McCormick

I.

Introduction

Thomas and Stacy McCormick (the McCormicks) appeal from a judgment on the pleadings entered in favor of Travelers Insurance Company (Travelers). Travelers insured the McCormicks against flood loss under a standard flood insurance policy issued as part of the National Flood Insurance Program (NFIP), a federally subsidized program which provides flood insurance at reasonable rates. The McCormicks sued Travelers for wrongfully denying them insurance coverage under the policy, alleging causes of action for breach of the insurance contract, bad faith and fraud. In granting Travelers judgment on the pleadings, the trial court found that under the National Flood Insurance Act (NFIA; 42 U.S.C. § 4001 et seq.), the state court did not have jurisdiction over any aspect of the McCormicks’ action.

In what is a matter of first impression for any California appellate court, we conclude the McCormicks’ action against Travelers must be adjudicated in federal court, based on a provision of the NFIA granting “original exclusive jurisdiction” to federal courts to hear claims arising out of NFIP flood insurance policies. ( 42 U.S.C. § 4072 .) Therefore, we…