Michael Chaney, Mississippi insurance commissioner, says he remains optimistic that the court will consider the potentially devastating impact of implementation of B-W on individual homeowners as well as the nascent recovery of real-estate markets in making a decision.

In comments on the Senate floor last Thursday about legislation that some in Congress say would junk the 2012 law that mandated that National Flood Insurance Program customers be charged actuarial rates, Sen. Mary Landrieu, D-La., said, "We better wake up and realize the economic impact this is going to have on the entire country if this is not fixed. This is not about millionaires on a beach.

"This is about the middle class and working hard where you need to live to work," Landrieu said, citing the seafood, energy and shipping industries. 

Landrieu made her comments in disclosing that the Senate has agreed to consider legislation delaying the rate hikes early next year.

Pace notes in her paper that "this litigation is only one piece of a multifaceted effort to reform the 'reforms'" imposed by the law, the Biggert-Waters Act. She acknowledges that, "Congressional intervention may be the best long-term solution." 

The Federal Emergency Management Agency, which administers the NFIP, contends that the states lack standing to sue because the legislation is a direct federal action.

Pace says, "FEMA has argued that MID does not meet Article III standing requirements, in its individual capacity or on behalf of its citizens under parens patriae, because the state has neither established the requisite injury in fact nor shown that its claims are redressable by the court in the event of a favorable ruling. 

"Under parens patriae, the state is acting in its quasi-sovereign capacity and suing on behalf of its citizens as a whole."

FEMA also contends in a brief that the suit is fundamentally flawed because Mississippi is wrong in stating that the affordability report must be sent to Congress before the rates are implemented, stating the two issues are fundamentally unrelated.

Pace says for MID to succeed, it must show that FEMA "failed to take a discrete agency action that it was required to take."

She says this standard prevents courts from reviewing broad programmatic attacks against agency action and limits the court's ability to mandate a particular type of action, leaving the means of accomplishing the act to the agency's discretion.

In this case, Pace says, the affordability study required by a provision of B-W specifies that FEMA will contract with the National Academy of Sciences (NAS) to conduct the study for a maximum cost of $750,000. 

NAS was unable to comply with the time and funding constraints; it proposed a two-phase approach, FEMA said in its brief because sufficient funds to pay for the study were not appropriated.

Pace said FEMA anticipates phase one will be complete in March 2015. "The state parties argue that FEMA's advancement of the rate increases without the full benefit of the affordability analysis was an arbitrary and capricious decision," Pace says.

Pace says that, through its briefs, Mississippi has responded with a detailed assertion of standing both in its own capacity and on behalf of the citizens of Mississippi under the doctrine of parens patriae.

In particular, Pace says Mississippi asserts the following grounds for standing: (1) FEMA failed to complete the studies, (2) FEMA failed to consult with MID before instituting rate changes, (3) FEMA's actions impacted MID's zone of interest, i.e. the commissioner's rights to consultation, (4) impacts on Mississippi policyholders violated MID's quasi-sovereign interest under parens patriae, and (5) FEMA's violations of the federal statute impaired MID's quasi-sovereign interest under parens patriae. 

As to parens patriae standing, MID strived to clarify in its briefs that it is not seeking to "protect its citizens from the operation of a federal statute," but rather, is seeking to enhance the operation of a federal program by compelling FEMA to enforce B-W, Pace says.