FEMA trailer makers settle formaldehyde claims

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May 1, 2012

FEMA trailer makers settle formaldehyde claims 

The plaintiffs alleged that the federal government and multiple trailer manufacturers failed to warn of the dangers, provided housing that wasn’t fit for use under the express warranty, failed to test the units to determine formaldehyde levels, and decided against safer, alternative designs. Suit against the manufacturers also alleged defective design and manufacture. In re: FEMA Trailer Formaldehyde Prod. Liab. Litig.

In the wake of Hurricanes Katrina and Rita in 2005, more than 100,000 people in Louisiana, Alabama, Mississippi, and Texas were left homeless. The Federal Emergency Management Agency (FEMA) began sending travel trailers and mobile homes for temporary housing, but didn’t have enough units. It bought thousands of trailers from manufacturers that were building them hastily using substandard materials and inadequate quality control measures.

Shortly after people began moving into the units, known as FEMA trailers, many reported smelling a strong odor. Some residents suffered headaches, dizziness, and eye and throat irritation. In 2006, air quality tests ordered by a Mississippi family revealed high levels of formaldehyde, which was found in the particle board, fiberboard, plywood, and glues used in the trailer’s construction. Although the manufacturers knew formaldehyde was in many of these products, they hadn’t warned the government or displayed a government-mandated health notice about the chemical’s dangers.

Over the next few years, FEMA and the manufacturers refused to publicly test the air quality in occupied trailers. Internal FEMA emails showed that the agency was avoiding the tests until it determined how to respond to what it knew would be negative results and that it didn’t want to take “ownership of the issue.” Emails also confirmed that the agency was working with manufacturers to “resolve the formaldehyde problem” and hoped to get the benefit of their “public relations approaches.” During this time, FEMA continued to distribute the trailers as living quarters for displaced persons.

Tests by the Sierra Club found that in 83 percent of FEMA trailers, formaldehyde levels exceeded the level at which the Environmental Protection Agency warns there can be acute health effects. Later testing by the Centers for Disease Control and Prevention found levels ranging from 3 parts per billion (ppb) to 590 ppb, when the maximum allowed by the government for exposure longer than a year is .008 parts per million. The agency concluded the level was sufficiently high to affect the occupants’ health.

Hundreds of FEMA trailer occupants sued the federal government and multiple trailer manufacturers, individually and in class actions, and the suits were transferred to multidistrict litigation. The plaintiffs’ claims against the manufacturers alleged defective design and manufacture in that they used dangerous products that deviated from manufacturing specifications. They also alleged the defendants failed to warn of the dangers, provided housing that wasn’t fit for use under the express warranty, failed to test the units to determine formaldehyde levels, and decided against safer, alternative designs.

Three bellwether trials resulted in defense verdicts.

Twenty-one manufacturers agreed to settle for $14.8 million, to be allocated by a special master. Suits against other manufacturers and the federal government are pending.

Citation: In re: FEMA Trailer Formaldehyde Prod. Liab. Litig., No. 2:07-md-01873 (E.D. La. Apr. 13, 2012).

Plaintiff steering committee: AAJ members Gerald E. Meunier, Justin I. Woods, Raul R. Bencomo, and Frank J. D’Amico Jr., all of New Orleans; AAJ member Robert M. Becnel, La Place, La.; Anthony G. Buzbee and AAJ member Dennis C. Reich, both of Houston; AAJ member Mikal C. Watts, San Antonio, Texas; AAJ member Robert C. Hilliard, Corpus Christi, Texas; and Matthew B. Moreland, Reserve, La.


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