In re Fema Trailer Formaldehyde Products Liability Litigation

• Decision Date: 03 October 2008
• Docket Number: MDL No. 07-1873.
• Citation: 583 F.Supp.2d 758
• Parties: In Re FEMA TRAILER FORMALDEHYDE PRODUCTS LIABILITY LITIGATION. This Document Relates to all cases.
• Court: U.S. District Court — Eastern District of Louisiana

583 F.Supp.2d 758

In Re FEMA TRAILER FORMALDEHYDE PRODUCTS LIABILITY LITIGATION.

This Document Relates to all cases.

MDL No. 07-1873.

United States District Court, E.D. Louisiana.

October 3, 2008.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Gerald Edward Meunier, Justin I. Woods, Gainsburgh, Benjamin, David, Meunier & Warshauer, New Orleans, LA, for Plaintiffs Liaison Counsel.

Andrew D. Weinstock, Duplass, Zwain, Bourgeois, Morton, Pfister & Weinstock, Metairie, LA, for Defendant's Liaison Counsel.

Henry Thomas Miller, Adam Michael Dinnell, Dept. of Justice, civ. Div., Washington, DC, Michelle George Boyle, U.S. Dept. of Justice, Tax Div., Washington, DC, for U.S.

Thomas Christopher Pennebaker, Nielsen Law Firm, Metairie, LA, for Scotbilt Homes, Inc.

Walter Kay Jamison, III, Daigle, Jamison & Rayburn, LLC, Lafayette, LA, for Alliance Homes, Inc.

ORDER AND REASONS

KURT D. ENGELHARDT, District Judge.

Before the Court is the Defendant United States of America's Motion to Dismiss Plaintiffs' FTCA and Contract Claims for Lack of Subject Matter Jurisdiction (Rec. Doc.196). After hearing oral argument¹ from counsel on July 23, 2008, and after reviewing the Complaint, the memoranda of the parties, and the applicable law, the Court rules as set forth herein.

I. INTRODUCTION

First, the undersigned notes that the motion presently before the Court addresses only the threshold inquiry of whether Plaintiffs' claims against the government should be dismissed at this early juncture in these proceedings. In other words, the issue before the Court is merely whether Plaintiffs can state a legally sufficient and valid claim cognizable under the law, given statutory and jurisprudential authority affording the government immunity from suit in some instances. This Court's decision in no way suggests or is meant to suggest any finding of liability against any party. All remaining claims are, of course, subject to discovery and, ultimately, trial on the merits.

II. BACKGROUND

On August 27, 2005, in anticipation of the approaching massive Category 4 hurricane named "Katrina," a federal emergency declaration was issued for Louisiana, which authorized the Federal Emergency Management Agency ("FEMA") to begin pre-positioning commodities and emergency management personnel. (Ex. 5 to Rec. Doc. 196, FEMA09-000119). The very next day, the same federal emergency declarations were issued for Mississippi and Alabama. (Id.)

On August 29, 2005, Hurricane Katrina made landfall. (Ex. 5 to Rec. Doc. 196, FEMA09-000118). This storm has since been described as the most destructive natural disaster in United States history, surpassing the Chicago Fire of 1871, the San Francisco Earthquake and Fire of 1906, and Hurricane Andrew in 1992. (Ex. 1 to Rec. Doc. 196, WH-000013). Hurricane Katrina's destructive winds were accompanied by a 27-foot storm surge,² which impacted nearly 93,000 square miles from Mobile, Alabama, to New Orleans, Louisiana. (Ex. 1 to Rec. Doc. 196, W00009, WH-000013-000014). Additionally, the New Orleans area experienced levee failures at the 17th Street Canal, the London Avenue Canal, and the Industrial Canal, which together flooded approximately 80 percent of the city and its surrounding areas. (Ex. 1 to Rec. Doc. 196, W000014). Over 1,320 people died in this disaster, and an estimated 300,000 homes were left uninhabitable, leaving hundreds of thousands homeless. (Ex. 5 to Rec. Doc. 196, FEMA09-000118; Ex. 1 to Rec. Doc. 196, WH-000015). The very same day Hurricane Katrina made landfall, President George W. Bush, under the authority of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. §§ 5121-5206, ("the Stafford Act"), declared the states of Louisiana, Mississippi, and Alabama "major disasters" and, thus, authorized FEMA to respond to those disasters. (Ex. 3 to Rec. Doc. 196).

Less than one month later, on September 24, 2005, Hurricane Rita made landfall along the Texas-Louisiana border. (Ex. 2 to Rec. Doc. 196, LARR-0003). Rita brought with it a 20-foot storm surge, which greatly impacted more than 85,500 square miles in Texas and Louisiana. (Ex. 2 to Rec. Doc. 196, LARR-00003, LAR00011). Hurricane Rita is said to have been the third most expensive natural disaster in our nation's history. (Ex. 2 to Rec. Doc. 196, LARR00003). Rita left an estimated 23,000 homes in Texas and Louisiana uninhabitable. (Ex. 2 to Rec. Doc. 196, LARR-000012). In response, President Bush declared both Texas and Louisiana "major disasters" under the Stafford Act. (Ex. 6 to Rec. Doc. 196).

FEMA immediately began attempting to find emergency housing for the hundreds of thousands of people who were left homeless or displaced as a result of these storms. One Individual Assistance ("IA") program that FEMA administers to aid disaster victims is the Individual and Household Assistance Program ("IHP"). This particular program, which provides housing assistance, is the primary mechanism to assist individuals and households in their recovery from damages caused by a disaster. (Ex. 5 to Rec. Doc. 196, FEMA09-000127, FEMA09-000264). IHP assistance includes (1) financial aid to repair and/or replace property lost or destroyed; (2) rental assistance to renters and homeowners whose homes are uninhabitable; and (3) direct assistance such as emergency housing units ("EHUs")³ when housing resources are not available within an affected area. (Ex. 5 to Rec. Doc. 196, FEMA09-000263; Ex. 8 to Rec. Doc. 196, ¶ 4).

Even before Hurricane Katrina made landfall, FEMA's Housing Area Command began planning to address potential shortfalls in shelter and housing. (Ex. 5 to Rec. Doc. 196, FEMA09-000209). In response to Hurricane Katrina, FEMA promptly procured approximately 20,000 existing EHUs and made plans to purchase another 100,000 EHUs. (Id.) FEMA claims it initially planned for disaster victims to find shelter in hotels, motels, cruise ships, shelters, tents, and with friends and relatives immediately following Hurricane Katrina. (Ex. 5 to Rec. Doc. 196, FEMA09-000154). Then, FEMA planned to transfer the disaster victims to EHUs. Finally, FEMA planned to transition disaster victims to apartments, etc., to address longer-term housing needs. (Id).

Kevin Souza, the Acting Deputy Director of the Individual Assistance Division of FEMA during the rebuilding of the Gulf Coast Region following Hurricanes Katrina and Rita until May 2008, has explained that "the massive damage to housing stock" in the area "created an urgent and immediate need for an unprecedented number of EHUs." (Ex. 8 to Rec. Doc. 196, ¶ 6). These EHUs were to consist primarily of: (1) travel trailers; (2) park model trailers; and (3) manufactured housing, i.e., mobile homes. Mobile homes are relatively large and are designed to be used as permanent housing. Their manufacture is regulated by the United States Department of Housing and Urban Development ("HUD"). (Rec.Doc.109, ¶¶ 18-20).⁴ Travel trailers and park model trailers, on the other hand, are smaller than their mobile home counterparts and are designed to provide temporary living quarters to individuals. (Id.) Both travel trailers and park model trailers are exempt from HUD construction standards, including those relating to acceptable formaldehyde levels.⁵ (Id.)

FEMA claims that, initially, it intended to rely primarily on mobile homes wherein disaster victims could be re-located to mobile home cities set up throughout the affected areas. (Ex. 8 to Rec. Doc. 196, ¶ 6). However, state and local officials apparently objected to this plan, asserting that disaster victims should be placed in, or as close as possible to, their devastated communities to encourage and promote rebuilding and recovery efforts. (Id.). In an attempt to satisfy these objections, FEMA made the decision to rely primarily upon travel trailers and park models which, unlike mobile homes, could be placed in, or in close proximity to, the devastated communities. (Id.).

III. CONTENTIONS RAISED IN THE PENDING MOTION

In this multi-district litigation ("the MDL"), referred to as "In Re: FEMA Trailer Formldehyde Products Liability Litigation," certain named plaintiffs have filed suit against the United States through FEMA and several Defendant manufacturers, claiming that they either lived or resided along the Gulf Coast of the United States in travel trailers, park models, and manufactured homes provided to them by FEMA after Hurricanes Katrina and Rita made landfall in August and September of 2005, respectively. Plaintiffs claim to have been exposed to purportedly high levels of formaldehyde contained in these EHUs, and to have suffered damages as a result.

In the present motion to dismiss, FEMA seeks dismissal from this lawsuit, claiming immunity from suit. Plaintiffs, on the other hand, argue that FEMA is not immune from suit and, indeed, erred (1) in its initial selection of travel trailers, park model trailers, and mobile homes as EHUs for hurricane disaster victims; (2) in its actual physical provision of the EHUs for use by Plaintiffs; and (3) in its response to concerns and complaints of formaldehyde exposure in the EHUs after they were placed in use.

IV. LAW AND ANALYSIS

A. Legal Standard

FEMA's motion is brought under both Rule 12(b)(1) of the Federal Rules of Civil Procedure and, alternatively, under Rule 56 of the Federal Rules of Civil Procedure. Thus, the Court must first determine whether this suit should be dismissed as a matter of law because the Court lacks subject matter jurisdiction over these claims, as FEMA contends. The burden of proof for a Rule 12(b)(1) motion is on the party asserting jurisdiction. Ramming v. United States, 281 F.3d 158 (5th Cir.2001). As the United States Court of Appeals for the Fifth Circuit has stated:

When a Rule 12(b)(1) motion is filed in conjunction with other Rule 12 motions, the court should consider the Rule 12(b)(1) jurisdictional attack before addressing any attack on the...