Nov. 20 (Bloomberg) -- Picture Hurricane Katrina without the broken levees, with minor flooding that quickly drained, with no folks chopping through the attics of New Orleans in desperate hope of rooftop rescue.

So it might have been if the U.S. Army Corps of Engineers hadn’t flunked its job so completely and so repeatedly.

This week U.S. District Judge Stanwood Duval Jr. ordered the Corps to pay five flood victims $720,000, a pittance compared with what they should get. But the law makes it nearly impossible to win a case against the Corps, so the fact they won anything makes the ruling monumental.

However small, the award speaks to the vast scope of the Corps’ negligence. The ruling, 156 pages long and meticulous in its recounting of events and evidence, could help 100,000 victims or more collect, too.

To understand why such a puny sum makes such a huge statement, consider that a 1928 law immunizes the government against claims that its flood-control projects don’t work.

So last year Duval ruled he could do nothing to force the government to compensate plaintiffs for the collapse of its various flood-control structures.

That he wished he could was clear. He cited the “catastrophic failure of the Corps to fulfill its mission” and lamented that under the 1928 law “gross incompetence receives the same treatment as simple mistake.”

Shipping Shortcut

But that wasn’t the end of the case. The plaintiffs say the Corps made the devastation worse by building a canal as a shipping shortcut and letting it deteriorate. That’s what sent much of the flood waters over the Lower 9th Ward of New Orleans and nearby St. Bernard Parish.

Seventy-six miles long, the Mississippi River-Gulf Outlet, known locally as MR-GO or Mr. Go, connects New Orleans’s inner harbor with the Gulf of Mexico.

The beauty of it, from the plaintiffs’ standpoint, is that it was built for navigation. That means it isn’t protected by the 1928 law, which only immunizes the Corps for flood-control projects gone bad.

Even then, the Corps won some immunity because the channel’s construction was a matter of government “policy.” Any issues related to its design or construction are off limits.

So, let’s recap to ponder the breadth of the government’s immunity, according to an obviously reluctant Duval.

Even if the Corps knew its levees, pumps and drainage canals couldn’t protect New Orleans against hurricane-driven flooding, no matter the extent of its negligence, it was safe from liability.

Legal Cover

Likewise the Corps had legal cover for anything related to the way even the navigation channel was built.

Still, that wasn’t the end of the case. So massive were the government’s failures that some of them slipped out from under the generous protection of the law.

The Corps could still be sued for the way it operated and maintained MR-GO. And the government made such a horrific mess of it that it created a breach of a critical levee.

The constant pounding of ships’ waves against the banks of the canal so degraded them that the channel’s width had doubled and, in some places, tripled. Its levees had sunk to dangerously low heights.

The Corps knew by 1988 that the ever-worsening condition of MR-GO “threatened human life” and had ideas how to fix it. And yet, the Corps “did not act in time to prevent the catastrophic disaster,” Duval wrote.

Degraded Wetlands

The channel degraded wetlands, which made the area more vulnerable to hurricane damage. In various parts of MR-GO, critical shoring up either never happened or was too late or too flimsy to be of much help, wrote Duval, who presided over a month-long trial in April.

All the Corps wanted to do was keep the channel open to deep-water shipping, paying no attention to human or environmental consequences.

The Corps claimed at trial that any weaknesses of MR-GO weren’t to blame for the flooding. After the ruling, the Justice Department said it would review the matter before commenting.

The puny awards to the plaintiffs don’t reflect the vast damage the Corps did, or that the judge found its top expert “prevaricated” or that government claims directly contradicted proven facts.

The degree to which plaintiffs won compensation depended on how much of their flood damage could be attributable to the levee breach caused by MR-GO’s condition. Some got none, some got partial compensation, some got it all.

The government will no doubt appeal. And perhaps a higher court will find even the Corps’ gross negligence in maintaining MR-GO to be immunized somehow.

But the ruling should motivate Congress and the Obama administration to stop defending the indefensible and settle with the Corps’ Katrina victims.

(Ann Woolner is a Bloomberg News columnist. The opinions expressed are her own.)

To contact the writer of this column: Ann Woolner in Atlanta at awoolner@bloomberg.net.

Last Updated: November 19, 2009 21:00 EST