Companies to pay $14.8M in FEMA trailer settlement

By: Sarah Fitzpatrick
Topics: News

FEMA travel trailers at a staging area, Selma, Alabama, 2005/10/11

/ AP

(CBS News) - Companies that manufactured trailers provided to victims of Hurricanes Katrina and Rita by the Federal Emergency Management Agency (FEMA) have agreed to pay $14.8 million to settle claims that the trailers exposed occupants to potentially hazardous formaldehyde fumes.

A filing submitted Friday asks U.S. District Judge Kurt Engelhardt to give preliminary approval to the settlement agreement, which will resolve the claims made in a class-action lawsuit without any admission of wrongdoing by the 21 manufacturers involved in the settlement.

Plaintiffs' lawyers estimate that the proposed settlement could result in payments to between 10,000-20,000 residents of Louisiana, Texas, Alabama, and Mississippi who lived in FEMA provided trailers following the 2005 hurricanes.

CBS News previous coverage:
CBS News reports on toxic FEMA trailers

If the settlement is approved, a court-appointed special master would determine how much each plaintiff would receive. Up to 48 per cent of the settlement funds paid by the manufacturers could be used to cover the plaintiff attorneys' fees and expenses.

Since 2006, over 4,000 cases alleging formaldehyde exposure in FEMA trailers were filed in state and federal courts throughout Louisiana, Alabama, Mississippi, and Texas before being consolidated into multi-district litigation in 2007. The next hearing is scheduled to take place August 1st, 2012.

See Armen Keteyian's early coverage of the FEMA trailers:

August 31, 2009: Katrina FEMA Trailer Turmoil

August 1, 2008: FEMA Aware Of Toxic Fumes

May 5, 2007: People In FEMA Trailers Ill

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by hayseedbears May 10, 2012 1:31 PM EDT: Yeah, I know what these "class action" suits are about really. They are cash cows for lawyers. This settlement will probably net each litigant a whopping $20 (if that) and the law firm will get MILLIONS!

Take a look at the class action suit against Sallie Mae. Each member of the class can get from $20 to $40 (whoopee!) while the bill for the lawyers is $4.83 MILLION dollars.

Noone wins these things except the lawyers. It is a joke.; Reply to this comment


by djseavy April 18, 2012 4:13 AM EDT: Perhaps they should stuff the attorneys in the trailers for a while. Up to 48% goes to them - what a joke. They are the true winners here. They weren't exposed to the gas, they love to waltz in after a disaster and sue somebody (prefereably the government) for something, so they can make a fortune. It reminds me of the hokey ads on TV that blare "If you've ever stubbed your toe, you may be entitled to compensation." King Henry VIII had the right idea.; Reply to this comment

by sandiegopete April 17, 2012 10:37 PM EDT

Another sweetheart deal from the Obama administration. How much taxpayer money do you think those companies made unloading those defective trailers on the taxpayer? You can bet it was a lot more than $14.8 mil. The $14.8 mil was an amount paid so the companies could claim they did nothing wrong and therefore make it more difficult for injured individuals to seek compensation from them. After all, the federal government has agreed they did no wrong. The $14.98 mil was just hush money.

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by retiredgustav April 18, 2012 12:26 AM EDT: I thought it was strange that the later versions of the FEMA trailer brought the air directly from the outside rather than recirculate it as most heating and a/c units do.

by donretired April 17, 2012 8:54 PM EDT

Next time these people need housing let them get their own. Than they won't have anything to belly ache about. Always looking for a free handout from the tax payers.

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by retiredgustav April 18, 2012 12:24 AM EDT: Obviously you naver have been in a diaster where everything you own is gone. FEMA provided me with a trailer after hurricane IKE put 6 feet of water in my house. FEMA is also my insurer. Under my contrat with them they are to provide housing, just likeyiur homeowners insurance does after a house fire.


by tmittelstaed April 18, 2012 4:04 AM EDT: retired, FEMA is an insurer that operates at a loss, insuring people like you who choose to buy housing in areas that are flood prone, because no other insurer will take the risk, since they know it's a sucker bet.

And who makes up for FEMA's yearly losses bailing out people like you? It's my taxes that do it.

You continue to build in your flood plain because FEMA and my tax money that pays for it enable you to do so.

FEMA should have paid you off for your house and told you your choice is to move out of the flood plain and buy another house, or rebuild and carry no insurance and then the next flood would wipe you out. And I know that if you were given that choice, you would not rebuild you would move and we could turn your house into a park or something that wouldn't cost the taxpayers anything if it flooded out.

That is what donretired is talking about, and that's what I am talking about.

There's people already taking about rebuilding on Orleans in the areas that are empty now, and below sea level, because all those houses were destroyed by the flooding there. How stupid is that? And FEMA and the feds enable this insanity with my tax dollars.