In the case of United States v. Neustadt et ux., the Supreme Court ruled that a Federal Housing Administration (FHA) appraisal does not constitute an assurance or guarantee of value, and thus, any reliance on such an appraisal by a home buyer is at their own risk. The plaintiffs had purchased a house based on an FHA appraisal which later turned out to be significantly overvalued due to termite damage that was overlooked during inspection. They sued for damages under the Federal Tort Claims Act alleging negligent misrepresentation by government employees in making the faulty inspection and report. However, the court held that since there was no intentional deception involved nor did FHA owe them any legal duty beyond what it performed, they were not liable for damages resulting from errors in its appraisals.

In the dissenting opinion for United States v. Neustadt et ux., Justice Black disagreed with the majority's ruling that a Federal Housing Administration (FHA) appraiser could not be held liable for negligence in his appraisal of a home, which led to financial loss for the buyers. He argued that this decision was inconsistent with previous rulings where government employees were found liable for negligent actions performed within their official duties. He also contended that it was unfair and unjust to hold private individuals accountable under tort law while exempting government officials from similar responsibility. Furthermore, he expressed concern over how this ruling might affect public trust in governmental operations and services by creating an impression of immunity or lack of accountability among federal employees.