Companies to pay $14.8M in FEMA trailer settlement

(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 1, 2008: FEMA Aware Of Toxic Fumes

May 5, 2007: People In FEMA Trailers Ill