Mississippi Insurance Department v. U.S. Department of Homeland Security

After President Obama signed legislation—The Homeowner Flood Insurance Affordability Act of 2014, <a href="https://www.congress.gov/113/plaws/publ89/PLAW-113publ89.pdf">Pub. L. No. 113-89</a>—in March 2014 rolling back flood insurance reform measures enacted in BW-12, the Mississippi Insurance Department filed a notice of voluntary dismissal to withdraw the lawsuit. The dismissal was without prejudice, and the Mississippi Insurance Commissioner said that the agency would refile the lawsuit if implementation of the new legislation does not address affordability concerns.

The United States filed a motion to dismiss for lack of subject matter jurisdiction. The U.S. argued that the Mississippi Insurance Department (MID) had no standing as a state agency and that it could not bring claims on behalf of Mississippi citizens. The U.S. also said that an order from the court would not redress the alleged injuries because the relief sought was only available from Congress; that the actions MID sought to require did not constitute reviewable “agency action”; and that claims as to portions of BW-12 that the government did not intend to implement for at least a year were not ripe.

The Mississippi Insurance Department (MID) filed a lawsuit in the federal district court for the Southern District of Mississippi seeking to enjoin or stay rate increases for the National Flood Insurance Program (NFIP). The increased rates became effective on October 1, 2013. MID alleged that the Federal Emergency Management Agency (FEMA) acted arbitrarily and capriciously by imposing substantial rate increases prior to completing studies, including an affordability study, mandated by the Biggert-Waters Flood Insurance Reform and Modernization Act of 2012 (BW-12). BW-12, which President Obama signed in July 2012, “requires changes to all major components of the [NFIP], including flood insurance, flood hazard mapping, grants, and the management of flood plains.” MID noted that “[m]any of the changes are designed to make the NFIP more financially stable, and ensure that flood insurance rates more accurately reflect the real risk of flooding,” but that BW-12 “is perceived as an oncoming economic disaster to Mississippi citizens and other persons having homes or businesses located in a flood zone.” In addition to injunctive relief, MID also sought a declaration that FEMA must undertake the studies required by BW-12 prior to making its rate determinations. Other states and state insurance departments filed amicus curiae papers in support of MID’s claims, including Florida, the Louisiana Department of Insurance, Massachusetts, and the South Carolina Department of Insurance.