      Case: 12-30635          Document: 00512201941              Page: 1      Date Filed: 04/09/2013




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                    Fifth Circuit

                                                                                        FILED
                                                                                        April 9, 2013
                                             No. 12-30635
                                                                                      Lyle W. Cayce
                                                                                           Clerk



In Re: FEMA Trailer Formaldehyde
Products Liability Litigation (Louisiana Plaintiffs)

-----------------------------------------------------------------------------------------------------------

DECARLO MCGUIRE; KEVIN RODNEY;
MARSHALL STEVENSON, JR., Individually and on Behalf of
His Minor Children, Marshall F. Stevenson, III and Lyndsay Stevenson;
LYNDA WARD STEVENSON, Individually and on Behalf of
Her Minor Children, Marshall F. Stevenson, III and Lyndsay Stevenson;
LORENZA MELANCON; et al.,

                                                          Plaintiffs–Appellants,

versus

UNITED STATES OF AMERICA,

                                                          Defendant–Appellee.




                      Appeal from the United States District Court
                         for the Eastern District of Louisiana
    Case: 12-30635        Document: 00512201941        Page: 2   Date Filed: 04/09/2013



                                      No. 12-30635

Before REAVLEY, JOLLY, and SMITH, Circuit Judges.
PER CURIAM:
      This matter arises from the multidistrict litigation (“MDL”), In re FEMA
Trailer Formaldehyde Products Liability Litigation, MDL No. 07-1873. Although
the MDL included plaintiffs from Alabama, Mississippi, Texas, and Louisiana,
this appeal involves only the Louisiana plaintiffs (hereinafter “plaintiffs”). “All
actions centralized in the MDL share factual questions relating to allegations
that the [Emergency Housing Units (“EHUs”)] provided by [the Federal Emer-
gency Management Agency (“FEMA”)] in response to Hurricanes Katrina and
Rita contained materials which emit dangerous levels of formaldehyde.” In re
FEMA Trailer Formaldehyde Products Liability Litig. (“FEMA Trailer I”), 668
F.3d 281, 285 (5th Cir. 2012) (Alabama and Mississippi plaintiffs). We incor-
porate by reference the factual background, id. at 284–85.
      In three separate orders, the district court dismissed the claims for lack
of subject-matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1). As
noted in FEMA Trailer I, 668 F.3d at 286, we review de novo a dismissal for lack
of subject-matter jurisdiction. The plaintiffs must demonstrate that this court
has “the statutory or constitutional power to adjudicate the claim.” Id. (internal
quotations and citations omitted). As we already exhaustively explained, id. at
287, this case turns on whether subject-matter jurisdiction exists under the
Federal Tort Claims Act (“FTCA”).
      First, the plaintiffs appeal the dismissal of their negligence claims relating
to the government’s selection and distribution of portable trailers as emergency
housing.1 The district court held that those claims fell under the FTCA’s
discretionary-function exception, which provides that sovereign immunity is not




      1
          This issue was not appealed in FEMA Trailer I.

                                             2
     Case: 12-30635       Document: 00512201941           Page: 3    Date Filed: 04/09/2013



                                       No. 12-30635

waived for discretionary acts and decisions.2
       Whether the discretionary exception applies involves a two-part inquiry.
First, the act must “involve an element of judgment or choice.”3 This first part
is met “[i]f a statute, regulation, or policy leaves it to a federal agency or
employee to determine when and how to take action[.]” Freeman, 556 F.3d at
337. Second, the challenged conduct must involve “governmental actions and
decisions based on considerations of public policy.” Gaubert, 499 U.S. at 323
(quoting Berkovitz, 486 U.S. at 537). The second part of the inquiry asks “not
whether the decision maker ‘in fact engaged in a policy analysis when reaching
his decision but instead whether his decision was susceptible to policy
analysis.’”4
       The government made a choice both to provide housing assistance and to
utilize travel trailers as EHUs, satisfying the first part of the test, because
FEMA “was under no contractual or legal obligation, under the Stafford Act or
other federal legislation, to provide the EHUs to disaster victims in response to
the disasters.”5 Also, the decision of what would provide the safest, most feasi-
ble, convenient, and readily available housing assistance was grounded in
“social, economic, and political policy,” meeting the second part of the test.

       2
         28 U.S.C. § 2680(a); Freeman v. United States, 556 F.3d 326, 335 (5th Cir. 2009). In
addition, though the Robert T. Stafford Disaster Relief and Emergency Assistance Act (“Staf-
ford Act”), 42 U.S.C. §§ 5121–5208, does not contain a separate waiver of sovereign immunity,
it has a discretionary-function exception with the same meaning as the FTCA exception. 42
U.S.C. § 5148; St. Tammany Parish ex rel. Davis v. FEMA, 556 F.3d 307, 319 (5th Cir. 2009).
       3
       United States v. Gaubert, 499 U.S. 315, 322 (1991) (quoting Berkovitz v. United States,
486 U.S. 531, 536 (1988)) (internal quotations, alternations, and citations omitted).
       4
        In re Katrina Canal Breaches Litig., 696 F.3d 436, 449 (5th Cir. 2012) (quoting Spotts
v. United States, 613 F.3d 559, 572 (5th Cir. 2010)).
       5
        FEMA Trailer I, 668 F.3d at 290; see also 42 U.S.C. § 5174(b); Ridgely v. FEMA, 512
F.3d 727, 736 (5th Cir. 2008) (holding that both the Stafford Act and FEMA’s implementing
regulations are written in permissive terms as to the provision and type of housing assistance);
44 C.F.R. §§ 206.101(g), 206.113(a), 206.114(a).

                                               3
    Case: 12-30635     Document: 00512201941     Page: 4   Date Filed: 04/09/2013



                                  No. 12-30635
Berkovitz, 486 U.S. at 537 (quoting United States v. S.A. Empresa de Viacao
Aerea Rio Grandense (Varig Airlines), 467 U.S. 797, 814 (1984)). With the
understanding that FEMA was only supplying temporary housing, and based
upon the express preference of state and local officials to allow people to remain
near their houses, FEMA made the policy judgment that providing travel trail-
ers was the best response to the immediate housing crisis. “Under the second
prong of the Berkovitz test, we hold that the government’s decisions about when,
where, and how to allocate limited resources within the exigencies of an emer-
gency are the types of decisions that the discretionary function exception was
designed to shelter from suit.” Freeman, 556 F.3d at 340. The district court did
not err in holding that negligence claims regarding the use of EHUs were barred
by the discretionary-function exception.
      The plaintiffs also appeal the dismissal of their claims that FEMA negli-
gently responded to formaldehyde complaints. Under the FTCA, “the Govern-
ment can only be held liable to the extent that a private individual or a business
entity could be held liable under similar circumstances under the laws where the
act or omission occurred.” FEMA Trailer I, 668 F.3d at 289. In FEMA Trailer I,
we upheld the dismissal of negligent response claims, because Alabama and Mis-
sissippi Good Samaritan provisions precluded liability. Id. at 287–90. Because
the Louisiana Good Samaritan provision of the Louisiana Homeland Security
and Emergency Assistance and Disaster Act (“LHSEADA”), LA. REV. STAT. ANN.
§ 29:733.1 (2006), like the Alabama and Mississippi laws, negates negligence
liability for an individual “who, (1) voluntarily, (2) without compensation,
(3) allows his property or premises to be used as shelter during or in recovery
from a natural disaster,” we apply the analysis of FEMA Trailer I, 668 F.3d at
289, and affirm.
      Finally, the Louisiana plaintiffs appeal the dismissal of their claims of



                                        4
     Case: 12-30635       Document: 00512201941          Page: 5     Date Filed: 04/09/2013



                                       No. 12-30635
gross negligence.6 Those claims are not barred by the LHSEADA Good Samari-
tan provision, which extends immunity except in cases involving “gross negli-
gence or the willful and wanton misconduct of the [owner.]” § 29:733.1. The dis-
trict court dismissed these remaining claims however, under the misrepresenta-
tion exception to the FTCA, 28 U.S.C. § 2680(h), which exempts, among other
things, “[a]ny claim arising out of . . . misrepresentation, deceit, or interference
with contract rights[.]”
       To apply this exception, “we determine whether ‘the chain of causation’
from the alleged negligence to the injury depends upon a misrepresentation by
a government agent.”7 We look to the underlying conduct rather than the appel-
lants’ pleading. Life Partners, 650 F.3d at 1032. “[T]he essence of an action for
misrepresentation, whether negligent or intentional, is the communication of
misinformation on which the recipient relies.” Block v. Neal, 460 U.S. 289, 296
(1983).
       Claims of gross negligence for FEMA’s alleged material omission of the
formaldehyde risk fall under the misrepresentation exception. According to the
plaintiffs, FEMA’s failure to publicize and take action on information it received
relating to formaldehyde levels and occupant risk was the proximate cause of the
injuries suffered.
       The judgment of dismissal is AFFIRMED.




       6
       This court in FEMA Trailer I, 668 F.3d at 290 n.6, declined to discuss claims of willful
misconduct, because the Mississippi and Alabama plaintiffs failed to preserve the argument.
       7
        Life Partners Inc. v. United States, 650 F.3d 1026, 1031 (5th Cir. 2011), cert. denied,
132 S. Ct. 1104 (2012). The second inquiry when applying the misrepresentation exception
is whether there is an independent federal cause of action that waives sovereign immunity for
these type of damages. Commercial Union Ins. Co. v. United States, 928 F.2d 176, 179 (5th
Cir. 1991). The plaintiffs do not present an alternative ground for waiver of sovereign
immunity.

                                              5
