Grant v. Tennessee Valley Authority

• Decision Date: 31 December 1942
• Docket Number: No. 275.,275.
• Citation: 49 F. Supp. 564
• Parties: GRANT v. TENNESSEE VALLEY AUTHORITY.
• Court: U.S. District Court — Eastern District of Tennessee

49 F. Supp. 564

GRANT v. TENNESSEE VALLEY AUTHORITY.

No. 275.

District Court, E. D. Tennessee, S. D.

December 31, 1942.

Joe B. Roberts, of Chattanooga, Tenn., for plaintiff.

Wm. C. Fitts and Chas. J. McCarthy, both of Knoxville, Tenn., for defendant.

DARR, District Judge.

Under authority of Rule 56, Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, the defendant asks for summary judgment asserting that there is no issue as to any material fact. Supporting the motion, the defendant has filed affidavits. Counter affidavits are offered by the plaintiff.

The plaintiff seeks relief on three claims. The first is based on the charge that damages to crops were caused by flood waters which resulted from the negligence of the defendant's employees in the handling of the waters of the Tennessee River.

The second is for the same injuries and based on the allegations that damages had resulted from the defendant changing the natural flow of the River.

The third is based on the allegation that the flood waters were caused by the defendant undertaking to accumulate waters for the sole purpose of generating electric energy in violation of its statutory authority.¹

The defendant is a corporation, an instrumentality of the United States, created to develop and maintain by a number of dams on the Tennessee River and its tributaries a system of navigation and flood control and, so far as consistent therewith, to generate electric energy at such dams for certain usages and to sell the surplus power. Tennessee Valley Authority Act codified at 16 U.S.C.A. § 831 et seq.

A part of the charter grants of the defendant is that it: "May sue and be sued in its corporate name". No other textual provisions are made concerning permission to be sued.

The motion presents this question: To what extent did the Congress intend to permit suits against the defendant?

In a comparatively recent decision, announced since the government has extensively operated numerous functions by corporate instrumentalities, the Supreme Court, in a learned opinion by Mr. Justice Frankfurter, has carefully analyzed a proper method of construction of congressional intent to permit such corporation to be sued. Keifer & Keifer v. Reconstruction Finance Corp., 306 U.S. 381, 59 S.Ct. 516, 517, 83 L.Ed. 784.

One paragraph in this opinion is a guide in determining this question in accord with the law and public policy. This paragraph is as follows: "Therefore, the government does not become the conduit of its immunity in suits against its agents or instrumentalities merely because they do its work. United States v. Lee, 106 U.S. 196, 213, 221, 1 S.Ct. 240, 254, 261, 27 L.Ed. 171; Sloan Shipyards Corp. v. United States Shipping Board Emergency Fleet Corp., 258 U.S. 549, 567, 42 S.Ct. 386, 388, 66 L. Ed. 762. For more than a hundred years corporations have been used as agencies for doing work of the government. Congress may create them `as appropriate means of executing the powers of government, as, for instance, * * * a railroad corporation for the purpose of promoting commerce among the states.' Luxton v. North River Bridge Co., 153 U.S. 525, 529, 14 S.Ct. 891, 892, 38 L.Ed. 808. But this would not confer on such corporations legal immunity even if the conventional to-sue-and-be-sued clause were omitted. In the context of modern thought and practice regarding the use of corporate facilities, such a clause is not a ritualistic formula which alone can engender liability<sup>2</sup> like unto indispensable words of early common law, such as `warrantizo' or `to A and his heirs', for which there were no substitutes and without which desired legal consequences could not be wrought. Littleton, Tenures (Wambaugh ed.) §§ 1, 733."

From this quotation and a review of the whole opinion, I am impressed with the idea that the inclusion of "the conventional to-sue-and-to-be-sued clause" in the Tennessee Valley Authority Act is not a shibboleth to engender liability generally, but is to be taken into consideration with the congressional purposes in creating this governmental corporation.

The Tennessee Valley Authority was created for the primary purposes "of promoting navigation and controlling floods". It is these purposes that give it constitutional existence. Tennessee Valley Authority Act as codified at 16 U.S.C.A. § 831h — 1. Ashwander v. Tennessee Valley Authority, Ala., 1936, 297 U.S. 288, 56 S. Ct. 466, 80 L.Ed. 688, affirming Tennessee Valley Authority v. Ashwander, 5 Cir., 78 F.2d 578, reversing Ashwander v. Tennessee Valley Authority, D.C., 9 F.Supp. 965, and certiorari granted 1935, 296 U.S. 562, 56 S.Ct. 145, 80 L.Ed. 396, rehearing denied 1936, 297 U.S. 728, 56 S.Ct. 588, 80 L.Ed. 1011, mandate conformed to D.C., 14 F.Supp. 11; Tennessee Electric Power Co. v. Tennessee Valley Authority, Tenn. 1939, 306 U.S. 118, 59 S.Ct. 366, 83 L.Ed. 543, affirming D.C., 21 F.Supp. 947, and appeal was dismissed 1939, 305 U.S. 663, 59 S.Ct. 54, 83 L.Ed. 430, and appeal was dismissed 1939, 305 U.S. 665, 59 S.Ct. 154, 83 L.Ed. 431.

These purposes are wholly governmental functions entirely disassociated with any business in competition with private enterprises.

Because of the modern trend of governmental activities through corporate agencies in an endeavor to better economic conditions, there has resulted much commercial and competitive activities on the part of the government. Under such situations, the courts have very properly been liberal in construing various statutes as permitting suits to be brought against such corporations for wrongs both involving contracts and torts.

An example of this modern trend is the case of Keifer & Keifer v. Reconstruction Finance Corp., supra, and the case of Prato...