Settlement reached in FEMA trailer lawsuit

by Associated Press

Published: January 24,2011

Tags: courts, disaster, disaster recovery, housing, lawsuit, real estate, Weather

NEW ORLEANS — Companies that manufactured mobile homes for the Federal Emergency Management Agency after Hurricane Katrina have agreed to pay $2.6 million to resolve thousands of claims that the shelters exposed Gulf Coast storm victims to potentially dangerous fumes, according to a proposed class-action settlement filed last Friday.

Attorneys for plaintiffs and roughly two-dozen mobile home makers and their subsidiaries are asking a federal judge to approve the deal, which would be the second mass settlement of claims over formaldehyde exposure in the government-issued housing units FEMA ordered after the 2005 storms.

The settlement could benefit several thousand families in Louisiana, Mississippi, Texas and Alabama who claim they were exposed to dangerous levels of formaldehyde while living in FEMA mobile homes. The chemical, commonly found in building materials, can cause breathing problems and is classified as a carcinogen.

The settlement doesn’t involve claims for residents who lived in FEMA travel trailers, which housed the majority of storm victims. Travel trailers are smaller and less sturdy than mobile homes and are more prone to elevated levels of formaldehyde.

The mobile home companies involved in the proposed settlement include Cavalier Home Builders, Patriot Homes Inc., CMH Manufacturing and Champion Home Builders. A lawyer for the companies said he couldn’t immediately comment on the deal.

In May 2009, U.S. District Judge Kurt Engelhardt dismissed some of the state law claims filed against mobile home makers, ruling they were barred under federal law. Engelhardt said Congress never intended to allow states to set higher safety standards for mobile homes than those imposed by the Department of Housing and Urban Development.

Gerald Meunier, a lead plaintiffs’ lawyer, said Engelhardt’s ruling dealt a serious blow to mobile home residents’ claims against the companies.

“The only way you win is to show they broke HUD’s rules,” Meunier said. “If they complied with HUD’s rules, you’re out of luck.”

The companies agreed to pay a total of $2,625,000 into the settlement fund, but they continue to deny any wrongdoing and believe the claims are without merit, the agreement says.

A court-appointed special master will present Engelhardt with a plan for distributing the money before a “fairness hearing” is held on the proposal. Attorneys’ fees and other expenses will be deducted from the $2.6 million and are capped at 48 percent of the fund.

Meunier said he expects his clients to understand that they weren’t in a position to reap a big windfall from the deal.

“I think they’re going to be accepting of it once they understand the impact of (Engelhardt’s) ruling,” he said.

Meunier added that the judge’s ruling didn’t affect claims against travel trailer makers.

“Travel trailers are vehicles. They have VIN numbers. They’re not HUD regulated,” he said.

Three cases against companies that manufactured and installed FEMA travel trailers have been tried before Engelhardt, who is presiding over a batch of hundreds of consolidated lawsuits. The juries in all three trials sided with the companies and didn’t award any damages.

Fleetwood Enterprises Inc., which supplied FEMA with travel trailers before it filed for bankruptcy in 2009, agreed last year to a settlement resolving about 7,500 to 8,000 claims. Terms of that deal weren’t disclosed.

FEMA downplayed residents’ formaldehyde concerns before government tests on hundreds of trailers in Louisiana and Mississippi found formaldehyde levels that were, on average, about five times what people are exposed to in most modern homes.

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5 Responses to “Settlement reached in FEMA trailer lawsuit”

  1. k CASTER Says:

    Is that all a company has to do when they are sued is file bankruptcy.Wondering if they are still in business under another name still getting away with poisining people,I understand that they were trying to help but breaking rules and laws should not be tollerated use the the right materials so people won’t become sick I lost my mom to lung cancer from these trailers and i keep getting respatory infections along with nose bleeding what have they done to all of us victims .Looks like were are victims from the hurricane and trailers,I think someone should pay for thesse damages hoope they dont all file bankruptcy.

  2. alan desantis Says:

    i recently bought a trailor 2006 been coughing ever since, the thing cost me 5,000 from a car lot, i used it for a few months while i worked on my house, its falling apart from rot, the rain rotted both ends,im out 5,000 dollars, now aftewr reading this im wondering if the chest pains i feel is from that trailor? it was very clean and nice, but who knows whats hidding in those walls,, fumes mold ect, why cant these companies be made to treat the wood to last, use wood that wont harm consumers, and i feel i was ripped off for 5,000 is there nothing i can do????

  3. alan desantis Says:

    oh yea it was a 2006 caveliar 32 ft trailor

  4. Rose Says:

    Fema trailers are still being sold all over the U.S .. I bought one of them and now i feel ripped off just like everyone else . What are we to do ? I have 3 kids that love to go camping in that camper …

  5. IMOGENE MCNEELY Says:

    I WANT TO KNOW WHEN WILL THE SETTLEMENT BE REWARDED, I AND MY TWO SONS GOT THE PAPERS STATING IT WILL BE AFTER SEPT.27,2012 AND WOULD LIKE TO KNOW WHEN IT WILL BE SETTLE. ALSO THE EST. AMOUNT OF EACH PERSON. THANK YOU

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