Army Corps not liable for Katrina damage, appeals panel finds

New Orleans residents were dealt a setback Monday when a federal appeals panel, upending its own earlier decision, ruled that the US Army Corps of Engineers cannot be sued for damages stemming from losses sustained after hurricane Katrina.

Five hurricane Katrina survivors seeking government compensation for lost property and livelihoods were dealt a setback this week, as a federal appeals panel absolved the US Army Corps of Engineers from liability for damages stemming from failure of the flood-control system that protects New Orleans.

The panel's decision Monday came as a surprise, in effect upending its previous finding in March that the Army Corps was liable for some damages. The Army Corps has primary responsibility for building and maintaining the network of levees and flood-control mechanisms surrounding New Orleans, and plaintiffs claim that the floodwaters that inundated most of New Orleans in August 2005 – killing nearly 2,000 people, displacing half the population, and causing more than $81 billion in damage – were not the result of a natural disaster but rather of failure by the corps to supply adequate protection.

Previously, a lower court had blasted the Army Corps for failing to maintain the flood-protection system. The five residents suing the corps – and about 500,000 other claimants in line behind them – say they are owed damages because of systemic engineering, design, and mechanical failures over a 40-year period.

But the three-judge panel of the US FIfth Circuit Court of Appeals said Monday that the corps cannot be subject to liability claims due to a provision in federal tort law called the discretionary function exception. The exception states that the US government cannot be sued for actions that an agency or agency employee makes or fails to make. In its ruling, the panel said the exception “completely insulates the government from liability” and is intended to keep courts from reversing government decisions when they are “grounded in social, economic, and political policy.”

The “actual reasons for the delay (in armoring the banks and levee) are varied and sometimes unknown, but there can be little dispute that the [Army corps'] decisions here were susceptible to policy consideration,” the ruling stated. Therefore, the corps is immune from liability under tort law, the panel found.

For advocates of the Katrina victims, the ruling does not invalidate the narrative that the corps is ultimately responsible for the breaches and that Katrina was not solely a natural disaster.

“This decision was not about the science, it was not about whether the Corps of Engineers was negligent, it was only about the law and whether the corps was immune from financial consequence,” says Sandy Rosenthal, a founder of Levees.org, an advocacy organization in New Orleans tasked with educating citizens about their rights and options after Katrina.

Survivors seeking damages from the federal government are feeling “enormous disappointment” in Monday's decision, says Ms. Rosenthal. “They lost a lot more than just items; many lost family members. There is the feeling of absolute nausea, of feeling punched in the stomach.” 

Several post-Katrina studies have concluded that engineering, design, and mechanical problems were largely to blame for the two main breach sites.

A November 2005 report jointly published by the University of California at Berkeley and the American Society of Civil Engineers found that the levees failed as a result of several factors, including the instability of certain floodwalls, differences in height between adjacent wall sections, and “considerable erosional distress” in transitional sections between earthen and concrete levees.

Another report commissioned by the Louisiana Department of Transportation and Development, published in December 2006, concluded that “Katrina was largely a man-made catastrophe” and criticized the corps for various shortcomings. "There was inadequate recognition of the primary contributors to the likelihoods and consequences of catastrophic flooding," the report stated. "Sufficient defensive measures to counteract and mitigate these uncertainties were not used.”

The corps, however, disputes some of those claims, saying that a federal court decision in January 2008 exempted the US government of all liability for the disaster. Had the case proceeded, the corps also said it was prepared to offer expert testimony that would contradict some conclusions of those reports.

The 2008 court decision cited a 1928 law that gives the corps immunity for damages that result from a flood-protection project. However, the ruling of immunity did not cover some damage claims pertaining to the Mississippi River-Gulf Outlet, a corps-built and corps-maintained navigation channel known as MR-GO located on the city’s east side. Litigation stemming from flooding that occurred when water surged through MR-GO was the subject of Monday's decision.

This same three-judge panel initially ruled in March that the government was liable for some damages, as did the lower court ruling by Judge Stanwood Duval Jr. in November 2009, which had awarded $720,000 to the residents. After the corps appealed to the full Fifth Circuit Court, the panel withdrew its decision and ruled in the agency’s favor.

Plaintiffs are expected to appeal the ruling to the full Fifth Circuit court, and both sides have said they intend to fight this case all the way to the US Supreme Court.