NEW ORLEANS (Reuters) - Negotiators are nearing a settlement in a class-action lawsuit brought by thousands of people left homeless in 2005 by Hurricanes Katrina and Rita who said they were harmed by formaldehyde when living temporarily in FEMA-provided trailers.
Residents of the homes said they suffered from illnesses ranging from respiratory irritation to more serious problems, said Justin Woods, attorney for the claimants.
Formaldehyde is a colorless, flammable gas that has a distinct, pungent smell and is used in the production of paper, resins and building materials such as plywood. Exposure over a short period can lead to respiratory irritations. Longer-term exposure can lead to cancer, the Centers for Disease Control says on its website.
If approved, the settlements would end the bulk of the lawsuits over formaldehyde in trailers, ending an embarrassing chapter in the federal government’s response to the hurricanes.
Lawyers for trailer manufacturers and contractors who installed the trailers filed joint motions on Monday and Tuesday asking U.S. District Judge Kurt Engelhardt to grant preliminary approval of settlements that would pay damages to people who lived in the trailers for varying periods after Hurricanes Katrina and Rita devastated the Gulf Coast.
They want to expand a preliminary settlement filed in April with about 20 manufacturers who would pay $14.8 million to persons harmed by living in the trailers. It would add four more manufacturers -- Forest River Inc., Gulf Stream Coach Inc., Jayco Inc. and Monaco Coach Corp.
The manufacturers and contractors would admit to no liability or wrongdoing under terms of the settlements.
Woods estimated that the number of claims could range from 40,000 to 60,000, filed by people who lived in trailers provided by the Federal Emergency Management Agency after Katrina and Rita devastated the Gulf Coast and left thousands homeless in August and September 2005.
The settlements also would cover 14 contractors that installed, maintained or refurbished the trailers. Most of that settlement involves four companies which have agreed to pay a total settlement amount of $5 million - Shaw Environmental Inc., Fluor Enterprises Inc., CH2M Hill Constructors Inc. and Bechtel National Inc.
Other contractors would pay amounts ranging from $5,500 to $22,000, adding more than $123,000 to the total, according to court filings.
Lawyer David Kurtz, who served as liaison counsel for the contractors in the case, said contractors agree that all parties are best served by settling rather than proceeding with costly litigation.
Attorneys for the manufacturers could not be reached for comment.
If the judge grants preliminary approval to the settlements, people who lived in the homes will have until August 17 to decide whether to opt out and pursue claims on their own, or until October 12 to file claims to received some of the money.
The first lawsuit in the matter was filed in 2006 and many related cases in Louisiana, Mississippi and Alabama later were consolidated in federal court in New Orleans.
Manufacturers named in the April settlement proposal include: Coachman Industries Inc; Frontier RV Inc; Heartland Recreational Vehicles LLC; Hy-Line Enterprises Inc; KZRV, LP; Pilgrim International Inc; Play-Mor Trailers Inc; Recreation by Design LLC; R-Vision Inc; Skyline Corporation Inc; SunRay RV LLC; Thor Industries Inc; Timberland RV Company; and TL Industries Inc.
Reporting By Greg McCune; Editing by Philip Barbara