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Deal may be close on RV lawsuit

Several RV manufacturers are close to settling a class action lawsuit over complaints about high levels of formaldehyde in units sent to the Gulf Coast following hurricanes Katrina and Rita in 2005

Posted on April 9, 2012 at 1:00 a.m. | Updated on April 11, 2012 at 11:02 a.m.

More than six years after the first travel trailers began arriving in the Gulf Coast following hurricanes Katrina and Rita, a settlement is pending for the lawsuits filed after toxic levels of formaldehyde were found in those recreational vehicles.

Today, April 9, is the deadline for RV manufacturers and the displaced hurricane victims who lived in the units to submit a proposed class settlement agreement to the Eastern District Court of Louisiana. This will not end the litigation but will start the process towards a conclusion.

“It’s a very complicated, multi-district litigation,” said Justin Woods, attorney with Gainsburgh, Benjamin, David, Meunier, the firm serving as the plaintiff’s liaison counsel. At one time, 85,000 individuals filed claims against more than 64 manufacturers as well as the Federal Emergency Management Agency.

Once the joint agreement is filed, any plaintiffs who do not like the terms of the settlement will be able to opt out and write a letter to the district judge, Kurt Englehardt. Also, the court will have to give regulatory agencies in the federal government as well as Louisiana, Texas, Mississippi and Alabama 90 days to review and comment.

Then probably in late July or early August the judge will issue a ruling, either approving or rejecting the settlement. Details of the agreement, including the total amount the companies will pay the victims, will be released then.

According to court documents, at least 28 manufacturing defendants are participating in the settlement, including the Elkhart County-based Dutchmen Manufacturing Co., Heartland Recreational Vehicles, Keystone RV Co., Skyline Corp. and Sunnybrook RV Inc.

Four manufacturers have not reached a settlement, according to court records. These defendants are Gulf Stream Coach Inc., Jayco Enterprises Inc./Starcraft, Forest River Inc./Vanguard Industries of Michigan, and the insurance companies — American International Specialty Lines, Insurance Company of the State of Pennsylvania and Lexington Insurance Co. — for the former Monaco Coach Corp.

Woods said the door is still open to come to an agreement with the plaintiffs but the court has already started scheduling trial dates for the cases against these four manufacturers.

In January 2011, a class action settlement against the makers of the manufactured homes sent to the Gulf after the 2005 hurricane season was settled for $2.6 million. Ken Weaver, retired attorney for the former Baker & Daniels, predicted a settlement of the RV claims would be reached within a year for a low dollar amount.

An estimated 150,000 units were shipped to the Gulf Coast after Hurricane Katrina devastated the region in August 2005. A few months later, people living in the RVs and manufactured homes began complaining of a variety of medical issues ranging from nosebleeds to cancer, which was believed to have been caused by the formaldehyde fumes inside the dwellings.

Subsequent testing by the Centers for Disease Control and Prevention confirmed high levels of formaldehyde in the units.

The court later held that FEMA was not liable, preventing residents from suing the federal government.

However, the plaintiff’s liaison counsel plans on appealing that decision to the Fifth U.S. Circuit Court of Appeals, Wood said. The attorneys will ask the court to review the order and maybe argue a different interpretation of the law.


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