New Orleans files $77 billion claim against Corps

Story Highlights

• Thursday was last day for residents to file claims under Federal Tort Act
• Bush visits Gulf Coast region, vowing to "stay committed" to recovery
• Corps has six months to either accept, settle or reject claims
• Corps designed levee system that was supposed to protect the low-lying city

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NEW ORLEANS, Louisiana (CNN) -- The city of New Orleans filed a $77 billion damage claim against the Army Corps of Engineers Thursday for flooding that inundated the city when levees failed after Hurricane Katrina in August 2005.

Under the Federal Tort Act, Thursday was the last day residents could file such a claim against the Corps. The claim is a required step before any lawsuit could be brought to recover damages.

City Attorney Penya Moses-Fields said uncertainty over which federal statute might govern the city's damage claims against the Corps made it "prudent" to file under the tort act "to preserve the city's claim."

The Corps has six months to either accept, settle or reject claims, after which claimants will be free to sue the federal government to recover damages.

The Corps designed the levee system that was supposed to protect the low-lying city of New Orleans. But after Katrina stuck the Gulf Coast on August 29, 2005, steel-and-concrete levees eroded and failed in several areas, flooding about 80 percent of the city with water up to 20 feet deep.

Federal law requires claimants to ask for a specific amount of damages. The $77 billion figure comes to about $170,000 for each person in the city's estimated pre-storm population of 455,000.

The Insurance Information Institute estimates insured losses for Katrina across Louisiana at $25.3 billion. According to the Federal Emergency Management Agency, $6.3 billion in recovery funds have been made available to the state, including $1.65 billion in Orleans Parish.

At least $13.2 billion in federal flood insurance payments related to Katrina have also been made in Louisiana, according to FEMA.

Overall, about $53 billion of the $110 billion Congress appropriated for reconstruction work has been spent, said Don Powell, President Bush's reconstruction coordinator.

The claim was filed on the same day President Bush paid a visit to the region, saying he sees signs of progress in the reconstruction of the battered Gulf Coast but acknowledging the "frustrations" of residents.

Bush rankled local leaders when he failed to mention the reconstruction effort in his State of the Union address in January, and Thursday's visit was his first to the region in six months.

But in a meeting with southeast Louisiana officials, he said the federal government will "stay committed" to the Gulf Coast's recovery.