Toxic FEMA Trailer Claims May be Settled

Lawyers for one of several trailer manufacturers accused of supplying the federal government with toxic hurricane shelters said Wednesday they were negotiating a settlement for thousands of claims.

A federal judge has postponed a New Orleans woman's trial against Fleetwood Enterprises Inc. so the talks could continue. The Riverside, Calif.-based company and its insurers are negotiating a settlement even though a jury in September rejected a New Orleans family's claim that a trailer built by another manufacturer exposed them to hazardous fumes.

Fleetwood sold around 10,500 trailers to a company that supplied them to the Federal Emergency Management Agency, which gave Hurricane Katrina and Rita victims roughly 143,000 emergency housing units from several manufacturers.

More CBS coverage of FEMA Trailers:
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Fleetwood filed for Chapter 11 bankruptcy protection earlier this year. Attorney Jerry Saporito said there have been "serious discussions," but neither side would comment on possible terms.

"I am satisfied that this effort to reach a resolution of all claims against Fleetwood ... is in the best interests of the plaintiffs," said Gerald Meunier, one of the lead plaintiffs' lawyers.

The plaintiff, Elisha Dubuclet, claimed elevated levels of formaldehyde in her family's FEMA trailer aggravated her daughter's eczema, a skin condition, and increased her cancer risks while they lived in the unit from June 2006 to September 2007.

Dubuclet's trial was scheduled to start Monday and would have been the second for a batch of consolidated lawsuits against FEMA trailer makers. U.S. District Judge Kurt Engelhardt didn't immediately set a new trial date.

In September, a jury found that a trailer built by Gulf Stream Coach Inc. was not "unreasonably dangerous."

Government tests on hundreds of trailers in Louisiana and Mississippi found formaldehyde levels that were, on average, about five times what people are exposed to in most modern homes. Formaldehyde, a chemical commonly found in construction materials, can cause breathing problems and is classified as a carcinogen.

Plaintiffs' attorneys accuse trailer makers of using shoddy materials and methods in a rush to meet FEMA's demand for temporary housing after the 2005 storms. Company lawyers have said many products, including travel trailers, emit safe levels of formaldehyde.