Hurricane Katrina - The Legal Saga Begins

By: Guerry R. Thornton, Jr.
Atlanta, Georgia
Internet: www.netlaw.net
Copyright © - 2005


     The New Orleans tragedy may spawn a wave of litigation related to flood protection and liability for multiple levee failures. The first public statements which may serve as a foundation for massive public safety legal claims began on September 1st. The loss of life and catastrophic property damage is unprecedented - thousands of lives lost or altered forever and a major American city uninhabitable for months or years. Based on the history of flood protection in Louisiana and across the United States, it is abundantly clear that the Katrina disaster was both foreseen by safety experts and preventable had disaster warnings - which started over 10 years ago - been heeded. The scope of the New Orleans disaster has already brought condemnation from flood damage experts and public officials. Just yesterday, Sen. John Breaux stated that "warnings were there" that such a tragedy would happen. Louisiana experts have warned that this cataclysmic occurrence could occur without improvements in the New Orleans levee system.

     It has long been common knowledge that a Category 3, 4 or 5 hurricane could cause severe breaches in the levees. Prior floods and levee failures along the Mississippi Delta have given local and national water protection officials direct evidence that it was only a matter of time before New Orleans would suffer a massive disaster. Since the Katrina disaster was not only predicted but scientifically proven to occur without safety upgrades, the onslaught of legal claims is both inevitable and justified. In fact, New Orleans was listed as one of the main foreseeable disaster areas after 9/11. Studies of homeland safety and security risks concluded that New Orleans was the most exposed metropolitan areas in the country due to its geography and inadequate levee system. As the levees were built to protect the City up to a Category 3 hurricane, the flood prevention mechanisms were defective and inherently unsafe, especially in view of the predictable number of Category 4 and 5 hurricanes which occur every decade. With the increase in hurricane intensity over the past few years, the failure to shore up the levees when faced with a known danger of catastrophic proportions - mass loss of life and risk to an entire city, one of our most historic places - could mean a massive wave of litigation which will challenge the judgment of public and private entities for years to come.

     The blame game has already started. The established record and public statements over the past few days could form the basis for flood protection liability claims that will range far and wide for years to come. The types of claims will cover loss of life, personal injury, insurable risks, commercial losses, property damage, business interruption, jobs lost, repair costs, disability claims, and virtually every type action allowed by our legal system. Based on sound legal principles, a wide variety of claims have been allowed against a variety of parties, including the Army Corps of Engineers, State Governments, public officials, construction companies, architects or design firms, and maintenance entities. Although the number of claims and parties could be complex, the legal rules upon which they will be based are old and well-established - dam, pond and levee failures which cause major flooding have been brought against safety officials since the early 1800s. Virtually every major flood in the United States from a levee or dam failure has resulted in large legal claims and, in many cases, sizable settlements or recoveries to disaster victims. In fact, a 1986 flood in California recently resulted in California being ordered to pay over $500 million to landowners affected by levee failures and it could wind up paying billions in future levee disasters. This type precedent could be applied to the New Orleans tragedy, but the consequences could be much larger - the Citywide devastation and loss of life may mean $10s maybe even $100s of billions of dollars in damages.

     Floods have played a major role in the evolution of mass disaster litigation. The public is acutely aware of the millions of dollars paid to dam or levee failure victims along the Mississippi River. Now the liability focus will turn to New Orleans. This tragedy may result in thousands of suits, including class actions, claims, appeals and a litany of rulings that will affect public health and flood protection law for years. The response by the legal community to the Katrina tragedy could be swift, and may result in compensation plans that rival, or even exceed, the 9/11 settlements, now recognized as one of the largest in history. Congress has approved disaster relief funding for FEMA, with $10 billion in initial expenditures for housing, emergency services, relief efforts and the like. However, this type legislation will not provide compensation for the greatest needs of all - funds for those who lost loved ones, homes, jobs and those who are injured. In the aftermath of 9/11, the U. S. Congress quickly passed authorization for a Compensation Fund that ended up paying over $10 billion to 9/11 victims. The New Orleans disaster may justify this type federal intervention to give some systemic cushion or recovery option to death and injury victims who might otherwise swamp our legal system and bankrupt potential defendants. Even if this occurs, the 9/11 liability solution was only one of several options any victim could pursue. They could accept federal awards or pursue public or private entities for full and just compensation.

     The common sources of fault in levee failure cases normally focus on the demonstration of a breach of basic safety standards, including: 1) the failure to maintain the levee to withstand a foreseeable flood surge; 2) the levee or its mechanism or structures were originally designed or constructed in such a manner that it contributed to the levee's failure. These established rules can apply to either a public agency like the Army Corps of Engineers or to private firms, such as design and construction firms or repair, control or maintenance entities. Allegations of negligent design or maintenance are the main avenues of levee liability, according to J. David Rogers at the University of Missouri Department of Geological Engineering. See, "Flood Damage: Evolving Laws", by Prof. Rogers. A public agency like a flood control district or the Army Corps of Engineers must follow established safety rules, build and maintain a sound and secure levee system. "The fact that a levee fails is not standing alone sufficient to impose liability. However, where the public agency's design, construction or maintenance of a flood control project is shown to have posed an unreasonable risk of harm . . . the plaintiffs may recover", quoting case law in California. Legal rulings in favor of levee failure liability may open the door for victims in New Orleans to sue flood control agencies, municipal water agencies and a host of other public and private entities.

     A large number of suits can result in supervision by one Federal judge under 28 U.S.C. Sec. 1407 to coordinate discovery and achieve consistency of rulings and judicial economy. See, In Re Diet Drug Litigation, MDL No. 1203 (ED PA). The MDL judge exercises enormous control over proceedings, including expert testimony. In the implant case, tens of thousands of claims justified MDL status. See, Breast Implant Litigation, MDL 926 (USDC AL). The diet drug and implant cases resulted in a multi-billion dollar "global settlements" with complex rules, a claims process and control over future suits. Beyond federal suits, New Orleans victims can be expected to file cases in state court both of which will proceed on separate tracks.

     Although the most serious cases involve death and personal injury claims, it is easy to foreseen billions of dollars in property damage and commercial losses, such as cars, trucks and store merchandise destroyed in New Orleans. The system can expect contests over insurance coverage related to the buildings and homes that have been destroyed or damaged. Even if insurance does not apply, individuals and businesses might be able to sue flood prevention entities and private companies that were involved in designing, constructing and maintaining the levees. To cite a recent example, the 1997 New Year's Day flood in Marysville, CA, was caused by a levee break in the Feather River. Four people died and as much as $200 million in property damages occurred, including the inundation of homes, businesses and property. At the time, TV coverage showed people and animals waiting on rooftops to be rescued. After eight years of litigation, the State of California agreed in July, 2005, to pay $45 million to victims of the disaster. The settlement underscores the potential liability that governments and private agencies may face for damages to parties damaged by unsafe and poorly maintained levee systems.

     Katrina may also have an enormous impact on our political system as well. News reports may impact the Bush Presidency, both from the standpoint of how it responds to the disaster and how it cut funding for flood protection in New Orleans. Officials from both parties are already claiming that funding limits may have contributed to the disaster. Leaders are saying that had Washington heeded their warnings about the dire need for hurricane protection, such as building up the levees, the damage might not have been nearly as bad. This compelling history, together with the link between billions spent in Iraq and reductions in spending for hurricane protection, could further discredit the President's domestic and foreign policies. Local and national officials can likewise expect serious scrutiny into how they handle the tragedy. One Army Corps agent has already cast blame on the victims for failing to evacuate. This is harsh, perhaps unjustified, criticism from an entity that may have helped create the tragedy. Innocent citizens without the resources or means to evacuate should be protected, not victimized again by public comments. This size disaster can injure political careers and, hopefully, create new heroes on the national scene.

CONCLUSION

     The destinies of many thousands of people ride on how the levees were implemented and how the rescue and relief efforts are being handled. The American system has vast resources and expertise; in time, the true victims - those who lost loved ones & their standard of living - will demand intervention from our legal system if our public and private entities fail to fairly compensate their losses. Justice demands that innocent victims be restored to their pre-disaster standard of living.

     The Katrina Armageddon may force many victims to turn to our legal system for redress. Today, governmental assistance cannot provide the comprehensive help needed. The judiciary, together with armies of lawyers, insurance agents and consumer groups can assist in handling thousands of mass tort claims, and courts can fashion resolution options, ranging from an award plan to emergency relief and jury trials. Legal heirs and the injured should be afforded special rights, from choosing between a federal-state recovery fund and direct actions against the parties at fault. The Katrina legacy will also include changes in flood control systems, new water protection laws and reviews of our disaster and emergency response systems. In time, let's hope that much good from safety reforms comes from such a monumental and avoidable tragedy.

     As the New Orleans saga plays out, our legal system could be stretched to its limits as it struggles to deal with what could become the largest catastrophe in American history. Fortunately, the American system has remarkable resources, fortitude and resiliency. All of this and more will be needed to deal with the legal storm clouds now forming over New Orleans.

THE AUTHOR:

Guerry R. Thornton, Jr. is a lawyer in Atlanta & admitted in state & federal courts.
He has handled claims in the $2.5 billion Dalkon Shield and $16 billion Fen-Phen settlements
& authored articles on mass disaster litigation in Trial & The National Law Journal.

Internet site: www.netlaw.net

Contact Guerry R. Thornton, Jr.
Attorney at Law