Judge rules feds must pay for Katrina flood damage

By Annie Snider | 05/04/2015 01:03 PM EDT

A federal judge ruled Friday that the Army Corps of Engineers’ construction and management of the Mississippi River-Gulf Outlet (MR-GO) channel had created a "ticking time bomb" for the New Orleans area and that the federal government must pay for some of the flood damage from Hurricane Katrina and subsequent storms.

In a 74-page ruling, U.S. Court of Federal Claims Judge Susan Braden said the storm damage qualifies as a "temporary taking" under the Fifth Amendment — a ruling that opens the door for the first time to federal liability when environmental changes make an Army Corps project more vulnerable.

The fact that the channel played a role in Hurricane Katrina is generally agreed upon. Multiple government reports have found that the 76-mile navigation channel, which was maintained by the Army Corps, had eroded to more than three times its authorized width by 2005, destroying wetlands that shielded nearby communities from storms and creating a funnel that directed storm surge from Katrina to central New Orleans.


But efforts to hold the government liable for damages have failed until now. A 2009 decision by U.S. District Judge Stanwood Duval Jr. in New Orleans eviscerated the corps’ management of the MR-GO, blaming the agency for "insouciance, myopia and shortsightedness." But that ruling was overturned by the 5th U.S. Circuit Court of Appeals, which held that the corps is immune to claims related to the failure of flood control projects.

A takings claim is different, though, because it is based on the U.S. Constitution rather than federal law.

The 2012 Supreme Court ruling in Arkansas Game and Fish Commission v. United States established that even temporary flooding caused by government actions can give rise to a takings claim, although the court said each case would have to be reviewed individually.

In her ruling Friday, Braden said that in the case of the MR-GO, there was little doubt that the corps should have foreseen the consequences of its actions.

"Certainly by 2004, the Army Corps no longer had any choice but to recognize that a hurricane inevitably would provide the meteorological conditions to trigger the ticking time bomb created by a substantially expanded and eroded MR-GO and the resulting destruction of wetlands that had shielded the St. Bernard Polder for centuries," she wrote.

Braden praised corps leaders for being "open, transparent, and helpful in educating the court to understand what happened," but was critical of the Department of Justice, which she said "pursued a litigation strategy of contesting each and every issue."

It is unclear how much the federal government might owe the St. Bernard Parish government and the home and business owners who could eventually be covered by the ruling. Braden scheduled a conference with all parties for Wednesday to see whether they will agree to have damages assessed by a mediator.

"We’re reviewing the ruling," Department of Justice spokesman Wyn Hornbuckle said by email this morning.

Braden discouraged further litigation over the issue, saying it "is not in the interest of the Army Corps and will not serve the interests of justice."

"It is time for this final chapter of the MR-GO story to come to an end," she wrote in her opinion.

The MR-GO was permanently closed in 2009, and Congress authorized a $3 billion plan to restore wetlands and cypress forests that were destroyed by the channel. But the state of Louisiana has been stuck in an impasse with the corps over whether the cost of that restoration project should be covered entirely by the federal government, or whether the state is on the hook for a 35 percent cost share. Louisiana filed a lawsuit over that issue last October (Greenwire, Oct. 29, 2014).

But regardless of where the case goes from here, legal experts say the ruling is a significant one.

Whereas the Arkansas Game and Fish case dealt with a corps management decision that caused property damage, the current case extends takings claims to instances where the corps failed to respond to changing circumstances that made its project more vulnerable to natural disasters, said Mark Davis, director of the Institute on Water Resources Law and Policy at Tulane University Law School.

The MR-GO was authorized in 1956, well before passage of the National Environmental Policy Act, requiring the federal government to consider the ecological consequences of a project.

"The court is taking note of how the federal government learned more and more about risk and did nothing to minimize that risk, and when the risk appeared, then it’s the property owners that live with the damage," Davis said. "The court seems to be saying that responsibility, armed with new knowledge, creates dynamic liability."

Loyola University New Orleans College of Law professor Robert Verchick said the ruling could have significant implications.

"Make no mistake: we have seen a significant breach — a breach in the immunity that public water-management projects have long enjoyed against allegations of abuse and malfeasance," he wrote in a blog post for the Center for Progressive Reform.

"In an era of climate-change induced storms and floods, this is a very big deal, no matter how this particular claim gets resolved," he wrote.