In the

United States Court of Appeals
               For the Seventh Circuit

No. 09-2410

JESSIE W ILLIAMS,
                                                  Plaintiff-Appellant,
                                  v.

JERRY F LEMING, individually
and in his official capacity,
                                                 Defendant-Appellee.


             Appeal from the United States District Court
        for the Northern District of Illinois, Eastern Division.
          No. 1:07-cv-04672—Rebecca R. Pallmeyer, Judge.



  A RGUED N OVEMBER 30, 2009—D ECIDED F EBRUARY 26, 2010




  Before K ANNE, R OVNER, and W ILLIAMS, Circuit Judges.
  K ANNE, Circuit Judge. Jessie Williams was a customer
of Family Bank & Trust Company in Illinois. Following
a Federal Deposit Insurance Corporation (FDIC) routine
examination in late 2005, Family Bank stopped making
loans to Williams, supposedly at the behest of FDIC
Associate Examiner Jerry Fleming. The alleged catalyst
for Fleming’s decision was a racially motivated bias
2                                               No. 09-2410

against Williams and other African-Americans. In re-
sponse, Williams sued Family Bank, the United States,
and Fleming, alleging various causes of action arising
under the Constitution, state law, and the Federal Tort
Claims Act (FTCA), 28 U.S.C. §§ 1346(b), 2671-80 (1946).
The district court dismissed the claim against Family
Bank because Family Bank was not a state actor, as is
required for a properly pled Fifth Amendment violation.
It also dismissed the claim against the United States
because the FTCA expressly exempts the United States
from suit in slander actions. As a consequence of the
FTCA dismissal, the district court found that the FTCA’s
judgment bar applied to prohibit Williams’s remaining
Bivens suit against Fleming, resulting in a dismissal of
his third and final claim from federal court. It is the
dismissal of Fleming on the basis of the judgment bar
that Williams challenges on appeal. We affirm.


                     I. B ACKGROUND
  Jessie Williams was a customer of Family Bank with
close to three million dollars in outstanding personal
and business loans. In late 2005, the FDIC, led by
Associate Examiner Jerry Fleming, conducted a routine
safety and soundness examination at Family Bank. At the
time of the examination, Williams was in good standing
and had never been late with a payment.
  Williams alleges that during the examination, Fleming
made racially discriminatory statements to Family Bank’s
President, James Zaring, about the city of Harvey, Illinois,
and about the bank’s practice of initiating loans in the
No. 09-2410                                              3

predominantly African-American suburb. Fleming and
other FDIC employees also supposedly made racially
disparaging remarks about Williams specifically. Williams
alleges that during this examination, Fleming ordered
Zaring and Family Bank to refuse all further loans to
Williams and other members of his community because
of their race.
  Williams alleges that as a result of these statements and
the directive issued by Fleming, any subsequent loan
applications that Williams submitted were not con-
sidered in the ordinary course of business and were
instead denied immediately. Williams claims to have
been denied credit by several other banking institutions
as a direct result of Fleming’s actions.
  Williams filed a second amended complaint in
April 2008 asserting a claim against Family Bank arising
under the Fifth Amendment; a claim against Family Bank
and, through the FTCA, against the United States, the
basis of which was the Illinois Human Rights Act,
which makes it a civil rights violation for a “financial
institution” to unlawfully discriminate in the provision
of credit; and a Bivens claim against Fleming based on
the Fifth Amendment.
   The district court dismissed Family Bank from
the suit because it could not violate the Constitution as
a non-state actor. The district court also granted the
United States’ motion to dismiss the FTCA claim against
it in July 2008, finding that the FTCA’s reservation of
sovereign immunity in 28 U.S.C. § 2680(h) was
applicable because it prohibits suit against the United
4                                                No. 09-2410

States for “[a]ny claim arising out of . . . abuse of process,
libel, slander, misrepresentation, deceit, or interference
with contractual rights.” In determining the applicability
of § 2680(h), the district court characterized Williams’s
claim as one for slander, because no independent tort of
racial discrimination exists under Illinois law, and the
essence of the claim alleged fit best under the rubric of
slander. The district court found that, in any case, the
FDIC did not act as a financial institution with regard
to Williams,1 so Williams failed to state a claim under
state law, which is a prerequisite to an FTCA claim.
See, e.g., Doe v. United States, 

, 1082-83 (7th
Cir. 1992) (dismissing an FTCA claim because Illinois no
longer recognized the underlying state tort of seduction).
  In November 2008, Fleming filed a motion to dismiss
based on the FTCA’s judgment bar, 28 U.S.C. § 2676,
arguing that the court’s FTCA judgment for the United
States barred Williams’s individual capacity claim against
Fleming. In April 2009, the district court granted the
motion to dismiss, finding that the FTCA’s judgment bar
was applicable. It reached this conclusion by referencing
our decision in Hoosier Bancorp of Indiana v. Rasmussen,

(7th Cir. 1996), where we affirmed a district
court decision that concluded that a dismissal based
on the discretionary function exception contained in


1
  The district court did not address the question of whether
the FDIC could ever be a financial institution. Because it
found that the FDIC did not act as a financial institution in
this instance, it prudently reserved judgment on that broader
question.
No. 09-2410                                                  5

§ 2680(a) was a “judgment” for purposes of § 2676.2
Because a “judgement” is all that § 2676 requires as a
prerequisite to its operation, the district court in the
instant case similarly found that a dismissal on the basis
of § 2680(h) was a judgment, thereby barring Williams’s
Bivens claim. This appeal followed.


                        II. A NALYSIS
   Generally, an individual may not sue the United States
for tortious conduct committed by the government or
its agents. United States v. Navajo Nation, 

,
1551 (2009) (“The Federal Government cannot be sued
without its consent.”). In 1946, Congress created the
FTCA, one purpose of which was to compensate indi-
viduals by allowing suit against the United States for
torts committed during the commission of a federal em-
ployee’s official duties. See 28 U.S.C.A. § 2671, Stat. Notes,
Sec. 2 of Pub. L. 100-694(b). But, understanding the impor-



2
  We did not have occasion in Hoosier Bancorp to address
specifically whether a judgment granted on the basis of § 2680
was a judgment for purposes of the judgment bar statute.
Instead, we focused on whether a judgment must be favorable
for the judgment bar to 

. But, because
we affirmed the dismissal based on the application of the judg-
ment bar, Fleming and the district court concluded in the
instant case that Hoosier Bancorp supports the proposition that
any dismissal, whether or not on the merits, suffices for ap-
plication of § 2676. We need not address this contention today
because of our resolution of the case.
6                                               No. 09-2410

tance of sovereign immunity, Congress chose to limit
the types of tortious conduct for which the government
could be sued. See Brandes v. United States, 

,
896 (9th Cir. 1986). Not only does the FTCA reserve the
government’s immunity for specifically enumerated
torts, 28 U.S.C. § 2680, but also it provides various pro-
cedural mechanisms that help preserve sovereign im-
munity, see, e.g., 28 U.S.C. §§ 2675-77. One such
mechanism is the judgment bar, found at 28 U.S.C. § 2676.
  The judgment bar recognizes that the purpose of sover-
eign immunity is to protect the United States not simply
from the financial consequences of suit, but also from
the burden of defending against suit. See, e.g., Hoosier

. Accordingly, the judgment
bar provides: “The judgment in an action under section
1346(b) of this title shall constitute a complete bar to any
action by the claimant, by reason of the same subject
matter, against the employee of the government whose
act or omission gave rise to the claim.” 28 U.S.C. § 2676.
The judgment bar therefore preserves sovereign im-
munity by protecting the United States from defending
against separate lawsuits arising from the same conduct.
Gasho v. United States, 

, 1437 (9th Cir. 1994).
  Although we held in Hoosier Bancorp that “ ‘any FTCA
judgment, regardless of its outcome, bars a subsequent
Bivens action on the same conduct that was at issue in
the prior judgment,’ 

(quoting 

), that case focused on whether a judgment
must have been favorable for application of the judg-
ment bar. 

not yet addressed the precise
No. 09-2410                                               7

question of whether a judgment under the FTCA must
be “on the merits” for the judgment bar to apply. Nor
do we reach that question today.
  Instead, we base our decision on our holding in Collins
v. United States, 

, 838 (7th Cir. 2009), where
we explained that the exceptions contained in § 2680
are mandatory rules of decision rather than restrictions
on a court’s subject matter jurisdiction. See also Reynolds
v. United States, 

, 1111-12 (7th Cir. 2008)
(“ ‘The statutory exceptions enumerated in § 2680(a)-(n)
to the United States’s waiver of sovereign immunity . . .
limit the breadth of the Government’s waiver of
sovereign immunity, but they do not accomplish this
task by withdrawing subject-matter jurisdiction from
the federal courts.’ ” (quoting Parrott v. United States,

, 634 (7th Cir. 2008)).
  Because we are reviewing the district court’s inter-
pretation of the judgment bar de novo, Manning v. United
States, 

, 432 (7th Cir. 2008), we may affirm
on any ground supported in the record, Hager v. City of
West Peoria, 

, 872 (7th Cir. 1996); see also
Roland v. Langlois, 

, 962 n.11 (7th Cir. 1991).
Although we ultimately agree with the district court’s
resolution of the case, we reach that outcome through
different reasoning. The district court held that the dis-
missal of the suit against the United States under § 2680(h)
was for lack of subject matter jurisdiction. We disagree.
  In Collins, we discussed our approach to dealing with
the exceptions listed in § 2680. We noted that ours is a
minority position, but nevertheless held firm in our
8                                               No. 09-2410

conviction that ours is the correct 

. We
explained that characterizing the § 2680 exceptions as
jurisdictional is problematic for a few reasons. First, the
nature of sovereign immunity itself compels this con-
clusion. 

Because the legislature is not
required to consent to suit, any consent to suit must be
done statutorily. As a result, “ ‘to say that Congress has
authorized the federal courts to decide a class of disputes
is to say that subject-matter jurisdiction is present.’ ” 

(quoting United States v. T & W Edmier Corp., 

, 765 (7th Cir. 2006)). Therefore, by authorizing
federal courts to hear FTCA claims, Congress has given
us subject matter jurisdiction over the entire class of
cases involving torts claims against the federal govern-
ment.
  Second, we noted the illogic of the argument that the
federal courts do not have jurisdiction to decide cases
arising under § 2680. “Obviously the federal courts are
authorized to decide suits under the Federal Tort Claims
Act; indeed, no other court system is.” 

fact
federal courts could not decide FTCA cases, the statute
would be a nullity, because no decision-maker would
be authorized to hear these cases.
  Finally, we explained that the confusion of whether
the § 2680 exceptions were jurisdictional perhaps
stemmed in part from cases treating defenses to liability
as “an automatic corollary of the [FTCA’s] constituting
a waiver of the federal government’s sovereign im-
munity from suit,” rather than analyzing the issue as
distinct from jurisdictional analysis. 

This argu-
No. 09-2410                                               9

ment is problematic for an obvious reason—it confuses
jurisdiction, or the court’s power to decide a case, with
defenses, or the government’s exceptions from suit.
  Instead, our position recognized that the proper
inquiry is not one of jurisdiction, but whether the
United States has a defense to suit. In conducting this
analysis, lower courts should scrutinize the cause of
action, and if a § 2680 exception applies, then courts
should relieve the United States from the burden of
defending against a lawsuit. The rationale for this dis-
missal is not that the court lacks jurisdiction over the
FTCA issue, but that the United States has a defense
that relieves it from suit.
  Because the cause of action in this case was dismissed
pursuant to § 2680(h), we hold that the claim was not
dismissed for lack of jurisdiction, but for the existence of
a defense. Therefore, the dismissal was on the merits,
and the determination that the judgment bar prevented
Williams’s remaining Bivens action was correct.


                    III. C ONCLUSION
  Because William’s suit against the United States was on
the merits, and not for lack of subject matter jurisdiction,
his remaining Bivens suit was properly barred by section
§ 2676 of the FTCA. The dismissal of Williams’s claim
against Fleming is A FFIRMED.



                           2-26-10