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Armstrong v. Nielsen

United States District Court, M.D. Louisiana

October 9, 2018

TAYLOR ARMSTRONG
v.
KIRSTJEN NIELSEN, SECRETARY OF THE DEPARTMENT OF HOMELAND SECURITY[1]

          RULING AND ORDER

          BRIAN A. JACKSON JUDGE.

         Before the Court is the Motion to Dismiss (Doc. 15) filed by the Defendant Federal Emergency Management Agency. Plaintiff Tammy Armstrong filed an opposition, (Doc. 17), and Defendant filed a reply. (Doc. 18). For the following reasons, the Motion to Dismiss (Doc. 15) is GRANTED.

         I. BACKGROUND

         This case arises from the catastrophic flooding that struck southern Louisiana in August 2016. (Doc. 1 at ¶ 5). Plaintiff alleges that the flood caused substantial damage to her property at 3643 Yosemite Drive, Baton Rouge, Louisiana. Id. She also alleges that the Federal Emergency Management Agency ("FEMA") issued her insurance under the National Flood Insurance Program, and FEMA has failed to pay her flood claim. Id. at ¶ 3.

         By way of background, the National Flood Insurance Program is a federally supervised insurance program established by the National Flood Insurance Act of 1968 and administered by FEMA, which guarantees and subsidizes flood insurance. See 44 C.F.R. §§ 59-79 (2013). The National Flood Insurance Program includes two types of government-financed flood insurance. First, there is the Government program, where policyholders, like Plaintiff, are insured directly by FEMA. Palmieri v. Allstate Ins. Co., 445 F.3d 179, 183 (2d Cir. 2006) (citing 42 U.S.C. §§ 4071-4072) (internal quotations and citation omitted). In the Government program, "the government run[s] the National Flood Insurance Program itself-offering federally underwritten policies[.]" Id. Under the second program, which Plaintiffs claims do not arise under, called the Write Your Own program ("WYO"), policyholders are insured by participating private insurance companies. Id. "Although FEMA may issue policies directly under the Government Program, 'more than 90% are written by WYO companies.'" Id. (quoting C.E.R. 1988, Inc. v. Aetna Cas. and Surety Co., 386 F.3d 263, 267 (3d Cir. 2004)).

         Plaintiff contends that she filed a flood claim with FEMA, and FEMA submitted an estimate for $49, 255.00 with an accompanying payment of $36, 565.60, but that this amount was less than she needed to repair her property. (Doc. 1 at ¶ 7). Plaintiff then alleges that she submitted a supplemental flood claim totaling $69, 159.44. Id. at ¶ 8. She alleges that FEMA agreed through a claims adjuster to pay an additional $39, 957.63 plus $7, 651.85 for depreciation, but has failed to do so. Id. at ¶ 9.

         Plaintiff sued the Acting Secretary of Homeland Security.[2] Id. at ¶ 2. She sued for breach of insurance contract and failure to tender payment for casualty losses. Id. at ¶ 2. Defendant thereafter filed a Motion to Dismiss. (Doc. 15).

         II. LEGAL STANDARD

         "Federal courts are courts of limited jurisdiction; without jurisdiction conferred by statute, they lack the power to adjudicate claims." In re FEMA Trailer Formaldehyde Products Liab. Litig, 668 F.3d 281, 286 (5th Cir. 2012). Under Rule 12(b)(1) a claim is "properly dismissed for lack of subject-matter jurisdiction when the court lacks the statutory or constitutional power to adjudicate the claim." Id. (quoting Home Builders Ass'n, Inc. v. City of Madison, 143 F.3d 1006, 1010 (5th Cir. 1998)). A court should consider a Rule 12(b)(1) attack before addressing any challenge on the merits. Id.

         III. DISCUSSION

         Defendant contends that Plaintiff has improperly sued the Secretary of Homeland Security, rather than the Administrator of FEMA who is the proper defendant. (Doc. 15-1 at p. 3). In support of its argument, Defendant relies on the provision of the National Flood Insurance Act, which provides federal courts with jurisdiction to hear disputes over National Flood Insurance claims. See 42 U.S.C. § 4072. Under 42 U.S.C. § 4072, the United States has enacted a limited waiver of sovereign immunity to provide federal courts with exclusive jurisdiction for claims arising out of the National Flood Insurance Program. Ferraro v. Liberty Mut. Fire Ins. Co., 796 F.3d 529, 531 (5th Cir. 2015). Section 4072 provides that a national flood insurance claimant "may institute an action against the Administrator on such claim in the United States district court for the district in which the insured property or the major part thereof shall have been situated[.]" Id. (emphasis added). "Administrator" refers to the Administrator of FEMA. § 4004(a)(3). And federal courts have jurisdiction over these claims "without regard to the amount in the controversy." § 4072.

         Even though Plaintiff agrees that § 4072 provides that claimants must sue the Administrator of FEMA for National Flood Insurance-related claims, Plaintiff argues that the Secretary of Homeland Security is the proper defendant. (Doc. 17 at p. 1-2). Plaintiff contends that because the Homeland Security Act of 2002, which created the Department of Homeland Security, transferred FEMAs functions to the Department of Homeland Security, the Secretary of Homeland Security must be sued for claims involving the National Flood Insurance Program. (Doc. 17 at p. 2). In other words, Plaintiff contends that because FEMA moved under Homeland Security's umbrella, only the Secretary of Homeland Security may be sued for flood-related claims. Plaintiff is correct that in 2002, FEMA's functions were transferred to Homeland Security, but it does not follow that the Secretary of Homeland Security must be sued for National Flood Insurance Program claims. See Homeland Security Act of 2002, PL 107-296, tit. V, § 503, November 25, 2002, 116 Stat 2135.

         The problem with Plaintiffs argument is that ten years after Congress created the Department of Homeland Security, and it supposedly stripped the FEMA administrator of its role, Congress amended the National Flood Insurance Act to provide that the Administrator of FEMA must be sued for National Flood Insurance Program claims. See Moving Ahead for Progress in the 21st Century Act, Pub. L. 112-141, div. f, tit. II, § 100238(b)(1), 126 Stat. 412 (2012) (codified at 42 U.S.C. § 4072 and 4121(a)(6) (2016)). Before 2012, claimants had to sue the Director of FEMA. See Supplemental Appropriations Act, Pub. L. 98-181, tit. IV, § 451(d)(1), 97 Stat. 1157 (1983) (codified at 42 U.S.C. § 4072 and 4121(a)(6) (1988)). And before 1983, claimants had to sue the Secretary of Housing and Urban Development. See National Flood Insurance Act of 1968, Pub. L. 90-448, tit. XIII, § 1341 and 1370(6), 82 Stat. 584 (1968) (codified at 42 U.S.C. § 4072 and 4121(a)(6) (1970)).

         When Congress amends a statute, it reflects an intention to change the meaning of that statute. See Rumsfeld v. Forum for Academic & Institutional Rights, Inc.,547 U.S. 47, 57-58 (2006). The Supreme Court has "refuse[d] to interpret [a statute] in a way that negates its recent revision, and indeed would render it a largely meaningless exercise." Id. But that is precisely what Plaintiff seeks to do. If Plaintiff were correct that the Homeland Security Act of 2002 requires claimants to sue the Secretary of Homeland Security for National Flood Insurance ...


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