Syllabus
the TVA’s sue-and-be-sued clause contains no exception for suits based on discretionary functions. Nor does the FTCA’s discretionary function exception apply to the TVA. See 28 U. S. C. §2680(l). But this Court recognized in Federal Housing Administration v. Burr, 309 U. S. 242, that a sue-and-be-sued clause might be subject to an “implied restriction,” id., at 245. In particular, a court should recognize such a restriction if 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. The Government tries to use the framework of Burr to argue that this Court should imply an FTCA-like limit on the TVA’s sue-and-be-sued clause for all suits challenging discretionary functions because those suits would conflict with separation-of-powers principles and interfere with important governmental functions. At the outset, Congress made a considered decision not to apply the FTCA to the TVA, and the Government is effectively asking this Court to negate that legislative choice. In any event, the Government errs in arguing that waiving the TVA’s immunity from suits based on discretionary functions would offend the separation of powers. And the Government overreaches when it says that all suits based on the TVA’s discretionary conduct would interfere with governmental functions. The discretionary acts of hybrid entities like the TVA may be commercial in nature, and a suit challenging a commercial act will not interfere with governmental functions. Ibid. Pp. 4–10.
2. The courts below, which wrongly relied on the discretionary function exception, should have the first chance to address the issues this Court finds relevant in deciding whether this suit may go forward. To determine if the TVA has immunity, the court on remand must first decide whether the conduct alleged to be negligent is governmental or commercial in nature. If it is commercial, the TVA cannot invoke sovereign immunity. If it is governmental, the court might decide that an implied limitation on the clause bars the suit, but only if it finds 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. Pp. 10–11.
868 F. 3d 979, reserved and remanded.
Kagan, J., delivered the opinion for a unanimous Court.
