Jury Returns Defense Verdict in FEMA Trailer Trial

Last week a federal jury in Louisiana returned a defense verdict in a plaintiffs' suit over alleged exposure to formaldehyde fumes while living for several months in a FEMA-provided trailer. In Re: FEMA Trailer Formaldehyde Products Liability Litigation, Age v. Gulf Stream Coach Inc., No. 09-02892, E.D. La.). The government had made the trailer available after Hurricane Katrina destroyed the plaintiffs' home in 2005.

Plaintiffs sued manufacturer Gulf Stream Coach Inc. and installer Fluor Enterprises Inc., alleging that elevated levels of formaldehyde aggravated family members' asthma and increased their risk for getting cancer.  (FEMA was dismissed as a defendant in the lawsuit because of the two-year statute of limitations in cases brought against the federal government.)  They argued that Gulf Stream Coach, in expediting production of the housing units following Hurricanes Katrina and Rita, used substandard materials and/or unsafe practices during the manufacturing process, which allegedly resulted in the temporary housing units containing higher than normal levels of formaldehyde. Plaintiffs alleged that Fluor's installation methods contributed to greater formaldehyde exposure.  They further charged that the FEMA trailer deviated from government safety specifications and that Gulf Stream failed to warn the government about the dangers of formaldehyde, which is found in construction materials as well as in glues and adhesives used in the manufacture of the units.

The claim is one of many hundreds of suits filed that are now part of the MDL, and one of the first five bellwether cases selected for trial. Readers of MassTortDefense will recall how Hurricane Katrina devastated much of the Gulf Coast in 2005. The total damage of Hurricane Katrina has been estimated at $75 billion, while not-much-later Hurricane Rita caused $10 billion in damage. The government, through FEMA, moved individuals whose homes were lost or deemed uninhabitable into makeshift housing provided by the agency. Plaintiffs generally allege that the trailers had components that exposed them to dangerous and excessive levels of formaldehyde.

The defense here presented alternative causation evidence on the alleged respiratory issues, and noted that formaldehyde is found in safe levels in many products, including cosmetics, foods and shampoo. The defendants sold this trailer to the most sophisticated purchaser in the world, the United States government, argued the defense, and there is no duty to warn someone about something they know about already. The defense argued that Gulf Stream wasn't obligated to build a "perfect product."

The jury of five men and three women, after 8 days of testimony, decided that the trailer made by Gulf Stream Coach Inc. was not an “unreasonably dangerous” product under Louisiana law. Judge Kurt D. Engelhardt presided over the trial.  A likely issue on appeal will be the MDL court's decision to allow certain defendants to assert the government contractor defense.

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