Judge tosses Katrina lawsuit against Engineer Corps

NEW ORLEANS (Reuters) - A federal judge in New Orleans on Wednesday dismissed a class action lawsuit against the U.S. Army Corps of Engineers over the failure of the city's levee system during Hurricane Katrina's floods in 2005.

U.S. Judge Stanwood Duval ruled that the Corps, which designed and built the levees and floodwalls meant to keep the below-sea-level city from being inundated, was shielded by a 1928 law that protects the federal government from lawsuits over flood control projects.

In his ruling, Duval scolded the agency for "its failure to accomplish what was its task."

"Millions of dollars were squandered in building a levee system ... which was known to be inadequate by the Corps' own calculations," Duval wrote in his ruling, issued in the U.S. District Court for the Eastern District of Louisiana.

Katrina's storm surge breached outflow canals bounded by levees and floodwalls in August 2005, flooding 80 percent of the city and killing as many as 1,600 people.

Lead plaintiffs' attorney Joe Bruno said in a statement he would appeal the decision.

"I know I'm fighting an uphill battle, but I'm not going to give up," Bruno said.

Wednesday's ruling will not affect a similar case involving the Mississippi River-Gulf Outlet, a navigational canal that Duval had previously indicated was not protected by the 1928 Flood Control Act.

Hundreds of thousands of claims have been filed against the Corps over the flooding, Bruno said. He set the total value of the claims between $30 billion and $50 billion.

(Reporting by Russell McCulley; Editing by Erwin Seba)