A federal appeals court has upheld a judge’s landmark ruling that the Army Corps of Engineers is liable for property owners’ claims, agreeing the shoddy work on a shipping channel caused billions of dollars in damage from Hurricane Katrina’s storm surge. A three-judge panel from the 5th U.S. Circuit Court of Appeals rejected the federal government’s argument that it is entitled to immunity from lawsuits blaming Katrina’s flood damage on the corps’ operation and maintenance of the Mississippi River-Gulf Outlet, a New Orleans navigation channel.