Most efforts to win legal claims for Katrina damage have failed

In the court of public opinion, the devastation that followed Hurricane Katrina in the New Orleans area was more of a man-made disaster than a natural one, with much of the human toll and property damage the result of poorly constructed levees, abandoned pump stations and formaldehyde-laced FEMA trailers.

But property owners’ efforts to win damages in the actual courts have been consistently frustrated for years, capped recently by the 9-3 jury verdict that cleared Jefferson Parish government of culpability for flooding tens of thousands of homes and businesses.

The plaintiffs in the Jefferson case say they will appeal the ruling — and have even filed a post-trial motion contending they actually won the case — but the verdict is yet another reminder that courtroom success can be elusive, even for plaintiffs who have public sentiment on their side.

“I think if you followed the litigation resulting from Katrina, by and large, property owners and citizens have come out very poorly,” said Ed Sherman, a law professor and former dean of Tulane University Law School.

There have been some victories, including a projected $148 million settlement by Louisiana Citizens Property Insurance Corp., the state’s insurer of last resort, and a $20 million settlement with the Orleans, East Jefferson and Lake Bourne levee districts over shoddy maintenance of the levees along the Mississippi River Gulf Outlet.

The sporadic victories, however, are exceptions to the more common disappointments: the collapse of hundreds of thousands of claims against the federal government over the faulty levee system, the largely unsuccessful attempts to force the insurance industry to cover damage from Katrina’s rising water, and failed lawsuits against FEMA for health problems some people developed after living in travel trailers for extended periods.

Ultimately, the key cases against the various federal agencies were undercut by successive court decisions that found the government is legally immune from liability.

“Immunity is the big issue and a hard one to get over,” Sherman said.

Despite the evidence supporting a case that the Army Corps of Engineers was responsible for the damage caused by numerous levee breaches, U.S. District Court Judge Stanwood Duval Jr. reluctantly dismissed a class-action suit by property owners in January 2008, finding the corps was immune under the Flood Control Act of 1928.

Duval expressed disappointment that the courts would be unable to play a role in a case where the federal government failed to protect its citizens, which he called “heart-wrenching.”

He did let one case proceed, but that, too, was eventually felled by immunity.

Duval ruled in November 2009 that “sovereign immunity” didn’t apply to the corps’ failure to maintain the Mississippi River Gulf Outlet because it was not a flood-control activity. He found for the plaintiffs, who contended the gradual widening of the channel had created a “hurricane superhighway.”

While only five plaintiffs were awarded damages, some thought the decision could pave the way for billions of dollars in restitution.

The decision was initially upheld by a 5th U.S. Circuit Court of Appeals panel in early 2012, but after attorneys for the government asked the entire 5th Circuit bench to review the decision, the panel abruptly reversed itself, finding that the MRGO damage, too, was shielded from liability by a provision in the Federal Tort Claims Act.

“It’s been a long, hard road,” said Joseph Bruno, the lead plaintiff attorney in the levee cases, who has estimated attorneys spent $16 million to bring the levee lawsuits and will end up recovering just $3.5 million.

Gerald Meunier, the lead attorney in the class-action case over the deaths and illnesses allegedly caused by formaldehyde exposure in FEMA trailers, said immunity also played a significant role in how that litigation unfolded.

The lawsuit started out as a case against the Federal Emergency Management Agency and the manufacturers and installers of the trailers, but the judge ruled FEMA was immune because it was following its mandate to provide temporary housing for storm victims.

“Our argument was that FEMA had a mandate to provide safe, habitable (temporary housing), but the judge disagreed,” Meunier said, adding that the case then became a standard product liability case against private companies.

“I’m sure it didn’t help us that FEMA wasn’t in the courtroom as a defendant,” he said, explaining that juries in the bellwether trials used to test the merits of the case proved reluctant to blame manufacturers when it was the government that had put the people in the trailers.

With dim prospects for success at trial, the decision was made to settle with the trailer manufacturers for $42 million.

“It was a challenging case, and we ultimately settled in recognition of the challenges,” Meunier said.

Plaintiff attorneys also said that, in some of these cases, meeting the burden of proof required for a verdict just wasn’t possible. Once a trial starts, “the whole dynamic shifts from a public discussion based on media reporting to a vigorous and intensive fact-finding exercise in court,” Meunier said.

This was often the case in the lawsuits filed by property owners against insurance companies, where damage was found not to be covered by policies because it was caused by flooding.

Even though there were cases where people could prove in court that the damage to their property was caused by wind, Sherman said, “By and large, the storm surge cases were identified as flood damage and, therefore, homeowners’ policies didn’t apply.”

Insurance policies, he pointed out, are drafted by insurance companies, “and they’re pretty tight.”

In the Jefferson Parish flooding case, the plaintiffs asked a jury to find the parish, its drainage district, an insurer and former Parish President Aaron Broussard liable for the flooding of as many as 40,000 properties because the parish’s evacuation plan sent pump operators 100 miles away on the eve of the storm with no plan to get them back.

But after almost eight hours of deliberation earlier this month, the jury delivered a split verdict that ultimately favored the parish. Jurors found the parish was negligent in drafting the so-called “doomsday plan” that sent the operators away, but they also found that negligence didn’t cause the flood damage.

The verdict came as a surprise to some legal observers, who had speculated the parish might have a tough time before a jury drawn entirely from residents likely to have experienced flooding themselves or at least to have known someone who did. That fear drove parish attorneys to request that the trial be moved outside Jefferson Parish, a motion rejected by the presiding judge.

“Certainly, the perceived wisdom would have been that the plaintiffs would have done well with a jury, and they didn’t seem to,” Sherman said.

A couple of pieces of litigation are still pending. In addition to an appeal in the Jefferson flooding case, plaintiff attorneys are awaiting a decision from a judge on the U.S. Court of Federal Claims in Washington about property damage St. Bernard Parish blamed on the MRGO.

Despite the overall lack of success in the Katrina suits, Bruno and Meunier argued it still was important to litigate the cases in order to bring the facts to light, allowing citizens to make their own judgments and public servants to learn from past mistakes.

Jefferson Parish President John Young testified in the pump-operator trial that the lesson has been well learned in his parish: He said he would not evacuate pump operators in the face of a hurricane.

Meunier, who said his firm’s losses pursuing the FEMA trailer case were “in the seven figures,” noted that while some might see it as a self-serving statement, in his view, there was a strong element of public service in Katrina-related litigation.

“It really strikes me that the story of Katrina is also the story of a lot of trial lawyers really taking on a just cause, rolling up their sleeves, spending thousands of dollars and countless hours … and ending up with nothing,” he said.

The Associated Press contributed to this report.