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Litigation Alert: FEMA and Formaldehyde Exposure: Federal Law Preempts State Tort And Failure To Warn Claims

Date: Jun 08, 2009

The federal government's provision of mobile homes to Hurricane Katrina and Rita victims has spawned an important federal preemption decision. The District Court for the Eastern District of Louisiana recently held that the Manufactured Home Construction and Safety Standards Act ("the MHA") and standards and regulations promulgated by the United States Department of Housing and Urban Development ("HUD") impliedly preempt state tort claims alleging excessive exposure to formaldehyde.[1]

The plaintiffs, hurricane victims who had been provided emergency housing units ("mobile homes") by the Federal Emergency Management Agency ("FEMA") after Hurricanes Katrina and Rita brought state law tort claims alleging exposure to high levels of formaldehyde in those homes. Plaintiffs claimed that the ambient levels of formaldehyde in the trailers caused them injury. They also alleged, under state law, the absence of adequate warnings about the levels of formaldehyde. The defendants argued that the MHA and HUD standards and the regulations governing formaldehyde levels in materials within the mobile homes explicitly and impliedly preempted the plaintiffs' claims.

Despite an MHA provision banning state regulations that differ in any way from HUD regulations, and a statutory requirement to "broadly and liberally" interpret federal preemption under the MHA, the District Court held that the MHA and HUD regulations did not expressly preempt the plaintiffs' state law claims. The court reasoned that the MHA's "savings clause," providing that compliance with a federal construction or safety standard did not exempt a person from liability under state common law, evidenced Congressional intent not to explicitly preclude common law claims.

Similarly, the fact that Congress had "saved" state common law claims meant that it had not intended for the federal government to have exclusive jurisdiction over the field. Thus, the doctrine of implied "field preemption" did not bar the plaintiffs' claims either.

However, the Court found that plaintiffs' claims stood as an obstacle to the achievement of the MHA's purposes and objectives and were therefore impliedly preempted. Congress's goal in the MHA had been to achieve a balance between uniformity, safety and affordability in the mobile home industry. According to the District Court, if the state law claims were allowed to proceed, each mobile home manufacturer would essentially be required to tailor its product, state-by-state, in an attempt to comply with the peculiarities of each state's law, as then interpreted by each particular state's judiciary (and juries). Indeed, the standards the plaintiffs proposed conflicted with those HUD had adopted after a "lengthy process" during which both the plaintiffs' standard, and the one eventually adopted, were considered. To allow these state law claims would eviscerate Congress' intent to achieve uniformity and HUD's informed consideration of the issues; the claims were therefore impliedly preempted.

The Court held that plaintiffs' failure to warn claims were also impliedly preempted. The plaintiffs had argued that federal warning represented only a minimum and that states were free to require a more stringent warning than this federal "floor." The District Court disagreed, holding that claims advancing a state warning requirement differing from the warning required by HUD are preempted.

However, state law claims were preempted only to the extent that Congress and HUD had reached the issue. Therefore, state law claims alleging violations of the federal requirements were not preempted. Furthermore, state claims alleging safety violations not covered by federal standards (i.e., in areas other than formaldehyde) could go forward. In this latter situation, mere compliance with whatever standards do exist would not exempt a defendant from liability.

 

For more information on Keller and Heckman llp's litigation practice, please contact Doug Behr at 202-434-4213 or behr@khlaw.com.



[1] In re: FEMA Trailer Formaldehyde Products Liability Litigation, E.D. La., No. 2:07-md-01873, 5/29.09.

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