Spector v. USAA Casualty Insurance Company
2:18-cv-08806
E.D. La.Aug 22, 2019Background
- Plaintiff Matthew Spector sued USAA Casualty Insurance Co., USAA General Indemnity Co. (USAA GIC), the City of New Orleans, a contractor, and the Sewerage & Water Board for flood damage to his home from August 2017 and related city construction.
- Petition filed in Orleans Parish Civil District Court included a jury demand.
- USAA GIC removed to federal court asserting federal-question jurisdiction under the National Flood Insurance Act (NFIP).
- USAA GIC moved to strike the jury demand, arguing no Seventh Amendment jury right for claims against WYO (Write-Your-Own) NFIP carriers because recovery would be paid from the U.S. Treasury; the motion was unopposed.
- The Court scheduled a jury trial but considered the motion and concluded WYO carriers are fiscal agents of the United States and suits against them are functionally suits against FEMA, so jury trials are not available for NFIP claims.
- The Court granted USAA GIC’s motion: jury will decide only non-flood claims; flood-claim jury demand was struck.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Seventh Amendment jury right applies to claims against a WYO NFIP carrier | Spector demanded a jury for his claims against USAA GIC | USAA GIC: no jury right because WYO payouts are funded by U.S. Treasury and NFIP precludes jury trials | Court: jury demand struck for flood claims; WYO is a fiscal agent and suit is functionally against the U.S., so no Seventh Amendment right for NFIP claims |
Key Cases Cited
- Lehman v. Nakshian, 453 U.S. 156 (U.S. 1981) (no jury right to recover funds from the U.S. Treasury)
- Van Holt v. Liberty Mut. Fire Ins. Co., 163 F.3d 161 (3d Cir. 1998) (WYO carriers treated as agents under NFIP)
- Gowland v. Aetna, 143 F.3d 951 (5th Cir. 1998) (judgment against WYO carrier is a charge on the public treasury)
- Ekhlassi v. National Lloyds Ins. Co., 926 F.3d 130 (5th Cir. 2019) (suit against a WYO carrier is functionally equivalent to a suit against FEMA)
- In re Estate of Lee, 812 F.2d 253 (5th Cir. 1986) (discussing limits on jury rights involving government funds)