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On Katrina’s 10th Anniversary: MRGO Gone but Not Forgotten

Case:   State of Louisiana, through the Coastal Protection and Restoration Authority Board et al. v. United States Army Corps of Engineers et al.
             United States District Court, Eastern District of Louisiana
             2:14-cv-02467 (8/28/2015)

At the urging of local shipping interests in the 1960s, the U.S. Army Corps of Engineers built the Mississippi River-Gulf Outlet Canal, known as the MRGO. The channel was intended as a 72-mile short-cut from the Gulf of Mexico to the Mississippi River through Louisiana marsh to make the Port of New Orleans more accessible. The MRGO was completed in 1968, but the Corps refused to undertake the cost of foreshore protection/maintaining the channel to prevent erosion. Consequently, the MRGO eventually reached an average width over three times its authorized width as a result of erosion. 

It was ultimately determined after Hurricane Katrina struck in 2005 that the expansion of MRGO was a principal cause of flooding in New Orleans due to its destruction of the buffer marsh between the City and the Gulf. In addition, the channel acted as a funnel, directing a massive storm surge over levees and into the City.

Post-Katrina, Congress enacted a series of statutes for flood protection of New Orleans, including closure of the MRGO and restoration of surrounding wetlands. Some projects were to be undertaken “at full federal expense,” while others were to be paid for “consistent with the cost-sharing provisions under which the projects were originally constructed.” This case involves a dispute between state and federal interests as to who would fund the ordered closures and restoration.

The Corps closed the MRGO in 2009, partially funded by the State of Louisiana but on a without prejudice basis to recover the amounts expended. The second project related to flood protection, marsh restoration, was then estimated at $2.9 billion. The Corps concluded that it had no obligation to begin the restoration project unless and until the State of Louisiana funded its share, which the Corps had determined to be 35% of the project or $975 million. The State then sued on grounds that the Corps’ refusal to fund the marsh restoration and closure of the MRGO in its entirety was arbitrary and capricious and in violation of the federal Administrative Procedure Act (APA).  

The APA allows a federal court to overrule final agency action only if it is arbitrary, capricious, an abuse of discretion, not in accordance with law, or unsupported by substantial evidence. If the enabling statute is ambiguous, the agency’s interpretation is considered presumptively correct. 

Relying on Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), the federal district court in New Orleans held that the MRGO statute was clear and unambiguous and thus the Corps’ interpretation was entitled to no weight. According to the court, the channel closure and marsh restoration were clearly intended by Congress as mandated construction projects which, by statute, are “at full federal expense.”

After Hurricane Katrina vital ecosystem restoration remains incomplete. As the district court pointed out, coastal restoration necessitated by MRGO remains stalled while the “legal wrangling” continues.

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