                                                               [PUBLISH]


             IN THE UNITED STATES COURT OF APPEALS
                                                                  FILED
                     FOR THE ELEVENTH CIRCUIT           U.S. COURT OF APPEALS
                                                          ELEVENTH CIRCUIT
                                                            AUGUST 30, 2000
                         ________________________
                                                           THOMAS K. KAHN
                                                                CLERK
                              No. 99-11551
                       ________________________
                  D. C. Docket No. 98-00149-1-CV-RWS


JBP ACQUISITIONS, LP,

                                                     Plaintiff-Appellant,

                                  versus


UNITED STATES OF AMERICA, Ex Rel:
the FEDERAL DEPOSIT INSURANCE CORPORATION,
in its corporate capacity and as successor to the
RESOLUTION TRUST CORPORATION,

                                                     Defendants-Appellees.

                         ________________________

                Appeal from the United States District Court
                   for the Northern District of Georgia
                     _________________________
                            (August 30, 2000)

Before TJOFLAT, MARCUS and KRAVITCH, Circuit Judges.

MARCUS, Circuit Judge:
       Plaintiff JBP Acquisitions, LP (“JBP”) appeals the district court’s order

dismissing its tort claims for lack of subject matter jurisdiction. The court

concluded that it did not have jurisdiction because the Plaintiff’s tort claims fell

within the “misrepresentation” exception to the Government’s waiver of sovereign

immunity in the Federal Tort Claims Act (“FTCA”). We agree and affirm the

district court’s ruling.

                                              I.

       The essential facts of this case are undisputed. JBP Acquisitions is a

Pennsylvania limited partnership that purchases real property assets and loan

portfolios secured by real estate for profit. On December 27, 1995, JBP purchased

five nonperforming loans for $355,000.00 from the Resolution Trust Corporation

(“RTC”) at an RTC auction of assets taken over from failed financial institutions.1

Among the loans purchased was one secured by low-income multi-family housing

units located on four tracts of land near the Olympic Stadium in Atlanta, Georgia

(the “Property”). JBP planned to rent the Property during the 1996 Olympic

Games and then sell the units as low-income housing.

       JBP alleges that ownership of the loan secured by the Property was



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     The Federal Deposit Insurance Corporation (“FDIC”) has since succeeded the RTC. They will
be referred to collectively as “RTC/FDIC.”

                                              2
transferred to it on January 31, 1996, the date on the Bill of Sale and Assignment

of Loans from the RTC. Under the terms of the written contract between the RTC

and JBP, the RTC was not obligated to actually deliver the loan documents to JBP

until March 15, 1996.

      Upon receipt of the loan file, JBP took steps to foreclose on the

nonperforming loan in order to obtain title to the Property. At an undetermined

time either before or after JBP’s purchase of the loan pool, the Metropolitan

Atlanta Olympic Games Authority (“MAOGA”) initiated a condemnation action

on the property in the Superior Court of Fulton County. Plaintiff alleges that

during the course of these proceedings, the RTC/FDIC negotiated with MAOGA as

if it were still the owner of the property and did not notify JBP that it was

negotiating with MAOGA. On February 22, 1996, three weeks after the official

transfer date of the loan to JBP, an Award of the Special Master of the Superior

Court was entered indicating that an agreement had been reached between the

RTC/FDIC and MAOGA in which the parties consented to the Property’s

condemnation and stipulated to an award of $163,462.00 based upon an

independent appraisal of the Property. The condemnation award was funded by

Peoples Town Development Corporation, a low-income housing developer.

      On May 7, 1996, the Sheriff’s sale and foreclosure measures instituted by


                                           3
JBP were completed, and JBP recorded the deed to the Property. On the same day,

MAOGA recorded its deed of title to the Property. Upon checking title just prior

to recording the foreclosure deed, JBP discovered the pending condemnation of the

Property. JBP attempted to intervene in the condemnation action asserting its

ownership interest in the Property, but MAOGA had already bulldozed the housing

units in preparation for the Olympics.

      JBP then disputed ownership of the Property with Peoples Town, the group

to which MAOGA had transferred its interest. JBP ultimately quit-claimed its

interest in the Property to Peoples Town for $2,000,000.00. JBP argues, however,

that this amount does not reflect the fair market value of the Property. On January

14, 1998, JBP filed suit in district court against the RTC/FDIC under the Federal

Tort Claims Act, alleging breach of contract, conversion, trespass, negligence, and

interference with property rights. JBP sought compensatory damages in the

amount of $1.3 million, offset by the consideration already paid by People’s Town,

as well as punitive damages.

      The Government moved to dismiss for lack of subject matter jurisdiction on

the grounds that JBP’s tort claims were barred by the “misrepresentation”

exception to the FTCA, and that JBP’s breach of contract claim was barred by the

Little Tucker Act, 28 U.S.C. § 1346. Alternatively, the Government argued that


                                         4
JBP’s tort claims should be dismissed for failure to state a claim upon which relief

could be granted.

      On February 22, 1999, the district court granted the Government’s motion to

dismiss for lack of subject matter jurisdiction. As for the tort claims, the court

found that “all of JBP’s injuries arise not out of FDIC’s negligent performance of

operational tasks in connection with the loan transfer but, instead arise, solely out

of RTC’s failure to convey information to JBP about the pending condemnation

proceedings and out of FDIC’s misrepresentations to MAOGA that RTC still

owned an interest in the property.” Order at 4. The court held that “[h]aving found

that these claims arise solely out of misrepresentations by the Government, they

must be dismissed pursuant to § 2680(h).” Order at 4. The district court also

concluded that it lacked jurisdiction over JBP’s breach of contract claim because

the Little Tucker Act, 28 U.S.C. § 1346, provides that breach of contract claims

against the government in excess of $10,000 lie within the exclusive jurisdiction of

the United States Court of Federal Claims. Order at 5-6. JBP does not challenge

the district court’s holding as to its breach of contract claim, but does challenge the

dismissal of its tort claims.

                                          II.

      We review de novo the district court’s dismissal of an action for lack of


                                           5
subject matter jurisdiction and its interpretation and application of statutory

provisions. See Ochran v. United States, 117 F.3d 495, 499 (11th Cir. 1997); see

also Pillow v. Bechtel Constr. Inc., 201 F.3d 1348, 1351 (11th Cir. 2000).

      The law at issue in this case is clearly established and not in dispute.

“Absent a waiver, sovereign immunity shields the Federal Government and its

agencies from suit.” FDIC v. Meyer, 510 U.S. 471, 475, 114 S.Ct. 996, 1000, 127

L.Ed.2d 308 (1994); see also United States v. Testan, 424 U.S. 392, 399, 96 S.Ct.

948, 953, 47 L.Ed.2d 114 (1976); United States v. Sherwood, 312 U.S. 584, 586,

61 S.Ct. 767, 769, 85 L.Ed. 1058 (1941). The terms of the federal government’s

“consent to be sued in any court define that court’s jurisdiction to entertain the

suit.” Sherwood, 312 U.S. at 586, 61 S.Ct. at 770. The Federal Tort Claims Act

provides a limited waiver of sovereign immunity making the United States liable

for “injury or loss of property, or personal injury or death caused by the negligent

or wrongful act or omission of any employee of the Government while acting

within the scope of his office of employment . . . .” 28 U.S.C. § 1346(b). Where

the FTCA applies, the United States may be liable for certain torts “in the same

manner and to the same extent as a private individual under like circumstances . . .

.” 28 U.S.C. § 2674.

      Congress, however, “adopted several exceptions to this consent to be sued,


                                           6
which must be strictly construed in favor of the United States.” McNeily v. United

States, 6 F.3d 343, 347 (5th Cir. 1993); see also Baum v. United States, 986 F.2d

716, 719 (4th Cir. 1993) (noting that “waiver of immunity is tempered by a rather

extensive list of exceptions”). If the alleged conduct falls within one of these

statutory exceptions, the court lacks subject matter jurisdiction over the action. See

Dalehite v. United States, 346 U.S. 15, 31, 73 S.Ct. 956, 965, 97 L.Ed. 1427

(1953); Boda v. United States, 698 F.2d 1174, 1176 (11th Cir. 1983).

      At issue in the present case is the “misrepresentation” exception to the

FTCA. The misrepresentation exception bars any claim “[a]rising out of . . .

misrepresentation, deceit, or interference with contract rights.” 28 U.S.C. §

2680(h). The test in applying the misrepresentation exception is whether the

essence of the claim involves the government’s failure to use due care in obtaining

and communicating information. See Block v. Neal, 460 U.S. 289, 296, 103 S.Ct.

1089, 1093, 75 L.Ed.2d 67 (1983) (explaining that “[t]he essence of an action for

misrepresentation, whether negligent or intentional, is the communication of

misinformation on which the recipient relies”); United States v. Neustadt, 366 U.S.

696, 706-07, 81 S.Ct. 1294, 1300-01, 6 L.Ed.2d 614 (1961) (holding that the

breach of the “duty to use due care in obtaining and communicating information

upon which that party may reasonably be expected to rely in the conduct of his


                                          7
economic affairs, is only to state the traditional and commonly understood legal

definition of the tort of ‘negligent misrepresentation,’ . . . which there is every

reason to believe Congress had in mind when it placed the word

‘misrepresentation’ before the word ‘deceit’ in § 2680(h)”).

       The exception covers actions for negligence when the basis for the

negligence action is an underlying claim for misrepresentation. See Metz v. United

States, 788 F.2d 1528, 1534 (11th Cir. 1986) (emphasizing that a “cause of action

which is distinct from one of those excepted under 2680(h) will nevertheless be

deemed to ‘arise out of’ an excepted cause of action when the underlying

governmental conduct which constitutes an excepted cause of action is ‘essential’

to plaintiff’s claim”); Rey v. United States, 484 F.2d 45, 49 (5th Cir. 1973)

(barring a claim for negligence where the “negligently erroneous transmission of

misinformation is the crucial element in the chain of causation from defendant’s

negligence to plaintiffs’ damages);2 Mt. Homes, Inc. v. United States, 912 F.2d

352, 355 (9th Cir. 1990) (holding that plaintiff’s claim for failure to communicate

correct sales tax information “is in essence an action for negligent

misrepresentation”); Leaf v. United States, 661 F.2d 740, 742 (9th Cir. 1981)



   2
     Fifth Circuit decisions issued prior to October 1, 1981 are binding precedent in the Eleventh
Circuit. See Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc).

                                                8
(holding plaintiff’s negligence claim barred by misrepresentation exception

because the alleged false representation was “within the chain of causative events

upon which plaintiff’s claim is founded”).

      “It is the substance of the claim and not the language used in stating it which

controls” whether the claim is barred by an FTCA exception. See Gaudet v.

United States, 517 F.2d 1034, 1035 (5th Cir. 1975). Thus, a plaintiff cannot

circumvent the misrepresentation exception simply through the artful pleading of

its claims. See Atorie Air, Inc. v. Fed. Aviation Admin., 942 F.2d 954, 958 (5th

Cir. 1991) (rejecting plaintiff’s attempt to recast a misrepresentation claim as one

for breach of duty of good faith and fair dealing and explaining that “causes of

action distinct from those excepted under section 2680(h) are nevertheless deemed

to be barred when the underlying governmental conduct ‘essential’ to the

plaintiff’s claim can fairly be read to ‘arise out of’ conduct that would establish an

excepted cause of action”); Mt. Homes, 912 F.2d at 356 (analyzing whether

plaintiff’s claim fell within the misrepresentation exception and explaining that

“[a]lthough it has couched its complaint in terms of the breach of a duty to prepare

the documents adequately, we look beyond the characterization to the conduct on

which the claim is based”); Lambertson v. United States, 528 F.2d 441, 443 (2d

Cir. 1976) (explaining that “[i]n determining the applicability of the 2580(h)


                                           9
exception, a court must look, not to the theory upon which the plaintiff elects to

proceed, but rather to the substance of the claim which he asserts”).

      JBP argues that the misrepresentation exception does not bar its claims

because its claims against the Government are not grounded in

“misrepresentation,” but instead in the Government’s negligent performance of an

operational task. In Block, the Supreme Court made clear that the

misrepresentation exception “does not bar negligence actions which focus not on

the Government’s failure to use due care in communicating information, but rather

on the Government’s breach of a different duty.” Block, 460 U.S. at 297, 103 S.Ct.

at 1093-94 (holding that respondent’s claim against the government for negligent

supervision of the construction of her home was not barred by the

misrepresentation exception because the government’s “duty to use due care to

ensure that the builder adhere to previously approved plans and cure all defects

before completing construction is distinct from any duty to use due care in

communicating information to respondent”); see also Guild v. United States, 685

F.2d 324, 325 (9th Cir. 1982) (explaining that “[t]he Government is liable for

injuries resulting from negligence in performance of operational tasks even though

misrepresentations are collaterally involved. It is not liable, however, for injuries

resulting from commercial decisions made in reliance on government


                                          10
misrepresentations.”). Specifically, JBP argues that the Government was negligent

in selling it the loan securing the Property and then continuing to act as though it

had an ownership interest in the Property by negotiating a condemnation award

with MAOGA. JBP contends that its tort claims are based on the Government’s

negligent performance of a particular task, not on the Government’s

misrepresentations, and, therefore, the claims are not barred by the

misrepresentation exception.

      JBP’s characterization of its claims is unpersuasive. The basis for JBP’s

claims against the Government is the Government’s misrepresentations to JBP and

MAOGA. JBP’s complaint makes clear that the Government’s failure to

communicate information to JBP about the Government’s negotiations with

MAOGA is central to its claim for damages.3 The complaint alleges that “[t]he

RTC/FDIC did not notify Plaintiff that it was negotiating with MAOGA and

PeoplesTown as if it still owned the Property, did not notify Plaintiff of the

existence of the condemnation action, and did not cease negotiations upon selling

the Property in question to Plaintiff.” Complaint, ¶ 14. Also central to JBP’s

claims is the Government’s misrepresentation to MAOGA regarding its continued



      3
        The misrepresentation exception encompasses failure to communicate as well as
miscommunication. See Neustadt, 366 U.S. at 706-07, 81 S.Ct. at 1300-01.

                                          11
ownership of the loan during the condemnation proceeding. While JBP contends

that the basis for its tort claims is the Government’s negligent act of continuing

negotiation with MAOGA subsequent to its sale of the ownership interest in the

Property to JBP, the basis of the Government’s negligence, in fact what makes it

negligence in the first place, is the Government’s misrepresentation to MAOGA

regarding its current ownership of the loan. It is that misrepresentation which is

the “crucial element of the chain of causation” upon which JBP’s claims are

founded. See Rey, 484 F.2d at 49; see also Leaf, 661 F.2d at 742 (failure to

provide information to plaintiffs was the misrepresentation “at the heart of

plaintiffs’ complaint, however deftly they have attempted to avoid using the

word”). Without the false representation by the Government that it was the owner

of the Property, the consent agreement in the condemnation proceedings never

would have been consummated, the Property would not have been demolished, and

JBP would have suffered no injury.

      Moreover, the Plaintiff does not point to any negligence by the Government

that is independent of or in any real way removed from its misrepresentations to

JBP and MAOGA. The only “task” JBP complains of is the Government’s selling

the loan to JBP and then continuing to negotiate with MAOGA, just as though it

still had an ownership interest in the Property. Again, we emphasize that at its core


                                          12
the negligent “act” is the Government’s misrepresentation to MAOGA regarding

its ownership interest in the Property and its misrepresentation to JBP regarding its

continued negotiation in the condemnation proceedings.

      JBP also suggests that its claims against the Government are not barred by

the misrepresentation exception because it does not allege that the Government

directly misrepresented any facts to JBP. As we have noted, the Government’s

failure to communicate to JBP the fact that it was engaged in condemnation

proceedings with MAOGA is central to JBP’s claims, and failure to communicate,

as well as direct miscommunication, is encompassed by the misrepresentation

exception. See Neustadt, 366 U.S. at 706-07, 81 S.Ct. at 1300-01. Moreover, it

does not matter for purposes of the misrepresentation exception whether the

misrepresentations causing JBP’s claims were made directly to it or to some third

party. See Schneider v. United States, 936 F.2d 956, 960 (7th Cir. 1991) (holding

plaintiffs’ claims, based on the government’s misrepresentation to the private

builder from whom plaintiffs bought their homes, were barred by the

misrepresentation exception); Baroni v. United States, 662 F.2d 287, 288-89 (5th

Cir. 1981) (holding plaintiff homeowners’ claims were barred by the

misrepresentation exception even though the government’s miscalculation was

communicated to the real estate developer and not to the plaintiffs directly). Thus,


                                         13
even if the Government’s misrepresentations were only to MAOGA and not to

JBP, this fact is legally irrelevant to the determination of whether JBP’s claims

against the Government are barred by the FTCA.

      In short, the district court properly concluded that the underlying conduct

essential to JBP’s tort claims was not the Government’s negligent performance of a

particular task in connection with the loan transfer, but instead the Government’s

failure to convey any information to JBP about the pending condemnation

proceedings, and its misrepresentations to MAOGA regarding the Government’s

ownership interest in the Property. Accordingly, we must affirm the dismissal of

JBP’s tort claims for lack of subject matter jurisdiction.

      AFFIRMED.




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