## Facts

- Numerous property owners and businesses in the New Orleans area alleged their properties flooded during Hurricane Katrina due to failures of levees and related structures.
- Plaintiffs attributed the flooding, in relevant part, to the United States Army Corps of Engineers’ design, construction, and long-term maintenance of the Mississippi River Gulf Outlet (MRGO), a federally authorized navigation channel connecting the Gulf of Mexico to the Port of New Orleans.
- Plaintiffs alleged MRGO was cut through coastal wetlands in a manner that increased erosion and channel widening, degraded surrounding wetlands, and increased storm-surge conveyance, contributing to catastrophic flooding in areas including St. Bernard Parish and the Lower Ninth Ward.
- The consolidated federal proceedings used bellwether groupings:
  - In one set of cases, the district court entered liability judgments for certain plaintiffs under the Federal Tort Claims Act (FTCA), finding no immunity under either the Flood Control Act of 1928 (FCA) or the FTCA discretionary-function exception.
  - In another set, the district court dismissed claims against the United States, finding FCA immunity and the FTCA discretionary-function exception applied.
  - A third set was approaching trial when the United States sought appellate intervention to stay further proceedings.

## Issues

1. Whether § 702c of the Flood Control Act of 1928 immunized the United States from MRGO-related flood-damage claims arising from Hurricane Katrina.
2. Whether the FTCA discretionary-function exception, 28 U.S.C. § 2680(a), barred claims challenging the Corps’ MRGO design, maintenance, and remedial decisions, including alleged failures to armor channel banks and address widening and surge effects.
3. Whether extraordinary relief was warranted to stay a pending bellwether trial in related MRGO cases.

## Decision

- The Fifth Circuit held the FTCA discretionary-function exception barred the MRGO claims and deprived the district court of subject-matter jurisdiction over them.
- The court reversed the district court’s plaintiff-favorable judgment in the bellwether cases that had proceeded to trial.
- The court affirmed the district court’s dismissal of the bellwether cases that had been dismissed on immunity grounds.
- The court treated the FCA immunity analysis as requiring a fact-specific inquiry rather than categorical immunity, but the outcome turned on the discretionary-function holding.
- The court denied the United States’ mandamus request to stay a forthcoming trial as moot given the immunity rulings.

## Legal Principles

- Under the FTCA discretionary-function exception, courts apply a two-step test: (1) whether the challenged conduct involves judgment or choice, and (2) whether the judgment is the type the exception protects because it is based on social, economic, or political policy considerations.
- Design, operational, and maintenance choices for a major federal navigation project may fall within the discretionary-function exception when they require balancing competing policy objectives (e.g., navigation benefits, costs, environmental effects, and storm-risk considerations), even if the challenged outcomes are alleged to be negligent.
- The Flood Control Act’s § 702c immunity is assessed through a fact-specific inquiry into whether damages are caused by “flood waters” connected to flood-control activity; it is not automatically triggered by any flooding associated with a federal water project.
- Appellate resolution of immunity that forecloses further trials can render ancillary requests to stay proceedings unnecessary.

## Conclusion

The Fifth Circuit concluded that plaintiffs’ MRGO-based tort claims against the United States were barred by the FTCA discretionary-function exception because the Corps’ challenged decisions reflected policy-based judgment, requiring reversal of plaintiff-favorable FTCA judgments, affirmance of immunity-based dismissals, and mooting of a request to halt further MRGO trials.


In re Katrina Canal Breaches Litig., 673 F.3d 381 (5th Cir. 2012)