SELA Lawsuit 25JUL16 (copy)

File photo of Southeast Louisiana Urban Flood Control Project construction 

Months after a judge ruled in favor of a small group of homeowners who said construction of a mammoth drainage project in Uptown New Orleans had caused major damage to their houses, hundreds of more cases continue to remain in limbo.

The Sewerage & Water Board continues to fight against the claims of nearly 300 such homeowners, who say the Southeast Louisiana Urban Flood Control Project cracked the foundations of their houses or caused other costly damage.

And as homes remain unrepaired and legal fees that already total more than the cost of the damages mount, members of the New Orleans City Council are pushing the S&WB to reach settlements quickly rather than continue to drag out the cases in a process that could take years to resolve.

“The idea of fighting those lawsuits is ridiculous,” said Councilman Jay H. Banks, whose district includes the area around Napoleon Avenue where most of the damage claims come from.

“Those houses have been damaged, and if it looks like a duck and quacks like a duck, there’s a high likelihood that it’s a duck,” he said of the belief that the flood control work caused the damage. 

The project at the center of the lawsuits, generally known as SELA, is a huge effort aimed at improving the ability of drainage systems throughout the New Orleans area to handle heavy rainstorms. While the project is being overseen by the Army Corps of Engineers, that agency’s agreement with the S&WB puts the utility on the hook for damage claims.

So far, the cases have moved slowly through the court system as the S&WB has battled on various fronts.

It seemed there might be a breakthrough earlier this year, when the first five plaintiffs went to trial and Civil District Court Judge Nakisha Ervin-Knott awarded them a total of $518,000 in a ruling that also established the S&WB’s responsibility for the damage.

The S&WB, however, is appealing that judgment.

Those pushing for quick settlements gained a new argument last month, when Ervin-Knott ordered the S&WB to pay an additional $577,000 to cover the plaintiffs’ legal fees.

“I would much prefer to see those resources spent on fixing the houses than on paying attorneys’ fees,” Banks said. “I realize there are things that are complicated and different nuances to everything, but this one does not seem to have any rational reasoning that I can figure out.”

The S&WB declined to answer questions about why the agency continues to pursue its current strategy, citing the ongoing litigation. An attorney for the S&WB, questioned by a City Council committee last month, also declined to shed light on what might be holding up an overall settlement.

Michael Whitaker, one of the lawyers representing the plaintiffs, said that by continuing to contest the remaining cases, the S&WB is just continuing to rack up legal fees.

“Were we able to negotiate a reasonable settlement or a settlement procedure, they would recognize a significant discount on the claims because we don’t have to take the cases to trial,” Whitaker said.

“This is a losing proposition (for the board). You’ve got to end this, not just because it’s the right thing to do but because it’s the sensible economic thing to do,” he said.

Beyond the mounting legal costs, continuing to fight the claims also means it could be years before any of the plaintiffs get the money to fix their houses. The next group of 10 plaintiffs is scheduled to go to trial in October; another trial is set for January.

Some of the claims paid out by the S&WB could even be credited against the $305 million, plus interest, that the utility must pay the Corps over 30 years as its share of the project.

However, Corps officials said the two agencies' agreement places strict limits on how close the damage must be to the construction site in order for the S&WB to use any money it pays to offset the amount it owes the federal government. In most cases, that “impact zone” does not extend far enough to cover the houses that line the avenues where the work occurred, said Ricky Boyett, a spokesman for the Corps.

City Councilman Jason Williams, speaking at last month’s committee meeting, said the S&WB should go to the negotiating table rather than continue to fight the cases, arguing that the “only people who make out well” at the trials are the lawyers. Williams is a criminal defense lawyer.

“The Sewerage & Water Board is going to have to pay something, and putting it off is not in the board’s best interest and it’s not in the homeowners’ best interest,” Williams said. “To the extent that we can make this right by ending it and not dragging it on, I think that makes a lot of sense.”

Follow Jeff Adelson on Twitter, @jadelson.​