Slay’s argued in response that such a finding would be unjust because the SFIP does not provide any remedy at all for non-policyholders. But the court again agreed with the defendants, finding that Slay’s claim was preempted because NFIP proceeds were at the core of the suit and City Line, the policyholder, had a remedy available to it under the NFIA’s remedial provision in 42 U.S.C. § 4072 if it believed that it had been aggrieved by Wright National’s partial or complete denials of the subject claims. The court set forth several grounds for its preemption finding, including: (1) it would be patently inconsistent with the federal government’s goal of promoting uniformity to disallow a wide range of tort and federal common law claims arising out of claims handling activities by WYO carriers, only to permit a civil RICO claim to proceed on the same underlying facts, (2) permitting duplicative flood loss claims would have a harmful effect on public finances because the NFIP is a federally subsidized program, (3) the preemptive effect of the NFIP is not limited to state law claims, and (4) civil RICO claims are precluded where the challenged conduct is already covered by a more comprehensive and specialized federal statute.

Discussing the interplay between the Proof of Loss deadline and the statute of limitations to bring suit, the memorandum explained that FEMA established the 60-day Proof of Loss deadline in its regulations for the SFIP, and therefore the agency has the authority to grant waivers and extend the deadlines. However, when it enacted the National Flood Insurance Act of 1968, Congress established the one-year statute of limitations for an NFIP policyholder to bring a lawsuit after denial or disallowance or the partial denial or disallowance of a claim, under 42 U.S.C. § 4072. The statute of limitations was then incorporated into the SFIP by FEMA in its regulations.

On November 9, 2012, FEMA extended the deadline for 1 year. FEMA extended it again October 1, 2013 creating a new deadline of April 28, 2014.Given these extensions, FEMA sought to clarify the difference between the proof of loss extensions and the time to sue over a coverage dispute. In a November 21, 2013 memo, James A. Sadler, Director of Claims of the National Flood Insurance Program, noted that the statute of limitations to sue on flood insurance claims is 1 year pursuant to 42 U.S.C. § 4072. While FEMA has the authority to extend the proof of loss deadline, see 44 C.F.R. § 61.13(d) and 44 C.F.R. § 61 Appendices A(1) and A(2), Section VII(D), and Appendix A(3), Section VIII(D), it does not have the authority to extend the statute of limitations in the event of a coverage dispute.