United States District Court, M.D. Louisiana
NOTICE AND ORDER
ERIN
WILDER-DOOMES UNITED STATES MAGISTRATE JUDGE.
On or
about September 19, 2016, Plaintiff filed a Verified Petition
for Damages and/or Breach of Contract (the
“Petition”) in the 19th Judicial
District Court for the Parish of East Baton Rouge, Louisiana
against Bancorpsouth Insurance Services, Inc. d/b/a Wright
& Percy Insurance (“Wright & Percy”) and
Hartford Insurance Company of the Midwest
(“Hartford”) (collectively,
“Defendants”).[1] In the Petition, Plaintiff asserts that
Wright & Percy, the insurance agency or broker for the
flood insurance carrier that provided flood insurance for
Plaintiff's property, negligently failed to place the
proper and required flood insurance upon his property and
failed to act as a prudent insurance agent and/or
broker.[2] Plaintiff also alleges that Hartford
failed to pay Plaintiff what is owed under its policy or
policies of insurance covering Plaintiff's property and
failed to act in good faith in adjusting Plaintiff's
claim or claims.[3]
On
October 28, 2016, Hartford filed a Notice of Removal,
asserting that this Court has federal question jurisdiction
based upon 28 U.S.C. § 1331.[4] Hartford asserts that it is
a Write- Your-Own (“WYO”) Program carrier
participating in the federal government's National Flood
Insurance Program (“NFIP”) pursuant to the
National Flood Insurance Act of 1968
(“NFIA”).[5]Hartford claims that as a WYO Program
carrier, it is authorized to issue the Standard Flood
Insurance Policy (“SFIP”) on behalf of the
federal government pursuant to the arrangement between itself
and the Federal Emergency Management Agency
(“FEMA”), set forth at 44 C.F.R. Pt. 62, App.
A.[6]
Hartford asserts that the SFIP is a codified federal
regulation found in its entirety at 44 C.F.R. Pt. 61, App.
A(1) and is governed exclusively by federal laws and the
NFIA.[7]
Hartford
further asserts that under 42 U.S.C. §4072, federal
courts have original exclusive jurisdiction over claims
involving the administration of and claims handling matters
under the SFIP.[8] Hartford contends that the determination
as to whether it failed to pay Plaintiff the amount owed
under Plaintiff's flood insurance policy and/or whether
Hartford failed to properly adjust Plaintiff's flood
insurance claim or claims and any interpretation of the rules
and regulations of the NFIP will require this Court to
determine whether Hartford, as a WYO carrier, followed the
federal requirements of NFIA and will require the Court to
review and interpret the applicable rules and regulations
governing Hartford's compliance with the written
standards, procedures, and guidance issued by FEMA or NFIA,
which will involve several substantial federal
questions.[9] As such, Hartford claims the Court has
federal question jurisdiction over this case under 28 U.S.C.
§ 1331.
On
November 21, 2016, Plaintiff filed a Motion to Remand,
asserting that removal was untimely under 28 U.S.C. §
1446(b)(1).[10] The Motion to Remand does not address
Hartford's allegations regarding federal question
jurisdiction under 28 U.S.C. § 1331.
It is
not apparent from the face of Plaintiff's Petition, the
Notice of Removal, or the Motion to Remand that this Court
has subject matter jurisdiction over this case under 28
U.S.C. § 1331. The Fifth Circuit has held that federal
law preempts state law tort claims arising from claims
handling by a WYO, but it does not preempt state law
procurement-based claims. Campo v. Allstate Ins.
Co., 562 F.3d 751, 754-57 (5th Cir. 2009); See,
Wright v. Allstate Ins. Co., 415 F.3d 384, 390 (5th Cir.
2005). Stated another way, the Fifth Circuit has concluded
that claims related to insurance claims handling raise a
federal question under 28 U.S.C. § 1331, but claims
related to insurance procurement do not. Campo, 562
F.3d at 757-58. Further, at least one district court within
this Circuit has repeatedly held that when a plaintiff's
claims center on the insurance agent's alleged failure to
procure a contents flood insurance policy, the claims involve
policy procurement and therefore, do not present a federal
question under § 1331. See, Landry v. State
Farm Fire & Cas. Co., 428 F.Supp.2d 531, 535 (E.D.
La. 2006); Nash v. Harry Kelleher & Co., Inc.,
2006 WL 2644960, at *4 (E.D. La. Sept. 14, 2006).
Hartford
does not address Campo, Landry, or
Nash in its Notice of Removal[11] or in its
Opposition to the Motion to Remand.[12] Although Plaintiff has
not filed a Motion to Remand asserting that the Court lacks
subject matter jurisdiction, the Court sua sponte
raises the issue of whether it may exercise federal question
jurisdiction in this matter, specifically, whether this case
involves claims related to insurance procurement or claims
handling.
Because
the face of the Petition does not establish federal question
jurisdiction, the Court also requests evaluation by the
parties of whether diversity jurisdiction exists in this
case.[13]
Accordingly,
IT IS HEREBY ORDERED that Hartford shall
file a memorandum and supporting evidence concerning subject
matter jurisdiction within ten (10) days of the date of this
Notice and Order, and that Plaintiff shall either file a
memorandum and supporting evidence regarding subject matter
jurisdiction or a Motion to Remand for lack of subject matter
jurisdiction. The supplemental memoranda shall be limited to
ten (10) pages and shall specifically address whether the
claims raised in Plaintiff's state court Petition are
related to insurance policy procurement or claims handling
and whether in addition to or in lieu of federal question
jurisdiction there is diversity jurisdiction. Once the Court
has reviewed the supplemental memoranda, the Court will
either allow the case to proceed if jurisdiction is present
or address the Motion to Remand filed by Plaintiff.
Signed
in Baton Rouge, Louisiana,
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Notes:
[1] R. Doc. 1-2.
[2] R. Doc. 1-2 at 4.