Water Log 29.4, February, 2010

District Court Finds Liability in MRGO Lawsuit

In Re Katrina Canal Breaches Consolidated Litigation; Pertains to: Robinson C.A. No. 06-2268, 647 F. Supp. 2d 644 (E.D. La. 2009).

Shawn Lowrey, J.D.1

In November, a Louisiana district court found in favor of six plaintiffs seeking damages from the U.S. Army Corps of Engineers (Corps) resulting from the Corps  maintenance and operation of the Mississippi River Gulf Outlet (MRGO).2 The court ruled that the United States was liable under the Federal Tort Claims Act (FTCA) for damages incurred in the aftermath of Hurricane Katrina due to failure to properly maintain the MRGO. While punitive damages under Louisiana law were declined, the court granted actual damages to the six property owners for losses caused by the flooding.

Background
Central to this litigation are two U.S. Army Corps of Engineers projects which have substantially impacted the New Orleans metro area. The first project, later known as the MRGO, began in 1943 amid World War II concerns over shipping during future hostilities and continued due to financial interest by the maritime industry. The MRGO created a shortcut from New Orleans to the Gulf of Mexico. A section of the channel known as Reach 1 ran from the Inner Harbor Navigational Canal eastward along the Gulf Intracoastal Waterway to a point near Michaud. There the route struck a southeasterly course along the south shore of Lake Borgne across Chandeleur Sound to the Gulf of Mexico. This section of the channel is Reach 2. As Reach 2 moved southward, it cut through Bayou Bienvenue at the channel’s more northerly end and Bayou La Loutre at its more southerly end. The channel was to be 36 feet deep and 500 feet wide, increasing at the Gulf of Mexico to 38 feet deep and 600 feet wide. Over 60 miles in length, the MRGO drastically lowered shipping time from the Gulf of Mexico to the Mississippi River.3
      The second project was the Lake Pontchartrain and Vicinity Hurricane Protection Plan (LPV) which was put into action after several severe hurricanes during the 1950s. The LPV is a series of levees built around New Orleans area. It was based on a study by the Corps utilizing a model to determine necessary levee height and engineering needs known as the Standard Project Hurricane (SPH). The Corps created the SPH in conjunction with the U.S. Weather Bureau to “select hurricane parameter of wind speed and central pressure for defining the SPH.”4 The LPV was to provide a degree of protection equivalent to the surge and wave action predicted to result from the SPH parameters. The analysis also took into account the Probable Maximum Hurricane (PMH) which was a stronger, although less likely event. Ultimately, the design of the project focused on SPH surge protection—the less forceful occurrence.5
      In 1965, Hurricane Betsy, a Category 5 storm, hit New Orleans causing catastrophic flooding in the area including Chalmette and the Ninth Ward. This flooding provided an added push for the LPV; shortly thereafter the plan was put into motion. The levees crucial to the issues of the case are those built to protect New Orleans East and the Chalmette area. The levees consisted of large earthen dams to prevent flooding by high tides during hurricanes.6
      In a detailed review of the evidence presented, the court enumerated a series of relevant facts contributing to the losses alleged by the property owners. Specifically, the court found that the construction and maintenance of the MRGO caused immense environmental destruction. The water from the Mississippi River that coursed through the MRGO caused erosion of clays known as fat clays. The fat clays sloughed and fell away when exposed to water resulting in lateral displacement and widening of the MRGO, which threatened the LPV. In addition, wave wash from large ocean going vessels exacerbated the damage by further stripping and widening the MRGO. Combined with a lack of foreshore protection, these factors combined to eat away at the protection offered by the LPV, widening the MRGO, and threatening the levees.7
      Further compounding the matter, increased salinity, along with changes in depths of local waterways, led to a marked decrease in local vegetation between 1956 and 1976. An expert testified that vegetation generally reduces storm surge by a foot for every 2.75 miles; roots and existing vegetation also decrease soil loss.8 The combined erosion resulted in land sloughing back into the river as the Corps dredged. The overall result was destruction of approximately 4,800 miles of land from 1965-2001 and a loss of land habitat of 19,559 miles. The higher width and fetch (open water length over which wind can blow) on the MRGO allowed more forceful frontside wash on the levees by Katrina which lead to their collapse and the flooding of the areas in question.9
      In the lawsuit, property owners alleged that the Corps failed to take timely, appropriate preventative measures, primarily foreshore protection, to prevent the exponential growth of the MRGO channel from its original design width to three times that size. The property owners further contended that the Corps’ failure to address the salinity introduced into the region by the MRGO resulted in increased wetland degradation. According to the property owners, these failures put into play certain factors that, when the channel was confronted with Hurricane Katrina’s storm surge, created forces which resulted in the cataclysmic failure of the levees.10 In response, the Corps raised three main defenses: 1) immunity under Section 702 of the Flood Control Act of 1928; 2) immunity under the FTCA’s Due Care Exception; and 3) immunity under the FTCA’s Discretionary Function Exception.11 After a nineteen-day bench trial, the court found that the Corps was liable to six plaintiffs for damages arising from MRGO but declined to find liability for claims arising from the LPV.

Immunity Under the Flood Control Act
Section 702(c) of the Flood Control Act of 1928 provides immunity to the federal government in the care and maintenance of levees for the prevention of flooding. The Corps argued that this provision governed its actions with regards to the MRGO and the LPV, and the Corps was therefore immune from liability. The court disagreed and distinguished the Corps’ operation and management of the MRGO from the LPV. According to the court, the LPV was a purely flood control project but not the MRGO. The court also found that the maintenance and oversight failures creating liability arose from the Corps’ management of the MRGO rather than the LPV. Consequently, the Corps’ actions in regard to the MRGO were not protected by the immunity provisions of the Flood Control Act.12

The Due Care Exception
The Federal Torts Claims Act (FTCA) authorizes suits against the government for damages resulting from injury or loss of property caused by negligent or wrongful acts of any government employee acting within the scope of his employment.13 The Corps raised two defenses to the claims brought under the FTCA. First, the Corps argued the Due Care Exception applied. The Due Care Exception refers to the exception immunizing the government from suit with respect to claims based on the execution of a statute or regulation and requires “that the actor have exercised due care.”14 To meet the requirements of the Due Care Exception, a party must demonstrate 1) whether the statute or regulation in question specifically proscribes a course of action, and 2) if mandated, whether due care was exercised.15
      The Corps argued that its acts in the maintenance and operation of the MRGO were mandatory actions for which it exercised due care. Conversely, plaintiffs argued that the Corps’ failure to install foreshore protection, add salt barriers, and rebuild the wetlands for levee protection demonstrates a lack of due care. While the court agreed that the Corps satisfied the requirements of due care in constructing the MRGO, the Corps failed to exercise due care with regard to maintenance of the MRGO. In the opinion of the court, the Corps’ maintenance inadequacies were further compounded by: 1) its knowledge that the MRGO was expanding past its mandated size; 2) knowledge that MRGO was a threat to human life by 1967; and 3) its failure to act in light of this knowledge. The court concluded that the Due Care Exception was therefore inapplicable.16

Discretionary Function
Finally, the Corps argued that its actions fell within the scope of the discretionary function provision of the FTCA. As noted by the court, the discretionary function provision bars claims based on the performance of a discretionary function and has no requirement to exercise due care. In fact, the statute specifically dictates that immunity attaches regardless of whether the discretion is abused.17 Regarding public policy decisions, “the discretionary function exception insulates the [g]overnment from liability if the action challenged in the case involves the permissible exercise of public judgment.”18
      According to the Corps, failure to mitigate measures and warn Congress of the impending crisis was a matter of judgment grounded in policy and thus protected. The Corps further argued that the discretionary function should apply because any remedial measures would have taken additional funds.19 The court disagreed reasoning that because the Corps was operating and maintaining the MRGO against professional engineering and safety standards, it was not protected. Specifically, the court noted that “[p]oor engineering is not policy.”20 The Corps “choose to ignore the effects of the channel; it only examined the requirement to keep the channel open regardless of its effects on the environment and the surrounding communities.”21
      The court also considered whether the Corps failed to comply with the mandates of the National Environmental Policy Act (NEPA) which would preclude application of the discretionary function exception. NEPA requires agencies to assess the environmental impacts for all major federal actions; where the actions significantly affect the environment, environmental impact statements (EIS) must be prepared.>22 Prior to NEPA’s enactment in 1969, many federal agencies claimed to have no authority to consider environmental impacts of their actions. Although the original construction of MRGO occurred prior to NEPA’s enactment, the court was unpersuaded that later actions occurring after 1970 were excluded from NEPA compliance.
      The court identified three ways the Corps violated the mandated requirements of NEPA: “1) the 1976 FEIS was fatally flawed; 2) the Corps never filed a SEIS even after it acknowledged substantial changes caused by the maintenance and operation of the MRGO; and 3) it improperly segmented its reporting guaranteeing that the public and other agencies would remain uninformed as to the drastic effects the channel was causing.”23 After reviewing the evidence, the court concluded that the Corps acted arbitrarily and capriciously regarding its obligations under NEPA. For these reasons, the Corps was without the benefit of the discretionary function exception to the FTCA.24

Conclusion
The court constructed a dense and exhaustive discussion of not only the facts surrounding the MRGO and the LPV, but also of every element of the defenses of the Corps. The only cloudy spot from the vantage of the property owners dealt with damages. The court refused to allow punitive damages under Louisiana law, and limited the property owners’ actual damages that could be proven at court as a result of the flooding. The court awarded damages for six of the property owners, but refused to allow damages for one couple, based on their cause of action being primarily based on negligent installation of a surge protection barrier, which the court found was not supported by the evidence.25

Endnotes
1.  Mr. Lowrey received his J.D. from Tulane University Law School. He currently practices law in Jackson, Mississippi.
2.  In Re Katrina Canal Breaches Consolidated Litigation; Pertains to: Robinson C.A. No. 06-2268, 647 F. Supp. 2d 644, 647 (E.D. La. 2009).
3.  Id. at 649-50.
4.  Id. at 651.
5.  Id. at 651-52.
6.  Id. at 652-53.
7.  Id. at 653-55.
8.  Id. at 666.
9.  Id. at 675-76.
10. Id. at 681.
11. Id. at 698-99.
12. Id. at 699.
13. 28 U.S.C. § 1346(b).
14. ‑In Re Katrina Canal Breaches, 647 F. Supp. 2d at 701.
15. Id. at 701-02.
16. Id. at 702.
17. Id. at 703.
18. Id. at 704.
19. Id.
20. Id. at 705
21. Id. at 707-08.
22. 42 U.S.C. § 4332.
23. 647 F. Supp. 2d at 725.
24. Id. at 730.
25. Id. at 733-36.

Recommended citation: Shawn Lowrey, District Court Finds Liability in MRGO Lawsuit, 29:4 WATER LOG 10 (2010).