U.S. District Judge Stanwood Duval threw out the class-action suit Wednesday, saying the Corps was shielded from liability under the Flood Control Act of 1928, CNN reported from New Orleans.

On Aug. 29, 2005, steel and concrete levees designed and built by the corps failed in several places during the hurricane, flooding about 80 percent of the city with water as deep as 20 feet in places.

"While the United States government is immune ... it is not free, nor should it be, from posterity's judgment concerning its failure to accomplish what was its task," Stanwood said. "Millions of dollars were squandered in building a levee system ... which was known to be inadequate by the corps' own calculations."

Last year, insured damages from the flooding was estimated at more than $25 billion by the Insurance Information Institute, the report said.

The attorney for the plaintiffs, Joseph Bruno, said he would appeal to the U.S. Court of Appeals for the Fifth Circuit, the report said.