Louisiana v. Mayorkas

The federal district court for the Eastern District of Louisiana allowed two sets of plaintiffs (10 states and three Louisiana parishes) to proceed with their challenge to “Risk Rating 2.0—Equity in Action,” the Federal Emergency Management Agency’s (FEMA’s) new methodology for calculating premiums for flood insurance under the National Flood Insurance Program (NFIP). The court found that the 10 plaintiff states did not plausibly allege an injury to their sovereign interests caused by Risk Rating 2.0 and also did not allege parens patriae standing on behalf of their residents based on actual or imminent injury to land and property within the states’ borders. In addition, the court found that neither the more than 60 municipal entities nor the state plaintiffs could establish standing based on alleged loss of tax revenues or on past mitigation costs to protect residents from flood damage. The court concluded, however, that the plaintiff states plausibly alleged standing based on a theory that they would incur costs of mitigation because higher premiums would result in homeowners dropping mandatory flood insurance, increasing the States’ liability to the Federal Emergency Management Agency for reimbursement of funds received by those homeowners, and also increasing the states’ rebuilding costs. The court also found that three Louisiana parishes that were NFIP policyholders had established standing based on increased premium rates. The court found that the sole nongovernmental plaintiff—the Association of Levee Boards of Louisiana—had not established associational or organizational standing. The court granted the defendants’ motion to dismiss NEPA claims because the plaintiffs alleged only economic injuries, which fell outside NEPA’s zone of interests. The court also denied the plaintiffs’ motion for a preliminary injunction restraining enforcement of Risk Rating 2.0, finding that the defendants had shown that reinstating the “Legacy Rating System” would not be “nearly as simple or harmless” as the plaintiffs argued it would be. The court concluded that one of the parish plaintiffs failed to establish irreparable injury would occur before a trial on the merits and that the other remaining plaintiffs failed to show that any irreparable injury would outweigh harm to the defendants and the public. The court did not address the plaintiffs’ likelihood of success on the merits.

Ten states, along with numerous Louisiana parishes, two Louisiana towns, and a number of Louisiana levee and drainage districts, filed a lawsuit in the federal district court for the Eastern District of Louisiana alleging that the Federal Emergency Management Agency (FEMA) had adopted a new methodology for calculating flood insurance rates in the National Flood Insurance Program that would make flood insurance much more expensive . The plaintiffs asserted that this methodology, called Risk Rating 2.0—Equity in Action, “ignores historical observed flood events and demonstrably effective mitigation efforts in favor of future flood hypotheticals to determine the flood risk of each insured property.” The plaintiffs argued that the new methodology was contrary to law; arbitrary and capricious; and unconstitutional. They alleged that FEMA acted arbitrarily and capriciously by failing to consider the reliance interests of those affected and by failing to take into account important aspects of the problem, including by considering “inappropriate factors” such as “future climate change,” which the plaintiffs alleged “does not relate to the risk a property actually faces today.” The complaint also asserted that the methodology was arbitrary and capricious because it departed from prior policy without adequate justification and that FEMA “acted pretextually” by “tweaking flood insurance rates to meet its separate objective of addressing future climate change.” In addition, the complaint asserted that FEMA adopted the methodology without compliance with notice-and-comment requirements, exceeded its statutory authority, failed to comply with NEPA, and violated the Spending Clause.