Fifth Circuit Mulls Katrina Flood Ruling

by Robert Verchick

November 15, 2011





Mr. Go is Gone



Today’s question: When are flood waters not “flood waters”? We New Orleanians have become fluent in all things subaqueous; last week three Texans sitting on the Fifth Circuit Court of Appeals took their turn.

Yes, we’re talking about Katrina. Or, more specifically, its flood waters, which busted federal levees in fifty places, swamped 80% of New Orleans, and caused 800 deaths in the urban area. It is beyond argument that federal malfeasance played a key role. But sovereign immunity under the 1928 Flood Control Act (FCA) seemed sure to prevent residents from pursuing any flood-based claims against their government.

Yet as recent developments suggest, the case for immunity may not be nearly so open and shut.

Back in the 1920s, when the federal government assumed responsibility for levees on the Lower Mississippi, Congress worried that such a mammoth endeavor could expose the country to overwhelming liability. So they wrote into the FCA an immunity provision: “[no] liability of any kind shall attach to . . . the United States for any damage from or by floods or flood waters at any place.” This sweeping language has proved remarkably steadfast, if not occasionally abhorrent. Take, for instance, the time when federal operators idiotically opened floodgates of a recreational reservoir without first warning a group of waterskiers, one of whom was summarily sucked down the vortex and killed. In James v. United States(1986)a majority of the Supreme Court found government immunity too clear to avoid, leaving a trio of dissenting justices wailing about an outcome they called both “perverse” and “barbaric.”

But I digress. 

The point is that after Katrina many assumed FCA immunity would shield the Corps from any responsibility for its wrongdoing. That changed in 2009 when federal trial judge Stanwood Duval held that the government’s broad immunity had limits. The case involved claims by residents in the New Orleans area for damages resulting from storm surge allegedly funneled through the Mississippi River Gulf Outlet, a now de-authorized navigation channel that locals called, “Mr. Go.” Plaintiffs assert that the Corps' negligence in design, construction, and maintenance of Mr. Go increased Katrina’s surge and made the levees more vulnerable than they otherwise would have been.

After an endless trial, Judge Duval found that the most important facts alleged by plaintiffs were all essentially true and that the Corps had been serially negligent. On the government’s assertion of FCA immunity, Duval wasn’t buying. Such immunity, the judge explained, did not cover harm caused by negligence unrelated to flood control management. Put another way, flood waters in everyday language are not “flood waters” in FCA language, unless their damage flows from a mishandled flood control project. And because Mr. Go was a navigation project, not a flood control project, the Corps’s immunity was gone.

Judge Duval awarded a total of $720,000 in damages to five plaintiffs, and the government appealed.

And so, last Wednesday a thoughtful Fifth Circuit panel (Judges Jerry Smith, Edward Prado and Jennifer Walker Elrod) pondered once again the fluid meaning of the term, “flood waters.” (Judge Duval had also rejected a second theory of immunity based on agency discretion, but that holding did not seem to interest the panel much.) (You can listen to the panel’s argument here.)

Now, as you have probably already figured out, this case is about way more than $720,000. The Army Corps has already received around half a million administrative claims from flood victims alleging similar facts. If the Fifth Circuit sides with the plaintiffs (and is not reversed on appeal) the precedent could leave the government on the hook for billions of dollars in future damages.

Plaintiffs’ lawyer Pierce O’Donnell reminded the court that FCA immunity has not always proved immovable. The Supreme Court, in Central Green Co. v. United States (2001), distinguished between irrigation water and flood-control water to hold the government liable for flood damage arising from negligent operation of an irrigation project. If you call Mr. Go’s surge “navigation water,” Mr. O’Donnell suggested, the plaintiffs win. Besides, he noted, there’s Graci v. United States(1969), a trial court decision the Fifth Circuit had itself affirmed years ago, that specifically holds that flood damage from the mishandling of a navigation project does not bring immunity.

Justice Department lawyer Mark Stern insisted instead that the statute’s plain meaning must control. But from the bench, hypotheticals came flying. What if federal construction workers accidently weaken a nearby levee and it breaks, does immunity accompany that kind of flood water? What about a naval ship that smashes through a levee? Or an Air Force jet that crashes through a levee? Or a scrap of the Hubble Telescope that sails out of orbit, screams through the atmosphere, and vaporizes a levee? (O.K., I made the last one up, but you see where this is going.)

And, by the way, what does the court do with Graci, that child of the ‘60s, which seems, after all, so directly on point? The court really doesn’t know what to do with Graci. No one even knows how to pronounce it. At one point an exasperated judge asked for a show of hands on whether one should say “GRAY-see” or “GRAS-ee.” Even after that, the parties couldn’t keep it straight.

Robert Verchick's recent book, "Facing Catastrophe: Environmental Action for a Post-Katrina World," will soon be available in paperback.

The 5th Circuit CA has not favorably regared joint causation constructions of insurance policies. So did these people already receive some flood insurance compensation by private or NFIP policies as flood damage and is this something that would collaterally estop the USACOE from arguing against flooding as the cause? Also has the NFIP claimed subrogation rights over any of the claimants claims? And did the lower court review and determine factually that no portion of Mr. Go was justified based on flood control or reduction?
— William Cumming
Due to the following language when the 5th reversed on "homeowners covering flood" . . . We conclude, however, that even if the plaintiffs can prove that the levees were negligently designed, constructed, or maintained and that the breaches were due to this negligence, the flood exclusions in the plaintiffs’ policies unambiguously preclude their recovery. Regardless of what caused the failure of the flood-control structures that were put in place to prevent such a catastrophe, their failure resulted in a widespread flood that damaged the plaintiffs’ property. This event was excluded from coverage under the plaintiffs’ insurance policies, and under Louisiana law, we are bound to enforce the unambiguous terms of their insurance contracts as written. Accordingly, we conclude that the plaintiffs are not entitled to recover under their policies. . . . I have believed (and predicted) for the last year that the 5th would reverse Robinson and the Supremes would deny cert. I think 702c precludes the need for a trial, even further assuming that the trial court reached the correct decision on the merits.
— Kelly Haggar
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Also from Robert Verchick

Robert R.M. Verchick holds the Gauthier ~ St. Martin Eminent Scholar Chair in Environmental Law at Loyola University, New Orleans, is the Faculty Director of the Center for Environmental Law at Loyola, and is a Senior Fellow in Disaster Resilience Leadership, Tulane University. He is the President of the Center for Progressive Reform.

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