Parker Waichman LLP Injury Alerts
THE LEGACY OF KATRINA: Even After Two Years, Gulf Coast Residents Continue to Be Victimized By the Government and Their Insurance Companies.Aug 1, 2007
While it has been over two years since Katrina roared through the Gulf Coast, the tragic aftermath of that massive hurricane remains a vivid reminder of both the storm’s fury and the disastrous way in which it was responded to.
New Orleans was little more than a ticking time bomb waiting to explode. A catastrophe was assured as a result of poor preparation for a severe hurricane, which included inadequate (and poorly designed and maintained) levees as well as the lack of comprehensive or coordinated federal, state, and local disaster and evacuation plans.
The only thing worse than the deplorable preparation for the hurricane was the disgraceful response to it including the following:
- Failure by federal, state, and local agencies to provide any significant medical aid to those injured in the storm as well as those in need of critical care for existing medical conditions;
- The complete breakdown of law enforcement resulting in a state of near anarchy in and around city of New Orleans;
- Poor allocation and management of emergency resources at the city, state , and especially the federal level;
- Extremely poor oversight that led to billions of dollars being stolen by unscrupulous contractors, suppliers, and in fraudulent claims businesses and individuals;
- Massive waste in purchasing all types of supplies that were never distributed or that deteriorated and became unusable; and
- Insurance carriers wrongfully refusing to pay legitimate claims or paying out unconscionably low amounts to their policyholders who had lost everything.
While each of the problems listed above resulted in either injuries (or deaths) and/or huge financial losses, three of the most troublesome areas have been the revelations concerning the failed levees, the bad-faith conduct of many insurance companies in their handling of legitimate claims, and the scandal involving the government’s withholding of information with respect to the toxic nature of the trailers it purchased for use by homeless Katrina victims.
Recent investigative reports revealed that the Federal Emergency Management Agency (FEMA), which has been guilty of all types of mismanagement with respect to its response to Katrina, was aware of the existence of a toxic chemical in government-issued trailers that have been inhabited by homeless victims of the hurricane.
While the evidence of these toxic living environments has only recently come to light, it is clear that FEMA was well aware of the toxic danger for some time. Now the agency is scrambling to save face by getting people out of the trailers as quickly as possible to prevent potential illnesses and deaths.
Beginning in early 2006, FEMA reportedly concealed warnings from its own field workers about health problems experienced by hurricane victims living in government-provided trailers. These warnings indicated that there were dangerous levels of formaldehyde, a toxic chemical, present in certain trailers, over 75 times the safe levels for workers.
Formaldehyde is a common wood preservative used in construction materials such as particle board. The chemical has been known to cause vision and respiratory problems while long-term exposure has been linked to cancer and higher rates of asthma, bronchitis and allergies in children.
Investigators uncovered a trail of e-mails explaining how FEMA lawyers rejected a proposal where these government-issued trailers would be regularly and thoroughly examined to determine the presence and the levels of formaldehyde gas which is known to cause cancer.
The proposal was rejected because FEMA lawyers feared the agency could be held liable for any hazards or health problems that were detected during these inspections. Currently there are more than 120,000 families displaced by hurricanes Katrina and Rita living in the contaminated trailers, and hundreds of these residents have complained of illnesses and other health problems. One resident has filed a lawsuit against FEMA.
On June 16, 2006, three months after the initial reports of the presence of formaldehyde gas, a logistics expert for FEMA wrote that the Office of General Counsel "has advised that we do not do testing, which would imply FEMA's ownership of this issue."
Patrick Preston, a FEMA lawyer, wrote that testing should not begin until lawyers give permission because once test results surface indicating problems with toxic gas the agency is responsible for fixing them. Clearly, FEMA placed its own financial interests above the safety and wellbeing of homeless disaster victims.
After FEMA discovered formaldehyde levels that were 75 times the safe workplace levels, they stopped testing occupied trailers. One family from south Mississippi was relocated as the mother was pregnant.
A man in Slidell, LA., was found dead in his trailer on June 27, 2006, after complaining about formaldehyde fumes. Following his death, 28 officials from six agencies recommended inspection for government-issued trailers to determine the quality of trailer air. FEMA lawyers, however, rejected the suggestions arguing that further investigation pending lawyer approval “could seriously undermine the Agency's position" in litigation.
Thad Godish, a formaldehyde expert with Ball State University who has acted as an independent expert in evaluating the FEMA trailers, said the formaldehyde levels were very high putting all current residents at risk, especially children under 6. According to Godish, the effects are quite serious: “You're simply sick all the time. It's basically upper respiratory, nose, throat irritation, headaches, fatigue.''
Godish also claims that the problems with formaldehyde can be connected to trailer manufacturers buying materials from countries such as Malaysia, where formaldehyde regulations are not as restrictive as in the United States. Also, there are no federal formaldehyde standards for campers like those that exist for mobile homes.
Right before the July hearing by the House Oversight and Government Reform Committee, FEMA said it had asked federal health officials to begin assessing the conditions in trailers after prolonged use by Katrina victims. This belated action was unable to erase FEMA’s earlier decision to stop trailer inspections, a decision that was revealed when FEMA documents were subpoenaed by Congress.
Henry A. Waxman (D-Calif.) spoke out against FEMA's callous disregard of Katrina and Rita victims, calling the situation "sickening." According to Waxman, the documents point to FEMA’s “premeditated ignorance." The documents illustrate that senior officials in Washington did not want to admit to having knowledge about toxic conditions in these government-issued trailers because they did not want to be legally or morally responsible for dealing with the situation.
More congressmen sided with Waxman including Rep. Thomas M. Davis, III (R-Va.) who argued that FEMA had “obstructed” the 10-month congressional investigation of these trailers. Davis went on to say that FEMA’s actions, or lack thereof, pointed to the fact that the agency was more concerned with legal liability and public relations as opposed to the health and wellbeing of the people living in those trailers.
After Hurricane Katrina, FEMA purchased almost 102,000 travel trailers at a cost of $2.6 billion. Thousands of those trailers were never used and were simply left to rot. Terry Sloan, a floor supervisor at a Gulf Stream Coach factory in Etna Green, Ind., stated that the company worked around the clock for months to produce more than 50,000 stripped-down travel trailers. This forced the company to use cheaper wood products. "Quality suffered dramatically because of the drive and pressure to put these trailers out," Sloan said.
Although over 66,000 households affected by Katrina are currently living in the questionable trailers, FEMA had replaced only some 58 trailers and moved only five families into rental units by the beginning of August.
After conducting tests in May of 2006, The Sierra Club reported that there were unsafe levels of formaldehyde in 30 out of 32 trailers stationed along the Gulf Coast. Some residents have filed a class-action lawsuit against trailer manufacturers in U.S. District Court in Baton Rouge, LA.
Three trailer residents who testified before the panel talked about their own and their families’ physical ailments as a result of formaldehyde exposure. Some of those ailments include nosebleeds, respiratory problems and mysterious mouth and nasal tumors. The residents also said that veterinarians and pediatricians have warned that their pets and children are also at high risk for becoming ill because of toxic levels of formaldehyde in their trailers.
Paul Stewart, a former Army officer, said that he and his wife have “lost a great deal through our dealings with FEMA, not the least of which is our faith in government."
FEMA Director R. David Paulison spoke at the July hearings and issued an apology, stating that FEMA should have tested trailers earlier. “The health and safety of residents is my primary concern,” said Paulison.
Paulison, however, made it seem as if the more than 200 complaints from residents represented only a small fraction of the families living in these trailers and that more research and testing is needed before conclusive reports can determine the cause of illness in some trailer residents as well as the actual level of formaldehyde that is unsafe in homes.
Paulison also promised to consult with several U.S. health, environmental and housing agencies as well as trailer manufacturers regarding this issue. He also admitted that concerns over environmental toxins in trailers extend beyond formaldehyde and may be connected to the presence of mold, mildew, bacteria or other unidentified substances.
FEMA said that it thoroughly tested new trailers in September and October 2006. In May, however, the agency reported finding formaldehyde in those trailers at 1.2 parts per million. After four days of heavy ventilation, the formaldehyde levels decreased to 0.3 parts per million.
FEMA argued that the level of formaldehyde present following the ventilation met the standard used by the Department of Housing and Urban Development for its manufactured homes. Following the hearing, however, Paulison said that FEMA recognizes that ventilating trailers is an impractical solution during the Gulf Coast's summer heat and humidity. (Lawmakers were quick to add that FEMA had initially issued the advice at the beginning of the summer of 2006.)
Mary C. DeVany, an occupational health and safety engineer advising the Sierra Club, testified that the exposure limit of 0.3 parts per million is a staggering 400 times the normal limit for year-round exposure to formaldehyde set by the Centers for Disease Control and Prevention's Agency for Toxic Substances and Disease Registry. DeVany referred to FEMA’s claim that the levels were safe as the "misapplication and skewing of scientific results . . . to minimize adverse health effects."
After speaking with many trailer manufacturers, FEMA and Paulison said they were still unable to determine whether production problems contributed to contamination. Rep. Mark Souder (R-Ind.) said that trailer manufacturers should not be held responsible until a more comprehensive study of the toxic living conditions has been conducted.
Still, others argue that FEMA’s response to this problem serves as a poor representation for how this country prepares for and handles emergency situations like Katrina. Rep. Jim Cooper (D-Tenn.) claims that America’s consumer regulations are too lax and that FEMA’s inability to provide the proper help to those more in need has placed them in violation of many things but first and foremost, the golden rule – do unto others as you would have them do unto you.
Beginning in August, federal disaster officials plan to move thousands of hurricane victims out of contaminated trailers but many wonder if this action is too little too late.
A spokesman from FEMA said that the agency will also stop using these travel trailers in future disasters until it believes it can deliver safe ones, free from contamination. According to the new plan, FEMA will get rid of government trailer sites on the Gulf Coast and instead provide families in need with safe mobile homes, hotel rooms or apartments.
The immediate relocation of families currently living in trailers has the potential of becoming a logistical nightmare as there are still over 65,000 occupied trailers on the Gulf Coast, 45,000 in Louisiana alone, and no other available facilities to house a large amount of those families displaced by hurricanes Katrina and Rita. This is especially problematic as the current hurricane season has already spawned a number of dangerous storms including two category-five hurricanes (Dean and Felix).
Currently, FEMA has arranged about 4,500 rental units in Louisiana, but that is still nowhere near enough for what is needed to house all the people who need to be removed from contaminated or potentially contaminated trailers.
Still, it is imperative that residents living in contaminated trailers be evacuated before illnesses and long-term problems become impossible to avoid.
Paul Nelson’s 74-year-old mother died last October after living in one of the contaminated trailers since Katrina destroyed her home. The cause of her death was pneumonia and heart problems. Prior to living in the trailer, Nelson’s mother never had lung problems. An independent test conducted with a kit provided by the Sierra Club found dangerous levels of formaldehyde in her trailer.
“End of August here will be two years of people living in these things. This is wrong,” Nelson said. “I can't bring my mother back, but get the people out of these trailers, get these children out of the trailers and put them in some other accommodation.”
By this time, it is likely that many people living in contaminated trailers have already been exposed to dangerously high levels of formaldehyde and will experience adverse health events as a result of this exposure. For others, however, a swift relocation plan for all current trailer residents may save them from illnesses related to formaldehyde exposure.
Parker Waichman LLP is available for consultation if you believe you or a loved one has suffered ill-effects from being housed in a contaminated trailer or if you have been unable to be relocated to safe alternative housing.
On June 1, 2006, the Army Corps of Engineers took responsibility for the flooding in New Orleans caused by Hurricane Katrina. A massive, report of over 6,000 pages, prepared by the 150-member Interagency Performance Evaluation Task Force assembled and headed by the Corps, stated the flooding was a result of failed levees which were built in a disjointed fashion using outdated methods.
The report concluded that the levees were inconsistent in quality, materials and design and that the inconsistencies left gaps that were exploited by the storm. Engineers did not take into account the poor subterranean soil quality and the resulting sinking of land that caused some sections of the levees to be as much as two feet lower than other parts.
The report also blamed four breaches in canals that run through New Orleans on foundation failures that were not considered in the original design of these structures. These breaches caused two-thirds of the flooding in New Orleans.
A prior, and highly critical, report by the Independent Levee Investigation Team, which was made up of experts from the University of California at Berkeley, concluded that the devastation Katrina inflicted on New Orleans was caused by the failure of the system, calling it “unfinished” and “impotent.”
The group said the floodwalls failed because they were not built properly and that some levees washed away. In fact, the team concluded that the levees were not initially overrpowered by the storm surge but, rather, because they were improperly constructed of sandy soils that the surge simply ate through before overtopping occurred.
The group was highly critical of the Army Corps of Engineers, calling them “dysfunctional” and “unreliable.” The team stated, " New Orleans flooded not so much because there was a hurricane, but because of human error, poor decisions and judgments, and failed policies.”
Hurricane Katrina damaged some 169 miles of the 350-mile hurricane system that protects New Orleans and was blamed for more than 1,570 deaths and $100-$200 billion in property damage in Louisiana alone.
When people purchase insurance protection, it is with the belief that the policy covers them for the risks described in their policy. Insurance companies are obligated by law to handle your claim with good faith and fair dealing. Unfortunately, insurance companies do not see it quite the same way.
Companies will collect premiums, raise rates, and do whatever is necessary to ensure an uninterrupted flow of revenue. When it comes time to pay out on a loss or claim, however, insurance companies will always look first to the possibility of denying coverage as a result of any: (1) omission, error, or delay on the part of its insured; (2) policy exclusion or limitation in coverage; (3) ambiguity concerning the event leading to the claim; or (4) other potential (and mostly bogus) reasons for denying the claim.
As a result, the insured is often forced to pursue a number of annoying and time-consuming appeals within the company or a “bad faith” lawsuit against the company. Countless telephone calls and letters are often part of this frustrating process.
Since there have been billions of dollars in claims brought about by the enormous damage done by Hurricane Katrina, the insurance carriers have worked overtime trying to come up with as many ways of denying legitimate claims as possible (while keeping all of the premiums, of course).
All states have laws governing how insurance carriers are to deal with their insureds, handle claims, and disclaim coverage. Alabama, Louisiana, Mississippi are no exceptions. In fact, Louisiana mandates that an insurer make a written offer to resolve a property damage claim within 30 days after receipt of a "satisfactory proof of loss" for the claim. If an insurance carrier fails to do this and has no reason for its failure, it may be assessed a penalty of up to 25% on the amount due.
Even when insurance companies respond within 30 days, they often choose to simply deny a claim in order to place the burden on the insured to pursue internal appeals or legal remedies. While this may seem foolhardy on the part of an inurer, it is actually quite profitable since people, who need money immediately, often choose to accept a smaller payout in order to avoid appeals and lawsuits. Claims that are denied are likewise not pursued in a surprising number of cases snce many people trust the insurance carrier to have made a proper and legal disclaimer.
Homeowners insurance typically does not cover floods resulting from a hurricane. Therefore, the National Flood Insurance Program generally covers flood damage. Most homeowner’s policies include a sentence excluding flood, surface water, waves, tidal water, overflow of a body of water or spray from any of these.
Homeowners insurance though does cover things such as wind damage and damage from wind-driven rain. In the areas affected by Hurricane Katrina, insurers are using the flood exclusion to avoid paying claims on homes damaged only by wind or other covered risks. Thus, many inland residents in Baton Rouge and other areas have had perfectly proper claims denied under an exclusion that simply does not apply to their particular situations. Such improper denials involving claims from non-flooded areas are nothing more than bad faith on the part of the insurers.
If you are a victim of a denied Hurricane Katrina insurance claim due to bad faith or have not filed your claim, please fill out the form at
www.yourlawyer.com for a free case evaluation by a qualified attorney.