Katrina Blame Case Could Bring Billions in Lawsuits

A federal judge in New Orleans awarded five victims of Hurricane Katrina almost $750,000 last week, ruling that the Army Corps of Engineers helped cause the flooding of their homes and businesses by carelessly maintaining a shipping channel to the Gulf of Mexico.

VIDEO: Army Corps of Engineers Faulted During Hurricane
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"It was like getting a camel through the eye of a needle but we did it," said Pierce O'Donnell, the Los Angeles attorney who led the case for the plaintiffs.

The decision was the first to break through the legal immunity that has shielded the Corps from liability for flood damage in the deadly storm's aftermath. Although U.S. District Court Judge Stanwood Duval limited the award to residents of St. Bernard Parish and the Crescent City's Lower Ninth Ward, his opinion's often harsh criticism could expose the Corps to additional lawsuits by thousands of homeowners seeking potentially billions of dollars for their lost and ruined property.

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"Clearly, in this instance, the Corps shortchanged the inhabitants of New Orleans and the environs by its myopic approach to the maintenance and operation of the [Mississippi River Gulf Outlet]," Duval wrote. "It simply chose to ignore the effects of the channel."

O'Donnell places the blame directly on the Army Corps of Engineers.

"The Army Corp wiped out 35th largest city in America from gross negligence," he told ABC News. "[They were] arrogant. They didn't listen to warnings internally from their own people… The Army Corps of Engineers is an oxymoron. There are no more engineers. There are a bunch of paper pushers. They out source all of their work to private contractors."

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In a written statement, the lawyers for the hurricane victims who filed the suit called the decision "one step on the long road to recovery for the people of New Orleans. It has been proven in a court of law that the drowning of New Orleans was not a natural disaster, but a preventable man-made travesty."

Although the government may appeal the ruling, Justice Department lawyers said only that they were "currently reviewing Judge Duval's decision. We have made no decision as to what the government's next step will be in this matter."

One step that might short circuit an appeal, and that some experts see as inevitable, is the creation by Congress of a fund to compensate Katrina victims.

"Things of this magnitude tend to provoke dramatic solutions that are more than just case-by-case appeals," said Professor Oliver Houck of Tulane Law School, who mentioned the congressionally created fund to compensate victims of the 9/11 attacks. "This was our 9/11. There's even more of a rationale here, because the government was largely responsible."

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O'Donnell said that last Wednesday's ruling is only a first step. "We won't rest until we get just compensation for victims -- residents and businesses -- restored wetlands and rebuild infrastructure," he said.

Government Loses Immunity Cloak on Hurricane Katrina?

Last week's ruling followed Judge Duval's similarly surprising decision last spring to let the suit go forward. Over the more than four years since Katrina swept through New Orleans, dozens of lawsuits blaming the Corps for broken levees and other failed hurricane defenses have foundered on the government's defense of immunity.

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