5th Circuit: United States Not Immune From Liability For Katrina Flood Damage

5th Circuit: United States Not Immune From Liability For Katrina Flood Damage

NEW ORLEANS - (Mealey's) The Fifth Circuit U.S. Court of Appeals on March 2 affirmed a lower court's ruling that the United States is not immune from liability for certain plaintiffs' Hurricane Katrina flood damage under Section 702c of the Flood Control Act of 1928 and under the discretionary function exception (DFE) to liability under the Federal Tort Claims Act (FTCA) (In Re:  Katrina Canal Breaches Litigation, No. 10-30249 c/w Nos. 10-31054 and 11-30808, 5th Cir.; 2012 U.S. App. LEXIS 4372). 

(Opinion.  Document #51-120308-014Z.) 

The Army Corps of Engineers dredged the Mississippi River Gulf Outlet (MRGO) shipping channel, as well as levees alongside the channel and around New Orleans.   The Corps' alleged negligence in maintaining the MRGO purportedly caused levees to fail and aggravated the effects of Hurricane Katrina on New Orleans.

After Berthelot, et al. v. Boh Bros. Construction, et al. (C.A. No. 05-4182), a lawsuit seeking damages arising out of all levee breaches in the aftermath of Hurricane Katrina, was filed in the U.S. District Court for the Eastern District of Louisiana, numerous other complaints seeking damages as a result of the levee breaches were filed.  As a result, the court consolidated the filings under the caption In re:  Katrina Canal Breaches Consolidated Litigation.   

One of three groups of bellwether plaintiffs, known as the Armstrong plaintiffs, and Entergy New Orleans Inc., Entergy Louisiana L.L.C. and Hartford Steam Boiler Inspection and Insurance Co., which are collectively referred to as Entergy Plaintiffs, claimed that the two floodwall failures on the east side of the Inner Harbor Navigational Canal (IHNC) occurred because of the Corps' "extensive excavation and subsurface activity [at that area], thereby undermining the integrity of the eastern shoreline of the IHNC abutting the Lower Ninth Ward of Orleans Parish, and ultimately contributing to the flooding caused in those areas by Hurricane Katrina."  (Armstrong v. United States (No. 10-866 [E.D. La.]) 

The United States moved to dismiss, arguing that it is immune from liability for Hurricane Katrina flood damage under Section 702c of the Flood Control Act of 1928 and under the DFE to the FTCA.  Judge Stanwood R. Duval Jr. denied the motion on Feb. 11, 2011. 

On Aug. 12, the United States again moved to stay the Armstrong action against it pending the resolution of Robinson v. United States (No. 10-30249 [5th Cir.]).  Judge Duval denied the motion.  

Robinson, which sought flood damages against the United States, went to trial. The District Court found that neither the FCA nor the DFE to the FTCA protected the government from the lawsuit. 

The District Court concluded that three of the seven Robinson plaintiffs had proven the government's full liability and four did not.  

The United States successfully moved to dismiss the Anderson lawsuits, named for another group of bellwether plaintiffs. 

The United States appealed to the Fifth Circuit.  The losing Robinson plaintiffs and the plaintiffs in the Anderson lawsuits cross-appealed.  The United States sought a writ of mandamus ordering the District Court to stay trial until the Fifth Circuit issues an opinion in Robinson and the Anderson lawsuits.

The panel concluded that "the United States enjoys immunity under Section 702c of the FCA only where damages result from waters released by flood-control activity or negligence therein."

The panel found that the United States cannot claim Section 702c immunity for MRGO's role in breaching the Reach 2 levee, which resulted in the flooding of the St. Bernard polder. 

"The dredging of MRGO was not a flood-control activity, nor was MRGO so interconnected with the LPV [Lake Pontchartrain and Vicinity Hurricane Protection Plan] as to make it part of the LPV.  Therefore, the flood waters that destroyed the plaintiffs' property were not released by any flood-control activity or negligence therein," the panel said.

The panel determined, however, that because the waters that damaged the Anderson plaintiffs' property were purportedly released by negligence in flood-control activity, the Corps is immune under Section 702c of the FCA.

"Although the design and plan for those levees and canals may not have been prudent, they were ultimately approved by Congress.  And though the dredging of the 17th St. Canal may have been negligent, the canal was part of the LPV.  Because those canals were designed to prevent flooding either by creating drainage or by preventing storm surge with levees, and were fully incorporated in the LPV plan, their design and dredging are flood-control activities," the panel explained. 

The panel further found that the DFE is inapplicable to the Robinson plaintiffs' claims.

"The Robinson plaintiffs have mustered enough record evidence to demonstrate that the Corps's negligent decisions rested on applications of objective scientific principles and were not susceptible to policy considerations.  At points where it could have mattered, the Corps did not identify MRGO's ability to aggravate the effect of a major hurricane.  This is not a situation in which the Corps recognized a risk and chose not to mitigate it out of concern for some other public policy (e.g., navigation or commerce); it flatly failed to gauge the risk," the panel said. 

The panel conversely concluded that the DFE is applicable to the Anderson plaintiffs' claims because the Corps' action under the regulation satisfies both prongs of the Berkovitz-Gaubert test under Gaubert (499 U.S. at 322-23, 111 S.Ct. 1267) and Berkovitz by Berkovitz v. United States (486 U.S. 531, 536-39, 108 S.Ct. 1954, 100 L.Ed.2d 531 [1988]).  

The panel rejected the losing Robinson plaintiffs' cross-appeal of the District Court's ruling that the Corps is not responsible for some or all of the flooding that destroyed their homes.  

The panel also denied the government's petition for a writ of mandamus to stay proceedings in Armstrong pending the Fifth Circuit's disposition of Robinson.

"We affirm all the rulings on immunity, save for a minor reformulation of FCA immunity. Because we do not alter the scope of governmental immunity in any way likely to affect the Armstrong case, the government has no clear and indisputable right to issuance of the writ," the panel said.

Judge Jerry E. Smith wrote the opinion, which was joined by Judges Edward C. Prado and Jennifer Walker Elrod.  

Joseph M. Bruno of Bruno & Bruno in New Orleans; Jonathan Beauregard Andry of the Andry Law Firm in New Orleans; Joseph W. Cotchett, Philip L. Gregory and Joseph C. Wilson of Cotchett, Pitre & McCarthy in Burlingame, Calif.; Walter Clayton Dumas of the Dumas Law Firm in Baton Rouge, La.; Norval Francis Elliot III of Lake Charles, La.; Calvin Clifford Fayard of Fayard & Honeycutt in Denham Springs, La.; Nina D. Froeschle, Pierce O'Donnell and Andrew Patrick Owen of Los Angeles; Thomas V. Girardi of Girardi & Keese in Los Angeles; Lewis Scott Joanen of New Orleans; Joseph J. McKernan of the McKernan Law Firm in Baton Rouge; Henry Clay Mitchell Jr.  and Matthew D. Schultz of Levin, Papantonio, Thomas, Mitchell, Echsner & Proctor in Pensacola, Fla.; Michael Carter Palmintier of deGravelles, Palmintier, Holthaus & Fruge in Baton Rouge; Drew A. Ranier of Ranier, Gayle & Elliot in Lake Charles; Brent M. Rosenthal of Rosenthal Pennington in Dallas; James Parkerson Roy, Elwood Clement Stevens Jr. and Bob F. Wright of Domengeaux, Wright, Roy & Edwards in Lafayette; Sherri Ann Saucer of Baron & Budd in Dallas, Frank Jacob D'Amico Jr. of New Orleans; John Bettes Dunlap III of Dunlap Fiore in Baton Rouge; Richard Michael Exnicios of New Orleans;

Gerald Edward Meunier of Gainsburgh, Benjamin, David,  Meunier & Warshauer in New Orleans; Pierce O'Donnell and Andrew Patrick Owen of Los Angeles; Camilo Kossy Salas III of Salas & Company in New Orleans; Sherri Ann Saucer of Baron & Budd in Dallas; and David S. Scalia of the Scalia Law Firm in New Orleans represent the plaintiffs in Robinson

Bruno of Bruno & Bruno, Owen of Los Angeles, Roy of Domengeaux, Wright, Roy & Edwards and Saucer of Baron & Budd represent the Armstrong plaintiffs.

Mark Bernard Stern, Alisa Beth Klein, Daniel Joseph Lenerz, Abby Christine Wright, Lindsey E. Powell and Robin D. Smith of the U.S. Department of Justice, Civil Division in Washington, D.C., represent the United States.

James Bryan Mullaly of the City Attorney's Office for the City of New Orleans in New Orleans filed an amicus curiae brief on behalf of the City of New Orleans.

Michael K. Kellogg, Scott Harris Angstreich and Andrew S. Oldham of Kellogg Huber Hansen in Washington filed an amicus curiae brief on behalf of AT&T Entities.

James M. Garner, John Thomas Balhoff II and Ashley Gremillion Coker of Sher Garner Cahill Richter Klein & Hilbert in New Orleans and James David Caldwell of the Office of the Attorney General for the State of Louisiana in Baton Rouge filed an amicus curiae brief on behalf of the State of Louisiana. 

Garner, Balhoff and Coker and Richard Alvin Tonry of Tonry & Ginart in Chalmette, La., filed an amicus curiae brief on behalf of the Parish of St Bernard, La.

Garner, Balhoff and Coker filed an amicus curiae brief on behalf of  Rain CII Carbon L.L.C., Universal Health Services Inc., Amy Huey and Virginia Burdette, Chapter 7 trustees of the estate of Quintessa Huey and Caryn L. Fong, Certain Members of the MRGO Must Go Coalition, James Wilkins, Coalition to Restore Coastal Louisiana, Holy Cross Neighborhood Association, Lower Ninth Ward Center for Sustainable Engagement and Development and MQVN Community Development Corp. 

Ewell Elton Eagan Jr., Nina Wessel English and Brian Lee Guillot of Gordon, Arata, McCollam, Duplantis & Eagan in New Orleans, and Marcus Van Brown and Wendy Hickok Robinson of Entergy Services Inc. Legal Services in New Orleans filed an amicus curiae brief on behalf of Entergy Louisiana  L.L.C. and Entergy New Orleans Inc.

Elisa Tara Gilbert and Brendan Regis O'Brien of the Gilbert Firm in New York filed an amicus curiae brief on behalf of Hartford Steam Boiler Inspection & Insurance Co. 

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