updated 1/30/2008 8:27:40 PM ET 2008-01-31T01:27:40

A federal judge threw out a key class-action lawsuit Wednesday against the U.S. Army Corps of Engineers over levee breaches after Hurricane Katrina, saying that the agency failed to protect the city but that his hands were tied by the law.

U.S. District Judge Stanwood Duval ruled that the Corps should be held immune over failures in drainage canals that caused much of the flooding of New Orleans in August 2005.

The ruling relies on the Flood Control Act of 1928, which made the federal government immune when flood control projects like levees break.

The suit led to about 489,000 claims by businesses, government entities and residents, totaling trillions of dollars in damages against the agency.

The fate of many of those claims was pinned to that lawsuit and a similar one filed over flooding from a navigation channel in St. Bernard Parish. It was unclear how many claims could still move forward.

Judge: Corps 'cast a blind eye'
In his ruling, Duval said he was forced by law to hold the Corps immune even though the agency failed to “cast a blind eye” in protecting New Orleans and “squandered millions of dollars in building a levee system ... which was known to be inadequate by the Corps’ own calculations.”

But, Duval said, “it is not within the Court’s power to address the wrongs committed. It is hopefully within the citizens of the United States’ power to address the failures of our laws and agencies.”

Breaches at both the 17th Street and London Avenue canals allowed flood water to inundate large areas of the city from near Lake Pontchartrain to the north to the edge of downtown.

Throughout the court proceedings, plaintiffs lawyers knew they faced a daunting task because the canals were, over time, used as flood control projects by the Corps.

“I knew we had an uphill battle. But we had to do it,” plaintiffs lawyer Joseph Bruno said. “It’s an outrage. Read the opinion: The judge reads through all the negligence by the Corps, but says he had to rule the way he had to.”

Bruno said the plaintiffs would appeal to the 5th U.S. Circuit Court of Appeals, but he conceded that overturning Duval’s ruling would be difficult.

The plaintiffs tried to bypass the immunity issue by claiming that the Corps used the canals as drainage projects and that the levee failures were brought about by canal dredging.

Another blow
The ruling was another blow to the people of New Orleans, where loathing for the Corps continues unabated.

“This cost people’s lives and property,” said Gwen Bierria, 66. She is still living in a government-issued trailer on her property abutting the London Avenue Canal and is among the tens of thousands of people who have filed claims against the federal government for damage from the levee breaches.

“Anybody that calls themselves the Army Corps of Engineers should be embarrassed,” she said.

A call to the Corps on Tuesday night seeking comment was not immediately returned.

Al Petrie, incoming president of the Lakeview Civic Improvement Association, said that few residents who returned to the neighborhood and started to rebuild based their decision on the success or failure of the levee litigation.

Still, many residents will continue blaming the Corps for the disaster no matter what the courts say, he said.

“Over time, anger tends to quiet down,” he said. “It doesn’t mean people are less cautious. We’re still beholden to the Corps to do this right.”

James Ackerson, 36, is nearly done repairing his home several blocks from the 17th Street Canal. He filed a claim with the Corps but wasn’t distressed to hear that the judge dismissed the case.

“It don’t mean much to me,” he said. “I’m not waiting on the government to give me nothing.”

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