Katrina Survivors Can't Sue U.S. Over Trailers

     NEW ORLEANS (CN) - Mississippi and Alabama residents cannot sue the U.S. government over formaldehyde-laden trailers that the Federal Emergency Management Agency provided when Hurricane Katrina made thousands of homes uninhabitable, the 5th Circuit ruled.
     Agreeing with the August 2010 decision of a federal judge, the federal appeals court said the plaintiffs, representing 10,000 residents, lack subject-matter jurisdiction to sue since FEMA provided the trailers at no cost to residents and under no obligation.
     In 2005 hurricanes Katrina and Rita destroyed hundreds of thousands of homes along the Gulf Coast. The Federal Emergency Management Agency contracted private businesses to immediately construct and provide thousands of travel trailers to give residents as temporary shelter until other housing became available.
     FEMA trailers were available at no cost to residents for use as temporary emergency housing from September 2005 until May 2009. Applications for receiving the trailers notified residents that the units were intended for temporary use and that applicants were required to accept alternative housing options as they became available.
     Seven months in, FEMA began receiving complaints from trailer occupants about formaldehyde odors inside the units. Formaldehyde is a chemical substance commonly found in construction materials such as plywood, particle board, home furnishing and fabrics. According to the International Agency for Research on Cancer, it is a known human carcinogen. The Environmental Protection Agency classifies it as a probable human carcinogen.
     FEMA notified these early complainants to ventilate the trailers by opening the doors and windows. In June 2006, FEMA prepared an informal brochure informing trailer occupants of the dangers of formaldehyde exposure, encouraging them to ventilate their units and urging them to seek medical help if they developed health problems related to formaldehyde.
     It began working with the Environmental Protection Agency on the issue in September 2006, with more than 200 occupants had complained to FEMA about formaldehyde by the end of the year.
     After lawsuits over the substance began accumulating, the U.S. Judicial Panel on Multidistrict Litigation consolidated all the cases and assigned the matter to Louisiana's Eastern District.
     The master 2008 complaint alleges that, between March and June 2006, FEMA harmed trailer occupants by placing litigation concerns ahead of their safety. It said the agency exposed them to trailers FEMA knew to contain dangerous levels of formaldehyde, without warning them of the dangerous nature of the units or remedying those units' dangers.
     Though FEMA knew about formaldehyde levels in trailers between March and June 2006, it allegedly failed to respond to occupants' concerns as part of a deliberate effort to avoid liability for future formaldehyde exposure claims and litigation. The plaintiffs also claimed that FEMA ignored and manipulated federal scientists' concerns to forestall negative publicity and legal liability.
     After concluding that emergency statutes in Mississippi and Alabama law would bar suit against a "private person under similar circumstances," the trial court dismissed the plaintiffs' claims on summary judgment.
     The United States cannot be sued without consent, and that consent is a prerequisite to federal jurisdiction. Courts must measure the government's liability according to the law of the state where the alleged act occurred. In this case, Mississippi and Alabama law applied.
     The Mississippi and Alabama plaintiffs appealed upon entry of the final judgment in August 2010, but the maneuver proved unsuccessful Monday.
     "Because the Mississippi and Alabama emergency statutes abrogate the tort liability of a private person who, (1) voluntarily, (2) without compensation, (3) allows his property or premises to be used as shelter during or in recovery from a natural disaster, the government's voluntary, cost-free provision of the EHUs [Emergency Housing Units] to disaster victims, in connection with Hurricanes Katrina and Rita, is also immunized conduct under the statute," Judge Carl Stewart wrote for a three-member panel. "The government's provision of the government-owned EHUs, as implemented by FEMA, was voluntary because it was under no contractual or legal obligation, under the Stafford Act or other federal legislation, to provide the EHUs to disaster victims in response to the disasters."
     The panel rejected claims that the trailer occupants' taxes amounted to compensation for FEMA's federally subsidized trailers, and it held that FEMA would have immunity because of its conduct "in recovery from an actual disaster." Though the storm passed in 2005, FEMA's temporary emergency housing program did not end until May 2009.
     Stewart concluded the 13-page opinion by refusing to certify the plaintiffs' questions about the case to the Alabama and Mississippi Supreme Courts. The former trailer occupants wanted the court to answer whether the government is considered a "person" under the states' emergency laws, whether the Federal Torts Claims Act pre-empts state law regarding liability when the United States exercises nondiscretionary duties, and whether Alabama and Mississippi's Legislatures planned to immunize the United States under the emergency statutes.
     The Alabama plaintiffs also pressed the issue of the "actual disaster" wording.