New Orleans Asks Whopping $77 Billion in Claim to Corps
By Michelle Krupa and Susan Finch
The Times-Picayune
Friday 02 March 2007
Submitting a claim for a staggering $77 billion, the city of New Orleans joined tens of thousands of would-be plaintiffs who rushed to beat a Thursday deadline to alert the Army Corps of Engineers that they may sue for losses resulting from the levee breaches after Hurricane Katrina.
Also joining the queue were Entergy New Orleans, the city's bankrupt electrical utility, which is seeking $655 million, and the New Orleans Sewerage & Water Board, which put in a claim of about $460 million, spokesmen for the agencies said.
While they are likely to be among the largest filed, the three claims became part of an avalanche of paperwork that poured into the corps' Leake Avenue headquarters as Thursday's 11:59 p.m. deadline approached, corps personnel said.
By the time of the morning commute, cars already had clogged the two-lane River Road and miles of connecting arteries. The miles-long traffic jam got so thick that the federal agency established satellite pick-up points on Carrollton Avenue and Magazine Street.
"We took people out of offices to help out: engineers, lawyers, secretaries, you name it," spokesman Chris Accardo said. "At one time, we might have had 50 people out there."
Hours before the cut-off time, enough bags and boxes of claim forms had arrived to fill an 8-by-10-foot room, corps spokeswoman Kathy Gibbs said.
The filing bonanza would have been unthinkable just a few weeks ago.
Until recently, the idea of suing the Army Corps of Engineers was dismissed by most lawyers as a non-starter. They pointed to a 1928 federal law immunizing the corps from lawsuits stemming from its flood-control projects.
But early last month, U.S. District Judge Stanwood Duval ruled that the corps has no such protection when it comes to lawsuits over problems caused by its navigation projects.
That decision kept alive a 2006 lawsuit filed against the corps by WDSU-TV anchor Norman Robinson, a Lower 9th Ward couple and two St. Bernard Parish residents, and raised prospects of success of similar cases.
Robinson and his fellow plaintiffs argue that negligence by the corps in building and maintaining the Mississippi River-Gulf Outlet destroyed protective wetlands and turned the shipping channel into a speedway for Katrina storm surges that destroyed their homes.
Denham Springs lawyer Calvin Fayard said Thursday that earlier this week, he and fellow Katrina plaintiff attorneys Joe Bruno and Pierce O'Donnell reminded New Orleans City Council members about the claim-filing deadline.
"We informed them what was going on and urged them to notify any of the city agencies or the bodies they may regulate - cable TV, utilities - to advise them about the deadline," Fayard said. "We explained they would not be able to make a claim until they file this form."
The lawyers also alerted council members to a new case that blames corps negligence for causing breaks in the 17th Street Canal, and the flooding that followed.
Bruno said that if Duval decides that the 17th Street Canal, like the MR-GO, is a navigational waterway, he could find that the corps is also not immune from lawsuits over damage done by flooding from the canal.
Aiming High
Nagin, who has never been shy about demanding the struggling city's due recompense from the federal government, had given no indication that his administration intended to join the stampede of filers.
In announcing its claim, the mayor's office issued a terse news release by e-mail. It said the city attorney's office filed the paperwork Wednesday afternoon but offered no further details, including how officials arrived at the massive dollar figure.
The $77 billion sum amounts to nearly three-quarters of the $110 billion in federal recovery aid that has been dispatched to the Gulf Coast to cover everything from housing needs to business loans to debris removal.
"Obviously, I would assume that we have some basis for coming up with these numbers, but I don't have that information," Nagin spokesman James Ross said late Thursday. "All I can tell you if that you'll have to assume that there is some basis for the number."
Shedding some light on the mystery, City Councilwoman Shelley Midura said she attended a closed-door meeting Wednesday with Fayard and other attorneys, who encouraged the city to aim high in its quest to sue for damages.
"One of the important points they made was that we need to take into account the lost revenue to the city - the lost property taxes, the lost income - plus all of the buildings, everything," Midura said. "All of it is potentially eligible: school buildings, office buildings, everything."
Midura said the strategy is simple: "to make sure the city preserved its right to claim damages if the suit is successful."
Lost Revenue
S&WB spokesman Robert Jackson echoed that sentiment. He said the agency, which has lost half its customer base since the flood, also hopes to recoup lost operating revenue.
Entergy New Orleans, meanwhile, plans to decrease the amount of its $655 million claim if any of its pending applications for federal aid come through, spokesman Morgan Stewart said. Nevertheless, he said the utility did not want to miss the opportunity to share in any corps settlement.
"It is our obligation to pursue every avenue possible to find financial assistance that would reduce the burden of the cost of damage from Katrina on our customers," he said.
While the water board and Entergy limited their claims to property damages, their spokesmen said, Ross did not know the extent of City Hall's claim. Like any claimant, the city also could reserve the right to sue for personal injury or wrongful death, perhaps on behalf of city residents or employees who died or were injured in the flood.
The three categories are included on the two-page form, known as SF-95, that would-be plaintiffs were required to submit.
Timing Unclear
It also was unclear why the city waited a full day to reveal that it had filed the claim form.
Nagin's press office e-mailed the news release about 20 minutes before Air Force One lifted off from Louis Armstrong International Airport, concluding President Bush's visit to the city Thursday, the 18-month anniversary of Katrina. During the trip, Bush visited a Central City charter school and sat shoulder-to-shoulder with Nagin during lunch at a Treme restaurant.
Ross said the city's announcement had nothing to do with the president's visit.
"We did not time the announcement of our filing of form SF-95 to coincide with anything," he said via e-mail late Thursday. "There were absolutely no motives connected to the timing of the announcement."
Notably absent from the array of potential litigants to file claims with the corps is the state of Louisiana, hard-hit St. Bernard Parish and Jefferson Parish.
St. Bernard Councilman Joey DiFatta said the council did not file a claim because it already is suing the corps for flooding related to the MR-GO.
The state, which joined the same suit in September, took a similar position related to the SF-95 option, said Kris Wartelle, a spokeswoman for state Attorney General Charles Foti.
DiFatta and Wartelle noted that the lawsuit does not seek monetary damages. Rather, DiFatta said, it seeks to force the corps "to shut the MR-GO, build the levees and rebuild the coast."
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