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Local Levee Districts Will Pay $20 Million to Settle Their Role in Katrina Class Action Lawsuits

by Mark Schleifstein

U.S. District Judge Stanwood Duval on Wednesday approved a $20 million settlement involving federal class-action lawsuits that claimed sloppy work by the Orleans, Lake Borgne Basin and East Jefferson levee districts contributed to levee breaches during Hurricanes Katrina and Rita.

The settlement money actually would come from insurance proceeds resulting from policies the levee districts held on the levees, said Joseph Bruno, an attorney representing plaintiffs in the case.

But a decision on how the money would be distributed is a long way off, Bruno said.

"We expect an appeal," he said. "No decision on the distribution of this settlement will be made until the appellate process is completed. That could take months if not years."

The money will be held in a fund for the benefit of the estimated 500,000 people and businesses who lived in or owned property in East Bank communities in Jefferson, Orleans and St. Bernard parishes that are included in the class settlement. Duval will appoint a "special master" to recommend how the fund should be used to benefit the settlement class "and whether the distribution should be made for the benefit of the class as a whole or to individual class members," his order said.

Plaintiffs' attorneys in the case will be able to recover expenses incurred during the lawsuit, but will not be paid attorney's fees.

Defendants in Wednesday's settlement included the Orleans Levee District, the Lake Borgne Basin Levee District, the East Jefferson Levee District and each of their board of commissioners, as well as the Board of Commissioners of the Southeast Louisiana Flood Protection Authority-East. A preliminary agreement on the settlement was originally reached in December.

This settlement involves a lawsuit over damage from failure of drainage floodwalls in western New Orleans and only the levee districts' liability in a second lawsuit that is now focused on the role of the Mississippi River-Gulf Outlet in causing damage in St. Bernard and parts of New Orleans. Duval, an appointee of Bill Clinton, has said he plans to rule by the end of September on the remaining issues in the second , lawsuit, which was filed by WDSU-TV anchor Norman Robinson and other area residents charging the U.S. Army Corps of Engineers with negligence involving damages during the two storms caused by the design and operation of the Mississippi River-Gulf Outlet.

A third lawsuit being heard in the U.S. Court of Federal Claims in Washington, filed by residents of St. Bernard and New Orleans, contends construction of the MR-GO "took" the value of their land, as evidenced by flooding that has occurred since its construction, including during Katrina and Rita. Judge Susan Braden, an appointee of George W. Bush, has said she's waiting for Duval's ruling before proceeding with action on that case.