Ali Ekhlassi v. National Lloyds Insurance Co., 926 F.3d 130

Ekhlassi owned a flood-insured house under a Standard Flood Insurance Policy issued by National Lloyds (a WYO carrier) and suffered flood damage on May 25, 2015.
FEMA issued a notice on May 28, 2015, extending the proof-of-loss filing deadline by 180 days for affected Texas/Oklahoma claims (total 240 days), but expressly did not waive other policy provisions.
Lloyds sent a claim letter on October 6, 2015, offering $3,768.25 and warning of the policy’s one-year suit limitation; it later acknowledged a December proof of loss and sent a January 11, 2016 letter denying any payment beyond $3,768.25.
Ekhlassi filed suit in Texas state court on January 11, 2017 (one year after the January denial), and the case was removed to federal court on April 24, 2017.
District court granted summary judgment for Lloyds, concluding Ekhlassi’s suit was time-barred; on appeal the Fifth Circuit considered whether 42 U.S.C. § 4072 (original exclusive federal jurisdiction and one-year limitations period) applies to suits against WYO carriers and whether the filing was untimely.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does 42 U.S.C. § 4072 apply to suits against WYO carriers?	§4072 refers only to actions "against the Administrator," so it does not apply to WYO carriers.	§4072 should be read in context of the NFIP scheme; WYO carriers are fiscal agents and suits against them are functionally suits against FEMA.	§4072 applies to suits against WYO carriers.
Does 28 U.S.C. § 1331 preclude application of §4072?	§1331 federal-question jurisdiction governs, so §4072 should not displace it.	§1331’s grant of jurisdiction does not negate a specific statutory provision that confers original exclusive federal jurisdiction and a one-year limit.	§1331 does not preclude application of §4072.
Was Ekhlassi’s claim timely where it was filed in state court within one year of denial but removed later?	Filing in state court within one year satisfies the limitations period.	§4072 requires that the action be instituted in federal district court within one year; filing in state court does not suffice.	Claim is time-barred because suit was not filed in (or removed to) federal court within one year of denial.
Was the statute-of-limitations defense waived by Lloyds?	Lloyds did not explicitly raise the federal-court filing point earlier, so it was waived.	The court may consider the pure legal issue despite waiver; parties had opportunity to brief it.	Court exercised the exception to waiver for a pure legal question and considered §4072.

Campo v. Allstate Ins. Co., 562 F.3d 751 (5th Cir. 2009) (describing WYO program and required policy language)
Borden v. Allstate Ins. Co., 589 F.3d 168 (5th Cir. 2009) (federal-question jurisdiction exists for SFIP breach claims)
Ferraro v. Liberty Mut. Fire Ins. Co., 796 F.3d 529 (5th Cir. 2015) (applied §4072 jurisdiction to WYO carrier suit)
Van Holt v. Liberty Mut. Fire Ins. Co., 163 F.3d 161 (3d Cir. 1998) (WYO companies are fiscal agents; suit against them is functionally a suit against FEMA)
Palmieri v. Allstate Ins. Co., 445 F.3d 179 (2d Cir. 2006) (statutory framework supports federal-court exclusivity for NFIP claims)
Downey v. State Farm Fire & Cas. Co., 266 F.3d 675 (7th Cir. 2001) (refused to extend §4072 textually limited to the Administrator to WYO carriers)
Shuford v. Fidelity Nat'l Prop. & Cas. Ins. Co., 508 F.3d 1337 (11th Cir. 2007) (strict compliance with SFIP provisions required because payments are from federal treasury)
Spence v. Omaha Indem. Ins., 996 F.2d 793 (5th Cir. 1993) (Congress intended one-year limitations on flood insurance actions)