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00-3473 Downey v. State Farm Fire & Casualty Co.

By: dmc-admin//September 24, 2001//

00-3473 Downey v. State Farm Fire & Casualty Co.

By: dmc-admin//September 24, 2001//

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“[W]hen the duties or rights of the United States are at stake under a federal program, that federal interest requires the application (and if necessary the creation) of federal law… If FEMA were the defendant in our case, we would have no doubt that federal law applied… FEMA runs a federal program, and because it bears the risk on all NFIP contracts, FEMA’s duties are at issue whenever an NFIP policy is interpreted. Replacing ‘FEMA’ with “State Farm” in the caption of the case changes nothing; a judgment against State Farm and a judgment against FEMA have identical effects: FEMA pays. And though we were concerned with the formal parties to this action when we interpreted sec. 4072, here we are concerned with the federal interest invoked by the dispute’s subject matter.”

“Downey contends that he bought protection from the government through a federal program – and here the government coffer is at risk. That is enough to justify the application of federal law to the dispute, which means that subject-matter jurisdiction arises under sec. 1331.”

Affirmed.

Appeal from the United States District Court for the Central District of Illinois, Mihm, J., Easterbrook, J.

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