The Lawletter Vol 37 No 8
The litigation involving liability resulting from damage caused by Hurricane Katrina to New Orleans and its environs in 2005 has taken an unexpected turn. More than 400 plaintiffs sued in federal court to recover for Katrina‑related damages, many naming the federal Government as a defendant. Seven plaintiffs from that number went to trial. The court found that neither the Flood Control Act of 1928 ("FCA"), 33 U.S.C. § 702, nor the discretionary‑function exception ("DFE") to the Federal Tort Claims Act ("FTCA"), 28 U.S.C. § 2680(a), immunized the Government from suit. In re Katrina Canal Breaches Consol. Litig., 533 F. Supp. 2d 615 (E.D. La. 2008). After 19 days of trial, the court found that three plaintiffs had proven the Government's full liability and four had not. Another group of plaintiffs had their cases dismissed on the Government's motion, the court having found both immunities applicable. Still a different group are now preparing for trial of their own case against the Government.
On appeal, the judgment of the district court was affirmed. In re Katrina Canal Breaches Litig., 673 F.3d 381 (5th Cir. 2012). On panel reconsideration, however, the court withdrew its earlier opinion, reversed the district court, and found for the Government on all claims. In re Katrina Canal Breaches Litig., Nos. 10-30249, 10-31054, 11-30808, 2012 WL 4343775 (5th Cir. Sept. 24, 2012). The theory of the plaintiffs was that their injuries had been caused by the failure of the navigation system known as the Mississippi River Gulf Outlet ("MRGO") due to negligent design and maintenance by the Army Corps of Engineers. Several studies commissioned by the Corps had recommended various design enhancements to the MRGO, which facilitates maritime traffic in and out of the Port of New Orleans. The Corps refused to implement these enhancements as not being cost-effective and because it insisted on local participation in the cost of those enhancements. Because the enhancements were not implemented, wave wash from passing shipping continued to erode the banks of the structure to the extent that the banks failed to prevent the inundation of parts of the New Orleans region as a consequence of Katrina's storm surge.
The court reaffirmed its earlier conclusion that the Government could not claim immunity under the FCA. The activities of the Corps with respect to the MRGO in failing to implement foreshore protection did not have as their purpose flood control. Hence its conduct in that respect was outside the immunity afforded by the FCA. The court did conclude, however, that the decision by the Corps not to implement enhancements to the MRGO structure that, if implemented, might have prevented or at least mitigated the damage at least to some degree was animated by policy considerations. Thus, the Government did qualify to claim DFE immunity. The Corps had considered various alternative strategies, including whether to armor the foreshore of the MRGO. The Corps had also issued permits for dredging that could have caused the 17th Street Canal to fail. Both actions involved discretionary decisions in the public interest. The court concluded that these acts, therefore, were squarely within the immunity afforded the Government under the DFE.
For a panel of a court of appeals to reverse itself in the absence of an intervening change in the law is rare. It is even less common for an appellate panel to have changed its mind on a fundamental issue that determined the outcome of the earlier case. In this case, the panel of the Fifth Circuit changed its mind regarding how the DFE applied under the facts of the case before it. The losing plaintiffs' sole recourse at this point would appear to be a petition for a writ of certiorari to the Supreme Court, which almost certainly is in prospect.