New Orleans ? The Army Corps of Engineers can be held liable for flood damage caused by a “hurricane highway,” a navigation channel that is believed to have funneled Hurricane Katrina’s storm surge into the city, a federal judge ruled Friday.

The Corps of Engineers had argued that it was immune from liability because the channel is part of New Orleans’ flood control system. The law says the federal government cannot be sued if something goes wrong with a flood control project, such as a levee, reservoir or dam.

Judge Stanwood Duval dismissed that argument, saying the Mississippi River-Gulf Outlet, or MRGO, was clearly a ship channel and not a flood control project.

Plaintiffs’ attorneys said Duval’s decision is a victory for homeowners, who have suffered setbacks in their efforts to hold the government legally responsible for storm damage. They also said it clears the way for a Sept. 8 trial.