D. Md. Notes Split Within Fourth Circuit re Preemption of State Law Claims by National Flood Insurance Law
PerReeder v. Nationwide Mut. Fire Ins. Co., --- F.Supp.2d ----, 2006 WL 618814 (D.Md. Mar. 13, 2006):
The Fourth Circuit . . . recently declined to address preemption of state law claims in the national flood insurance context. See Battle v. Seibels Bruce Ins. Co., 288 F.3d 596, 609 n. 20 (4th Cir.2002) ("Given our disposition of the Remaining Claims, resolution of the various preemption issues raised by SCIC in this appeal would be premature."). In addition, United States District Courts within the Fourth Circuit appear to be divided with respect to whether state law tort claims are preempted by national flood insurance law. Compare Bleecker v. Standard Fire Ins. Co., 130 F.Supp.2d 726, 735 (E.D.N.C.2000) (Finding that "NFIA does not preempt plaintiff's state law tort claims" under "North Carolina's Unfair Trade Practices Act, N.C.Gen.Stat. § 58-63-15.") with Peal v. N.C. Farm Bureau Mut. Ins. Co., 212 F.Supp.2d 508, 517 (E.D.N.C.2002) (Concluding that "subjecting WYO companies to North Carolina's bad faith statutes-- §§ 75-1.1 and 58-63- 15(11)--would frustrate NFIA's objectives" and "respectfully reject[ing] the Bleecker court's reasoning for declining to find a conflict between the NFIA and § 58-63-15(11) ...."); see also Houck v. State Farm Fire & Cas. Co., 194 F.Supp.2d 452, 461-69 (D.S.C.2002) (finding that conduct in the policy procurement context constituting fraud and civil conspiracy raises matters that predominantly deal with state law); Waltrip v. Brooks Agency, Inc., No. 2:05CV627, 2006 WL 268880, *3-4 (E.D.Va. Feb.1, 2006) ("[F]ollowing the persuasive reasoning provided in Houck, the court determines that the legal issues in dispute implicate primarily state law because plaintiffs' allegations do not involve a claim under an SFIP, the interpretation of an SFIP, or a dispute related to the NFIP rules and regulations, but rather primarily focus on the procurement of an insurance policy and the alleged wrongful conduct of the agent.").
Having reviewed the cases, statutes, and regulations cited by the parties, this Court finds that state law tort claims arising out of alleged misrepresentations made during the procurement of an SFIP are not preempted in the flood insurance context.