New Orleans ? A federal judge threw out a key class-action lawsuit Wednesday against the U.S. Army Corps of Engineers over levee breaches after Hurricane Katrina, saying that the agency failed to protect the city but that his hands were tied by the law.

U.S. District Judge Stanwood Duval ruled that the Corps should be held immune over failures in drainage canals that caused much of the flooding of New Orleans in August 2005.

The ruling relies on the Flood Control Act of 1928, which made the federal government immune when flood control projects like levees break.

The suit led to about 489,000 claims by businesses, government entities and residents, totaling trillions of dollars in damages against the agency.

The fate of many of those claims was pinned to that lawsuit and a similar one filed over flooding from a navigation channel in St. Bernard Parish. It was unclear how many claims could still move forward.

In his ruling, Duval said he was forced by law to hold the Corps immune even though the agency failed to “cast a blind eye” in protecting New Orleans and “squandered millions of dollars in building a levee system … which was known to be inadequate by the Corps’ own calculations.”

But, Duval said, “it is not within the Court’s power to address the wrongs committed. It is hopefully within the citizens of the United States’ power to address the failures of our laws and agencies.”

Breaches at both the 17th Street and London Avenue canals allowed floodwater to inundate large areas of the city from near Lake Pontchartrain in the north to the edge of downtown.

Throughout the court proceedings, plaintiffs lawyers knew they faced a daunting task because the canals were, over time, used as flood control projects by the Corps.

“I knew we had an uphill battle. But we had to do it,” plaintiffs lawyer Joseph Bruno said. “It’s an outrage. Read the opinion: The judge reads through all the negligence by the Corps, but says he had to rule the way he had to.”

Bruno said the plaintiffs would appeal to the 5th U.S. Circuit Court of Appeals, but conceded that overturning the ruling would be difficult.

The plaintiffs tried to bypass the immunity issue by claiming that the Corps used the canals as drainage projects and that the levee failures were brought about by canal dredging.