I was talking to a supplier the other day who asked when I thought the FEMA fiasco would be resolved. I explained that I thought the situation would be much uglier before it got better. That was certainly the case today with news that a total of 34 manufacturers would be sued Tuesday in a massive class action suit.
I suspect that once the CDC completes its testing and particular brands of RVs can be identified, that RV dealers will soon be on the hook, too. Perhaps suppliers will soon join in the fun as well. One lawyer is already suggesting the formaldehyde settlement will be largest product liability payout since the suit against the tobacco industry.
Why do I feel this way? Have you ever known a law firm seeking billions in damages to ignore ANYONE with deep pockets?
Once the worst-offending RVs can be identified, whomever sold those particular models will be subpeonaed and added to the long list of defendants. Surely, due to their established business relationships with the manufacturers they represent, they had to be aware of the formaldehyde problem with units they sold, the lawyers will contend.
Like manufacturers who provided emergency homes to people who had none, the dealers will be portrayed as greedy, profiteering individuals who cared enough only to sell the units to the federal government and collect a check to benefit from the horrible tragedy. Dealers who sold one or two or even a dozen units may be off the hook. It might take too much effort to filet those fish to get enough meat. But it might be a different story for those dealers who bought units from other dealers and packaged them to the federal government.
I think suppliers will soon be on the hook, too. Once the specific RV brands are identified, the manufacturers are going to want lots of company in the courtroom. And lawyers will be eager to cooperate. The manufacturers will quickly point fingers at their suppliers for providing the plywood, glue, carpet, paint, etc., that helped to cause all these illnesses. Even if the manufacturers chose to stand alone and protect their business partners, the names of co-conspirators will come out in the legal discovery process.
"Mr. Manufacturer, who sold you this plywood?"
"I ain't telling."
"Your honor, please order the witness to answer the question, or will you please allow us to attach a lein to all the corporation's property?"
"Uh, it was XYZ Company and ABC, too. Maybe Widgets, Inc., was in on it as well."
Nope, this issue that really isn't an industry issue because consumers don't yet associate the companies who made FEMA trailers with the same companies that build RVs, will soon blossom into an all-encompassing industry issue. RVIA, which punted the issue back to the original 12 manufacturers being sued over formaldehyde levels, will need their crisis communications consultant to draft a strategy for a scenario now involving at least one third of the companies that build RVs.
And the soap opera will play out for years in a courtroom in one of the poorest counties in America where big business will be portrayed as taking advantage of the little guy who lost everything.
I wish I were wrong -- really -- but I know lawyers well enough to know that they'll stop at nothing to squeeze $1 out of a company so they can give 15 cents to a victim and keep 85 cents in fees.
It's ironic that our government, which begged our industry to build as many units as it could as quickly as it could, will also be enjoined into the massive legal action. Lawyers represent the victims have announced they will also add FEMA to the class of companies being sued.
According to a Washington Post story in 2005, the federal government has already spent or committed to spend $80,000 for every man, woman and child living in Louisiana and Mississippi when the hurricane struck. In an article published Sept. 25, 2005, it was noted:
"Since Katrina struck, Congress has already spent $62.3 billion, dwarfing the inflation-adjusted $17.8 billion that Congress spent on hurricanes Andrew, Iniki and Omar, which struck in 1992, and the $15.2 billion emergency appropriation for the Northridge, Calif., earthquake of 1994. The entire Persian Gulf War of 1991 cost less than $83 billion in today's dollars."
I guess we can now expect the amount of federal spending attributed to Katrina to rise even more.
Sadder still is the fact that, in order to protect itself from further financial losses due to Katrina, FEMA and the other government agencies will not only hold up their hands in protest of having anything to do with the issue -- even though they set the formaldehyde standards our industry is being blamed for following -- these heartless bureaucrats will also be standing at the ready to whip fines and sanctions on RV-related businesses found culpable in the FEMA fiasco.
It's the disaster that keeps on taking.