A class action lawsuit settlement has been reached with nearly two dozen companies that manufactured FEMA trailers for Hurricane Katrina and Rita victims. The companies agreed to pay $14.8 million to resolve claims that the temporary government-issued trailers exposed occupants to hazardous fumes from formaldehyde.

An attorney for the Plaintiffs said the proposed settlement agreement could benefit tens of thousands of Gulf Coast residents who lived in FEMA trailers after hurricanes Katrina and Rita in 2005. Residents of Alabama, Louisiana, Mississippi and Texas who lived in FEMA trailers after the 2005 hurricanes are eligible to participate in the proposed class action lawsuit settlement. If final approval is granted, a court-appointed Special Master will determine how much to award each Plaintiff who qualifies.

The FEMA trailer class action lawsuit was filed after the government announced in February 2008 that tests on hundreds of FEMA trailers in Louisiana and Mississippi uncovered formaldehyde levels that were, on average, nearly five times what people are exposed to in most modern homes. The chemical is classified as a carcinogen and can cause breathing problems. If approved, the class action lawsuit settlement will be the largest mass settlement over FEMA trailer formaldehyde claims so far.

Last year, several companies that manufactured mobile homes for FEMA after Katrina agreed to pay $2.6 million to resolve thousands of related claims.

Under the proposed FEMA trailer formaldehyde class action settlement, 21 trailer makers or their insurers will pay to resolve the claims without admitting wrongdoing. The companies involved in the proposed class action settlement include Thor Industries, Inc.; Recreation by Design LLC; Play-Mor Trailers, Inc.; Cruiser RV LLC; and Skyline Corp.