State Law Fraud Claims in Flood Insurance Action Can Stay in Federal Court, Judge Rules

NEW YORK — Fraud allegations brought against Selective Insurance Co. for allegedly representing that it was selling flood insurance as an insurance company rather than an agent of the federal government belong in federal court, according to a recent ruling by a New York judge.

U.S. District Judge Leonard D. Wexler of the Eastern District of New York said in the decision that because a federal agency is presumed to be paying litigation costs incurred by Selective as a result of being named in the case, federal funds are implicated and jurisdiction is proper in federal court.

The ruling comes …