On the fourth day of a nationally watched trial over toxic fumes in trailers provided to those displaced by Hurricane Katrina, an owner of a firm that made many of the trailers was questioned over apparently misleading answers provided to a newspaper reporter pursuing a story about high formaldehyde levels in the FEMA-provided trailers.
Gulf Stream Coach Inc. co-President Dan Shea appeared in the courtroom on Thursday (Sept. 17) via video testimony, answering questions from plaintiff attorney Tony Buzbee who accused the company of knowingly deceiving the public over the quality of materials used in more than 50,000 trailers, according to the Courthouse News Service.
The trial began Sept. 14 in New Orleans over allegations of sickness caused by high levels of formaldehyde in Gulf Stream Coach trailers distributed by the Federal Emergency Management Agency (FEMA) following hurricanes Katrina and Rita. FEMA-issued trailers were distributed by the thousands for emergency temporary housing following the 2005 devastation of the Gulf Coast.
Along with the maker of the trailers, the distributor, Fluor Corp., is also on trial. Fluor hauled and installed the trailers through contracts with FEMA. Fluor is accused in the ongoing civil trial of negligence in the installation of the trailers, causing damage to the frames of the trailers which in turn is alleged to have exacerbated the formaldehyde problems.
“Who is Steve Lidy?” plaintiff attorney Tony Buzbee asked Dan Shea during testimony yesterday.
“He is a person who was in Gulf Stream’s marketing department.”
“Did you tell Steve Lidy not to lie to the press when you read his e-mail and saw what he wrote to the press? Did you call and correct him?” asked Buzbee.
The e-mail in question was written by Lidy to Laura Halleman from the “Madison Courier.” Lidy references his email to Halleman in a July 2007 e-mail to Dan Shea, saying Halleman, “wanted to know what steps” had been taken by Gulf Stream “to fix the FEMA formaldehyde problem.”
Steve Lidy goes on to tell Dan Shea, “I told her we are ahead of the curve, that for years we have been using (low formaldehyde) building products to meet & exceed the manufactured housing standards. She got snippy at me saying our trailers are showing high levels. I asked her to be sure they are our trailers since there are trailers from many manufacturers in that region and then I referred her back to FEMA for any further questions and answers.”
In earlier testimony, Dan Shea said that in spring 2006 he became aware that possibly 15% of the interior wood products, supplied through Adorn, that were used in Gulf Stream trailers were not the LFE (low formaldehyde emitting) quality he and his brother Jim Shea Jr. insisted Gulf Stream Coach exclusively used in construction of its FEMA-supply travel trailers. Due to the nature of manufacture and the glues used in processing, woods used in travel trailers and manufactured homes tend to have high formaldehyde levels.
Almost every component inside the Gulf Stream Coach FEMA trailers is made from wood. The walls, cabinets, kitchen table, master bed and bunk beds are made of wood or wood components. Dan Shea additionally testified that somewhere around the same time, he and his brother Jim Jr. also realized that two-thirds of the wood they were supplied from Weyerhaeuser and Samling, used in the flooring and the roof of the trailers, was not certified LFE.
After Hurricanes Katrina and Rita, FEMA awarded Gulf Stream Coach more than $500 million in contracts for more than 50,000 travel trailers. Gulf Stream’s was among the few no-bid contracts for travel trailers that FEMA awarded directly to a trailer manufacturer.
Jim Shea Jr. testified earlier in the trial that formaldehyde complaints were surfacing even before all of Gulf Stream Coach’s 50,000 trailers had been delivered to hurricane victims.
In March 2006, CNN picked up a story about formaldehyde poisoning from a Biloxi TV station and soon the formaldehyde issue was national news.
Soon after, Dan Shea wrote in an oft-cited letter to FEMA Logistics Management Specialist Supervisor Stephen Miller: “We remain ready, willing, and able to work with FEMA with regard to any complaint, including sending representatives within 24 hours to work with your contractors to inspect, test, or do whatever is reasonably necessary to address any complaint.”
Referring to that letter during Shea’s video testimony on Thursday, plaintiff counsel told Shea, “The e-mail you sent to Mr. Miller is not true. … Can you admit to me that it is not true so we can move on?”
After a back and forth for a few moments, Shea said, “It’s my understanding at this point, some three years later… that one of the key points here … there had been some question about the material specs requirement … and I told (Steve Miller) that we knew FEMA had a big task and that we would be willing to do whatever we needed to do to assist them.”
Shea continued: “I certainly think we had a proactive approach with FEMA. … We contacted them and told them then that we would like to advise any customers who had a complaint.”
Referring to FEMA’s letter to Shea, plaintiff lawyer Buzbee asked Shea: “Steve Miller wanted to know, `Does your field staff have the capability to put this issue to bed.’ What did that mean to you?”
“I thought he was asking if our field staff could test the trailers.”
“And you told him you would have someone down (to Louisiana) to test trailers on Friday.”
“But you didn’t do that, did you?”
“No. We didn’t have the capability in three days.”
According to Buzbee, following the e-mail in which Dan Shea says he will have someone in Louisiana on Friday, there were no further e-mails from Gulf Steam to FEMA.
A representative from Fluor Corp. testified Wednesday (Sept. 16) that despite being told by the Federal Emergency Management Agency (FEMA) to let FEMA worry about formaldehyde testing in FEMA trailers, a Fluor employee’s illness, attributed to formaldehyde poisoning, was reason enough to conduct an internal investigation.
“Under OSHA,” Charles Whitaker said, “Fluor was obligated to run some tests.” It did, and a second Fluor representative testified it was not formaldehyde that caused the illness, but galvanized welding fumes, according to the Courthouse News Service.
That was in May 2006. Whitaker testified in the third day of a trial in New Orleans, La., that contends a travel trailer manufactured by Gulf Stream Coach Inc., Nappanee, Ind., of sickening residents of FEMA trailers with formaldehyde fumes after hurricanes Katrina and Rita.
Fluor was awarded a FEMA contract after the hurricanes for disaster response services, including “hauling and installing” FEMA trailers. Fluor tested just under a dozen trailers for formaldehyde fumes in May 2006, and found the highest levels of the toxin in three trailers, at 2.0 parts per million; most of the trailers allegedly showed only trace amounts of formaldehyde.
In testimony on Monday, former government toxicologist Dr. Chris De Rosa said that a level such as Fluor reported approximates a high-end natural occurrence of formaldehyde in a nonsmoking building. A high-end regular occurrence of this organic fume would be 2.2 ppm, De Rosa said.
Formaldehyde is a carcinogen and, according to testimonies of toxicologists during this trial, because it is a naturally occurring organic compound it is present in trace amounts in many manufactures materials, from fingernail polish to particle board, and occurs in the human bloodstream at a rate that can be as high as 2.0 ppm.
The two Fluor employees’ testimonies were not in agreement about whether the findings of their tests were turned over to FEMA, though a string of emails from spring 2006 shows that once Fluor employees became aware that trailers might contain hazardous levels of formaldehyde, Fluor workers in charge of health and safety produced research on formaldehyde in a matter of hours.
One Fluor environmental scientist wrote in an e-mail to colleagues: “To the best of my knowledge we have had no information provided to us by FEMA regarding formaldehyde.”
An e-mail to Fluor workers included the statement that “the most significant source of formaldehyde may be pressed wood,” such as the wood used inside FEMA trailers.
Gulf Stream’s Chairman of the Board Jim Shea testified on Tuesday that he thought it was FEMA’s responsibility to address formaldehyde problems, if any: “We went to FEMA. We met with them in Washington,” Shea said. “We offered to assist them in any way we could. They asked for input on an informational packet that they were assembling. … Yeah, we took action.”
Shea added, “I look at FEMA as the federal government and I felt the federal government had the expertise” to handle the issue. “I feel like we did the right thing in a fast-moving environment when there was a lot that we didn’t know.”
In addition to helping FEMA compile of informational pamphlets, Shea said he designed the “Fantastic Fan,” strong enough to combat the odor and fumes of formaldehyde. He suggested offering the fan “to complainants, should they complain to the government about formaldehyde.”
FEMA did not take up the idea, Shea said.
The trial is expected to last two weeks. U.S. District Judge Kurt Engelhardt is presiding.