Katrina Ruling Breaches Sovereign Immunity

Almost a decade after Hurricane Katrina, New Orleans-area residents are still trying to hold their government accountable for mistakes that allowed a monstrous flood to devastate their city. Last week, in a case called St. Bernard Parish v. United States, a federal judge helped their cause.

In a dispute involving a major navigation channel controlled by the Army Corps of Engineers, Judge Susan G. Braden of the United States Court of Federal Claims in Washington, D.C., found that the Corps’ negligence in maintaining that passage caused flooding of such consequence that it amounted to a “taking” of homeowners’ property under the federal constitution, thus requiring the payment of “just compensation.”

The facts behind the Katrina flood—perhaps the most expensive engineering failure in American history—are well known to experts. After Hurricane Katrina had passed over New Orleans, a series of levee breaches caused flooding to 80 percent of the city. Independent investigations blamed shoddy design and construction on the part of the Army Corps. A deteriorating navigation channel, the Mississippi River Gulf Outlet, or MR-GO (pronounced “Mr. Go”), also maintained by the Corps, amplified the damage by increasing the storm’s surge and funneling it toward the heart of the city. Four years after Katrina, MR-GO was finally de-authorized and closed. (See previous posts here, here, here, and here.)

Describing the MR-GO fiasco in a 2009 court ruling, the federal trial judge Stanwood Duval nearly blew a fuse. “It is the court’s opinion that the negligence of the Corps, in this instance by failing to maintain the MR-GO properly, was not policy,” he wrote, “but insouciance, myopia and shortsightedness. . . . The Corps had an opportunity to take a myriad of actions to alleviate this deterioration . . . and failed to do so. Clearly the expression ‘talk is cheap’ applies here.”

Amazingly, liability for such epic incompetence refused to stick. A generations-old statute immunized the Corps from damages caused by levee breaks. And a federal appellate court overturned Judge Duval’s MR-GO ruling based on the ancient doctrine of sovereign immunity.

But a takings claim based on the Constitution’s Fifth Amendment is different. Constitutional rights don’t easily wilt under the heat of sovereign immunity. Nor is Congress keen to meddle with the remedy. Indeed, a special law, the Tucker Act, has helped takings claimants recoup losses in all sorts of situations for more than a hundred years.*

How does an accidental flood become a taking? Imagine you own forestland downstream from a dam, operated by the Army Corps. If the Corps demands title to your land so it could use it as a field for drainage, the agency will surely owe you just compensation, based on your property’s market value.  And if the Corps, without demanding title, just opens the dam’s flood gates, swamps your property, and converts it into a permanent drainage field, it would still owe you compensation, based on your land’s decreased value. That might be so even if the flooding were temporary, assuming a favorable factual setting and damage that was severe enough. (This last point was explained recently by Justice Ruth Bader Ginsberg, writing for a unanimous Court in Arkansas Game and Fish Commission v. United States. The key is that favorable factual setting. Where temporary flood events are concerned, a court’s inquiry must be very fact-specific; and factors like foreseeability, causation, and owner expectations must all cut the right way. So it’s difficult to know whether a temporary flood event will constitute a taking until a judge says so.

Which brings us to Judge Braden. In reviewing the history of MR-GO, she found all the favorable factors and a spot of outrage as well. Homeowners in the Ninth Ward and nearby areas, she reasoned, had every reason to believe their government would competently protect their interests.  But the dilapidated MR-GO was a disaster waiting to happen—“a ticking time bomb,” as she put it, waiting to blow a hole through a cherished American city. While the amount of compensation has not yet been determined, millions of dollars are at stake for the plaintiffs involved. If the case is expanded to a class-action lawsuit, the Corps could be on the hook for billions.

It seems likely the ruling will at some point be appealed, and given the fact-specific nature of the inquiry, an appellate court would have enough latitude to reverse if it wanted to.

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

*This paragraph was modified by the author on May 4, 2015 to clarify the role of an act of Congress in facilitating a litigant's claims under the Takings Clause. return