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Death of a Flood Insurance Salesman?

As the central character of Arthur Miller’s 1949 play, Death of a Salesman, Willy Loman charts a path of delusional self-destruction that ends in his own demise. Like Willy and his doomed flirtation with insanity, the National Flood Insurance Program (NFIP) is now locked in a precarious dance with the Endangered Species Act (ESA) and the two now appear headed for darker, murkier waters.

Following up on its 2003 lawsuit against the Federal Emergency Management Agency (FEMA), the National Wildlife Federation (NWF) has filed a motion for a preliminary injunction to halt the issuance of flood insurance in the Puget Sound region for all new developments and substantial redevelopment within the 100-year floodplain. The motion asserts that FEMA has failed to appropriately implement the reasonable and prudent alternatives (RPAs) contained in a 2008 National Marine Fisheries Service biological opinion (BiOp). The BiOp said the seven RPAs were necessary to avoid harmful impacts to endangered species and their habitat in the Puget Sound region.

While the motion lists myriad complaints regarding FEMA’s response to the BiOp and implementation of the RPAs, here are a few highlights.

  1. NWF claims that FEMA passed the buck by shifting implementation of the BiOp onto communities that participate in the NFIP and that FEMA lacks capacity to appropriately oversee the effective enforcement of the new floodplain regulations.
  2. NWF says FEMA has failed to enforce the September 22, 2011 deadline for compliance with the BiOp and that most communities in the region have elected an option that allows permit-by-permit ESA review; these two circumstances result in uncertainty about whether the RPAs will be enforced consistently and adequately.
  3. NWF claims that requirements under the ESA supersede vesting under local land use regulations and that, as a consequence, floodplain development approved prior to the requirement for BiOp compliance should not be allowed to proceed without reevaluation.

If the motion is successful, this motion could result in the suspension of floodplain insurance issuance in the Puget Sound region for the foreseeable future. Thus, any projects that rely on floodplain insurance for financing will be left in limbo until FEMA can address remedies provided through the legal process. Until then, the flood insurance salesman may well need to find other, more attractive wares to hawk.