(Reuters) – A U.S. appeals court has reversed itself and found that the Army Corps of Engineers cannot be held liable in property owners' lawsuits over flood damage during Hurricane Katrina.

More than 400 property owners had filed lawsuits after the August 2005 hurricane, many targeting the Corps of Engineers. The plaintiffs had said the Corps of Engineers had delayed armoring the Mississippi River-Gulf Outlet shipping channel against flood damage due to incorrect scientific decisions rather than public policy considerations.

In an unusual move, a three-judge panel of the 5th U.S. Circuit Court of Appeals in New Orleans on Monday withdrew its earlier ruling in March that had been in the plaintiffs' favor. Monday's ruling came after the federal government sought review of the panel's earlier decision by the full appeals court.

Judge Jerry Smith, writing for the court, said the Corps of Engineers was immune from being held liable for property damage under the “discretionary function exception” to the Federal Tort Claims Act, which governs litigation against the U.S. government.

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