom Root

TNLBGray140407

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