The Fifth Circuit Court of Appeals has ruled that the U.S. Army Corps of Engineers (Corps) is not liable for damages caused by canal breaches that occurred in New Orleans during Hurricane Katrina. In re: Katrina Canal Breaches Litig., No. 10-30249 (5th Cir. 9/24/12). The ruling overturns and replaces a decision the same panel issued in March 2012.

Plaintiffs claimed that the impact review requirement of the National Environmental Policy Act (NEPA) constituted a legal mandate that overrides the Corps’s discretion under the Federal Tort Claims Act (FTCA), which bars suit on any claim that is “based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the Government, whether or not the discretion involved be abused.” 28 U.S.C. § 2680(a). In 2009, the district court ruled that the Corps made “negligent decisions” that “rested on applications of objective scientific principles and were not susceptible to policy considerations.” The Fifth Circuit affirmed that decision.

Citing the FTCA’s “discretionary-function exception,” the Fifth Circuit, in its most recent ruling, stated, “NEPA’s procedural mandates require agencies to inform that discretion in decision making. An agency that complies with NEPA gives outside influences (the public, lawmakers, other agencies) more information with which to put pressure on that agency, but the original agency retains substantive decision-making power regardless. At most, the Corps has abused its discretion—an abuse explicitly immunized by the discretionary-function exception.”