U.S. v. St. Bernard Parish
| Decision Date | 08 April 1985 |
| Docket Number | 83-3760 and 84-3082,Nos. 83-3557,s. 83-3557 |
| Citation | 756 F.2d 1116 |
| Parties | UNITED STATES of America, Plaintiff-Appellant, v. PARISH OF ST. BERNARD, Police Jury of the Parish of St. Bernard, Lake Borgne Basin Levee District, Fosco Enterprises, Inc., Travelers Insurance Co., Parish of Jefferson and Jefferson Parish Council, Regent Development Corp., Jefferson Levee District, Pontchatrain Levee District, Joseph F. Varisco, Jr., and Terry Tedesco, Inc., J.J. Krebs and Sons, Inc., Defendants-Appellees. UNITED STATES of America, Plaintiff-Appellee, v. The PARISH OF JEFFERSON, et al., Defendants-Appellants. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Raymond Childress, Henry J. Miltenberger, Jr., Fritz B. Ziegler, Covington, La., for Lake Borgne Basin Levee Dist.
A. Scott Tillery, Chalmette, La., for Fosco Enterprises, Inc.
John J. Weigel, New Orleans, La., for Fosco Enterprises, Inc. & Travelers Ins. Co.
Ivy A. Smith, Jr., Joseph H. Hurndon, New Orleans, La., for Tedesco, Inc.
Gerald M. Dillon, New Orleans, La., Hubert A. Vondenstein, Gretna, La., for Jefferson Parish & Council.
Rene A. Pastorek, Gretna, La., for Regent Development Corp.
Bruce G. Reed, New Orleans, La., for Jefferson Levee Dist.
John I. Hulse, IV, Kenneth V. Faherty, New Orleans, La., for J.F. Varisco.
Leonard Schaitman, Mark H. Gallant, Michael F. Hertz, Appellate Staff, Civ. Div., Justice Dept., Washington, D.C., for U.S.A.
Stanley E. Loeb, New Orleans, La., for Fireman's Fund Ins. Co.
Phelps, Dunbar, Marks, Claverie & Sims, Harry A. Rosenberg, New Orleans, La., for U.S. Home, Inc., HomeCraft, Inc.
Donald Hammett, Kevin O'Bryon, New Orleans, La., for defendants-appellants Jefferson Parish, et al.
Adam & Reese, Sam A. LeBlanc, III, Rebecca A. Bush, H. Bruce Shreves, Dillon & Cambre, Gerard M. Dillon, New Orleans, La., Hubert A. Vondenstein, Gretna, La., for St. Bernard Parish and The Policy Jury of St. Bernard Parish.
Charles F. Seemann, Jr., Deutsch, Kerrigan & Stiles, New Orleans, La., for Burke & Assoc.
Appeal from the United States District Court for the Eastern District of Louisiana.
Before BROWN, WILLIAMS, and GARWOOD, Circuit Judges.
I. Overview
In this exceptionally complicated consolidated action we are presented with what is apparently a question of first impression under the National Flood Insurance Program (NFIP). The United States Government seeks recovery of over $100 million from various Louisiana public and private defendants. The district judge granted the defendants' motions for summary judgment on several of the government's claims. After various procedural maneuvers, both sides sought, and we granted, an interlocutory appeal to resolve the correctness of the district court's summary disposition.
After briefing, an extended oral argument, and a diligent search of the record, we affirm the district court's opinion dismissing the United States' express contractual claim. Since the government abandoned its public nuisance claim on appeal its dismissal is not before us. We further hold that no implied right of action is available to the United States under the NFIP. We also find that injunctive relief would be ineffectual and accordingly dismiss the government's claim on this ground. However, we do find that subrogation is available to the United States to the extent permitted by Louisiana law. We further hold that the United States may pursue any available common law right of recovery against the parish defendants so as to recover for any property the parishes owned and insured under the NFIP.
II. Case History
The United States instituted two civil actions on behalf of the Federal Emergency Management Agency (FEMA) and the Federal Insurance Administration (FIA), the present and former administrators of the NFIP: (i) No. 81-1808 against the Parish of St. Bernard, the Police Jury of St. Bernard, the Lake Borgne Levy District, the State of Louisiana, and various home builders, engineers, and surveyors; and (ii) No. 81-1810 against Jefferson Parish, the Jefferson Parish Council, Firemen's Insurance Fund Company, La Fourche Basin, Pontchatrain Levy District, Jefferson and West Jefferson Levy Districts, Burk and Associates, and other developers, builders, engineers, and surveyors. The two actions were eventually consolidated. After much jockeying for position, discovery was stayed pending the resolution of the legal availability of the claims filed by the United States.
In its actions the United States alleged that the parish defendants caused massive flood damage by violating their contractual and regulatory obligations to adopt and enforce flood control measures consistent with the parishes' participation in the NFIP. The government sought recovery in contract and implied contract. The United States also contended that the defendants were liable to the United States as subrogee under the policies of the property owners who had been insured and paid in full by the NFIP. The government further claimed that the defendants' action (or inaction) constituted a public nuisance under Louisiana law. However, as above mentioned, the government later abandoned any public nuisance claim.
The government sought recovery of the money paid to the insured property owners, an injunction for the specific performance of all obligations required from the parishes under the NFIP, and prospective injunctive relief requiring the parish and levy district defendants to implement and enforce the flood control measures in order to minimize future damage.
The parish defendants filed motions for summary judgment. On June 29, 1983, the district court entered an order granting the parishes' motions insofar as the government's complaint sought recovery in contract. The district court's order denied the United States' summary judgment motion for specific performance as a remedy for breach of the alleged contract between the parishes and the United States. The district court also refused to grant the government's summary judgment motion on the availability of subrogation. 1 Thus, over the objection of the United States, the district court entered partial final judgments dismissing the government's public nuisance claim as to all defendants and dismissing the portions of the United States contractual claims insofar as they sought compensation from the parishes.
On July 28, 1983, in response to the defendants' motions, the district court amended its order to reflect that the partial denial of the parishes' motions presented questions of law appropriate for interlocutory appeal under 28 U.S.C. Sec. 1292(b). Meanwhile, the government filed two new actions, No. 83-2077 and 83-2078, against Jefferson Parish and the Levy District defendants, and St. Bernard Parish and the Levy District defendants, to recover for flood insurance claims paid in 1982. In these suits the government did not name any non-governmental entities as defendants. These actions were subsequently consolidated with the prior actions.
On August 10, 1983, we denied the parish defendants' application for interlocutory appeal. The United States then moved for reversal of the partial final summary judgments which had been entered against it in appeals No. 83-3557 and 83-3760.
On February 1, 1984, upon a motion for reconsideration, we reversed our prior ruling and granted the defendants leave to pursue an interlocutory appeal. We simultaneously deferred consideration of the government's motion for summary reversal and requested a full briefing on the merits of the government's appeals from the partial dismissal of the public nuisance claims and the contractual claims insofar as they concerned recovery of the United States' payments under the insurance policies. All appeals were consolidated for briefing and argument.
III. The NFIP
The National Flood Insurance Act of 1968 was enacted by Title XIII of the Housing and Urban Development Act of 1968, Public Law 90-448, August 1, 1968, to provide previously unavailable flood insurance protection to property owners in flood prone areas. 2 42 U.S.C. Sec. 4001 et seq.
Dissatisfied with the lack of commitment being made to the program by the municipalities to which insurance was available, Congress added additional incentives for communities to participate in the NFIP. Congress' persuasive stick--used as an aid to the insufficient insurance carrot--was the Flood Disaster Protection Act of 1973. 3
To qualify for the sale of federally subsidized flood insurance, a community was required to adopt and submit as part of its application, flood plain management regulations. These regulations were designed to reduce or avoid future flood damages.
However, the 1968 Act required a risk study to be undertaken for each community before it could become eligible for the sale of flood insurance. Since this requirement resulted in a delay in providing insurance protection, Congress established an Emergency Flood Insurance Program to permit the early sale of insurance in flood prone communities. The emergency program did not affect the requirement that a community adopt adequate flood plain management regulations; it only permitted insurance to be sold before a study was conducted to determine actual risk premium rates for the particular community. The emergency program still required the charging of actual risk premium rates for all new construction, substantial improvements, and high limits of coverage on existing structures when a flood insurance rate map became effective.
To qualify for flood insurance, a community was required to apply for the entire area within its jurisdiction. 4 The program requires the community to designate an agency or official with responsibility, authority, and means to implement the specific requirements of the program and to make an annual report concerning the community's participation in the program. The regulations provide that a community is subject to suspension from the NFIP for...
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