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.

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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.

The federal Flood Control Act of 1928 protects the Corps from liability for defective flood-control projects. Other federal laws say the government can't be sued for acting with reasonable care or making a judgment call based on policy.

But Duval ruled in March that the shipping channel -- nicknamed MRGO -- was a navigation canal rather than a flood-control project, and so outside the protection of the Flood Control Act.

Last week, after a 19-day trial, he found that the Corps had not acted with due care when it botched operation and maintenance of MRGO, and it wasn't making a judgment call when it ignored the safety of New Orleans residents and failed to tell Congress about the channel's environmental and safety problems.

When MRGO was completed in 1968, it cut narrowly through 76 miles of swamps and cypress forest to ease shipping between the Gulf of Mexico and New Orleans. But over the next several decades, erosion more than doubled the channel's width.

The Corps argued that much of the erosion resulted from natural forces and, in any case, was not responsible for the destructive force of Katrina, a storm of such magnitude that it would have inundated the New Orleans area with floodwaters no matter what.

But Duval disagreed sharply, ruling that the Corps' efforts to maintain and operate MRGO made things worse.

The Corps knew that the channel "would not be a static, unchanging waterway," he said, but nonetheless failed to strengthen MRGO's banks with piles of rock, dredged its depths to the extent that loose soil slid from its shores and dumped dredged muck on delicate wetlands that died and ceased to act as a barrier from salty Gulf waters.

The "Corps clearly took the position that its primary mission was to keep the shipping channel open to deep draft traffic regardless of the consequences," the judge wrote.

Judge: Army Corps' 'Shortsightedness' Had Dire 'Consequences'

The consequences, according to Duval, were devastating: When Katrina hit on the morning of Aug. 29, 2005, MRGO's yawning width and the absence of protective wetlands strengthened the hurricane's winds and the surge of water from the Gulf. The levees along the channel crumbled in at least two spots and were too low to block the towering waves that rushed unobstructed towards New Orleans. Water poured from MRGO into the Lower Ninth Ward and St. Bernard Parish just southeast of New Orleans and over the levees protecting East New Orleans.

"It is the court's opinion," said Duval, "that the negligence of the Corps, in this instance by failing to maintain [MRGO] properly, was not policy, but insouciance, myopia and shortsightedness."

That negligence, the judge continued, was directly responsible for the damages suffered by five of the six area residents who filed the lawsuit. He awarded $100,000 to Lower Ninth Ward residents Lucille and Anthony Franz for the loss of their home's contents.

He also awarded $317,000 to Tanya Smith and $134.665 to Kent Lattimore for damage to their homes and furnishings and for living expenses and inconvenience, and $168,033.25 to Lattimore & Associates for damage to its office and contents, all located in St. Bernard Parish.

Duval denied the claim of a sixth plaintiff, Norman Robinson, because the flooding that damaged his home was caused by the absence of a higher barrier along MRGO's border with East New Orleans. The channel's original design did not include such a barrier, and so its absence was not the result of any negligence by the Corps in maintaining and operating MRGO, the judge ruled.