During the course of manufacture of the Mobile Home,[ (See footnote 6) ] Skyline caused numerous pieces of Georgia Pacific manufactured home decking containing formaldehyde to be cut into pieces. The formaldehyde containing sawdust and residue of this process was negligently swept or otherwise placed by Skyline into the forced air heating ducts . . . .
The complaint further alleges that the plaintiffs [were exposed] to toxic levels of formaldehyde released into the air of the home when the formaldehyde treated waste materials in the duct work were subjected to forced air heat.
Skyline filed a motion to dismiss based in part on the assertion that federal law preempted the Harrison's formaldehyde based negligence claim. Following the conclusion of discovery, Skyline again raised the issue in a motion for summary judgment. The trial court entered an order on October 10, 2007, dismissing some of the Harrisons' claims against Skyline. However, the order relates a different outcome as to the claim concerning formaldehyde treated panels as shown by the following excerpt from the Conclusions of Law:
55. Regarding the argument that Plaintiffs' claim for personal injury from excess formaldehyde gas in the manufactured home
is preempted by federal law, the court is persuaded that the law of this state is that such claims are not preempted by the National Manufactured Housing Construction and Safety Standards Act, 42 U.S.C.A. Sections 5401-5426, nor by regulations promulgated thereunder.[ (See footnote 7) ]
After further concluding that genuine issues of material fact remained unresolved with regard to the formaldehyde based claim, the lower court denied Skyline's motion for summary judgment.
Skyline next filed a motion requesting the lower court to either reconsider Skyline's preemption argument or to seek review of the preemption question by this Court. By order dated July 22, 2008, the trial court affirmed its prior denial of summary judgment of the formaldehyde based claims and granted the request to certify questions of law regarding the federal preemption defense raised by Skyline and Georgia-Pacific to the negligence claims. On August 11, 2008, the trial court entered an order certifying the following three questions with answers to this Court:
1. Does the preemption provision found at 42 USC § 5403(d) preempt and bar plaintiff's common law negligence claim based upon formaldehyde exposure when the Plaintiffs do not claim, and cannot establish, that the Defendants failed to comply with the formaldehyde standards established in 24 CFR §§ 3280.308 and 3280.309?
May the plaintiffs present evidence of ambient air testing
for the presence of formaldehyde in support of their
common law negligence claim when HUD specifically
considered and rejected the ambient air standard that
plaintiffs want to present to a court and jury as the
standard of care.
3. Does the savings clause of 42 USC § 5409(c) preclude the Court from granting the Defendants' motions for summary judgment when despite the legislative history which established that it was is [sic] HUD's intention that federal standards preempt State and local formaldehyde standards in accordance with 42 USC § 5403(d)?
By order entered January 22, 2009, this Court agreed to review the preemption issues raised.
Whenever a Federal manufactured home construction and safety standard established under this chapter is in effect, no State or political subdivision of a State shall have any authority either to establish, or to continue in effect, with respect to any manufactured home covered, any standard regarding the construction or safety applicable to the same aspect of performance of such manufactured home which is not identical to the Federal manufactured home construction and safety standard. Federal preemption under this subsection shall be broadly and liberally construed to ensure that disparate State or local requirements or standards do not affect the uniformity and comprehensiveness of the standards promulgated under this section nor the Federal superintendence of the manufactured housing industry as established by this chapter. Subject to section 5404 of this title, there is reserved to each State the right to establish standards for the stabilizing and support systems of manufactured homes sited within that State, and for the foundations on which manufactured homes sited within that State are installed, and the right to enforce compliance with such standards, except that such standards shall be consistent with the purposes of this chapter and shall be consistent with the design of the manufacturer.
The second preemption related provision of the MHA is found in 42 U.S.C. § 5409(c) (hereinafter referred to as the savings clause) and states: Compliance with any Federal manufactured home construction or safety standard issued under this chapter does not exempt any person from any liability under common law. Emphasis added.
When the United States Supreme Court was faced with similar conflicting clauses in the National Traffic and Motor Vehicle Safety Act (See footnote 9) in Geier v. American Honda Motor Co., Inc., 529 U.S. 861 (2000), it concluded that both clauses needed to be given effect in deference to congressional intent. Following this course, the Supreme Court in Geier found that due to the presence of a saving clause that the language of the supremacy clause before it had to be narrowly read so as to preempt only state statutes and regulations which were not identical to a federal standard stated in the motor vehicle safety statute or rules promulgated thereunder.
We see no cause to apply different reasoning in our consideration of the supremacy and saving clauses of the MHA. The express terms of the supremacy clause only preempt states and their political subdivisions from having manufactured home standards which are not identical to a federal standard applicable to the same aspect of performance. The issue raised in the pending suit does not involve such conflicting state standards but rather asserts a claim based upon common law negligence. The savings clause of the MHA makes it clear that the congressional intent was not to explicitly preclude common law suits. Courts in other jurisdictions, while considering formaldehyde based claims involving manufactured homes, have likewise found that common law suits are not expressly preempted by the MHA. See, e.g. In re: FEMA Trailer Formaldehyde Products Liability Litigation, 620 F.Supp.2d 755 (E.D. La. 2009); Shorter v. Champion Home Builders Co., 776 F. Supp. 333 (N.D. Ohio 1991; Richard v. Fleetwood Enterprises, Inc., 4 F.Supp.2d 650 (E.D.Tex. 1998); Mizner v. North River Homes, Inc., 913 S.W.2d 23 (Mo. App. E. D. 1995).
Skyline argues that even if the MHA does not expressly preempt state jurisdiction of all manufactured housing construction and safety issues, it was the intent of Congress that state jurisdiction be limited to matters for which there is no HUD standard. (See footnote 10) Indeed, the presence of an express preemption provision does not, by itself, foreclose an implied preemption analysis. The presence of a saving clause does not eliminate the possibility that some common law actions may still be preempted under a federal Act when implied preemption principles are applied. Geier, 529 U.S. at 869. We proceed to consider whether the Harrisons' claim is impliedly preempted either on the basis of field or conflict preemption.
B. Implied Preemption
1. Field Preemption
Where states have traditionally regulated conduct in a given area, field preemption may only be founded on clear and manifest congressional intent to alter that tradition and occupy the field. English v. General Electric Co., 496 U.S. 72, 79 (1990). The Harrisons pending claim against Skyline is for the negligent manufacture of their home. The alleged negligent act committed by Skyline is leaving waste materials from formaldehyde treated particleboard or plywood panels in the heating ducts while installing the treated panels as floor decking in the home. The Harrisons' maintain that the waste materials from particleboard or plywood generated an unsafe level of formaldehyde in the manufactured home when heated. Negligent conduct historically has been regulated by state common law. Richard v. Fleetwood Enterprises, Inc., 4 F.Supp.2d at 657; see also In re: FEMA Trailer Formaldehyde Products Liability Litigation. As previously established, manifestation of congressional intent in the MHA regarding conflicts with state law is contained in the supremacy and saving clauses. The MHA supremacy clause provides that the standards in the Act are supreme over any standard that state law may impose (42 U.S.C. 5403(d)), and the saving clause provides that common law liability can attach in spite of compliance with federal standards (42 U.S.C. 5409(c)). Accordingly, we find no clear manifestation of congressional intent to occupy the field of regulation of formaldehyde usage in manufactured housing so as to preempt all state common law causes of action involving formaldehyde.
2. Conflict Preemption
As noted previously, conflict preemption may exist under two circumstances: (1) when federal and state regulations conflict and compliance with both is physically impossible, or (2) when state involvement would be an obstacle to accomplishing congressional objectives.
No state regulation is at play in the pending case, and no one has argued that it would be impossible to comply with both a common law standard governing disposal of formaldehyde treated waste products and the federal formaldehyde emissions standard. Instead, Skyline's argument advocating implied preemption focuses on the suit being an obstacle to achieving the purposes of the MHA as set forth in the Act. (See footnote 11) Skyline asserts in its brief that the legislative history of the MHA indicates the intent of Congress to limit state involvement as shown by the following excerpt from a U.S. Senate Report: 'States would be permitted to retain jurisdiction under State law over a mobile home safety issue where there is no HUD standard.' [S.Rep.No. 93-693, 93rd Cong., 2d Sess. (1974) reprinted in 1974 U.S.C.C.A.N. 4273,] 4279. Skyline also notes that 24 C.F.R. 3282.11(d) promulgated pursuant to the MHA by HUD explicitly reflects the congressional desire for preemption of any state action which conflicts with federal oversight of the provisions of the MHA:
No State or locality may establish or enforce any rule or regulation or take any action that stands as an obstacle to the accomplishments and execution of the full purposes and objectives of Congress. The test of whether a State rule or action is valid or must give way is whether the State rule can be enforced or the action taken without impairing the Federal superintendence of the manufactured home industry as established by the Act.
We are not convinced that either or both of these pieces of information lead to the conclusion that Congress intended to remove all matters related to formaldehyde emissions in manufactured homes from the purview of the States. The Senate Report appears to do no more than make clear that, in addition to being permitted under the MHA supremacy clause to set manufactured home standards identical to federal standards, States are free to establish manufactured home standards to address issues not covered by HUD regulation. It is merely a restatement of the express provision of the MHA that Nothing in this chapter shall prevent any State agency or court from asserting jurisdiction under State law over any manufactured home construction or safety issue with respect to which no Federal manufactured home construction and safety standard has been established pursuant to the provisions of section 5403 of this title. 42 U.S.C. 5422(a).
As to the significance of the cited preemption language in the HUD regulations to our deliberations in the present case, this Court has recognized that a federal agency regulation with the force of law can preempt conflicting state requirements. Syl. Pt. 8, Morgan, 224 W.Va. at ___, 680 S.E.2d at 80. In such cases, however, courts do not determine whether preemption exists based upon the bald statement of preemption in a federal regulation, but rather by examining the substance of the relevant state and federal law to determine if a conflict does exists. Id. The specific question before us then is whether allowing a suit of common law negligence to proceed in State court would be an obstacle to accomplishing congressional objectives (See footnote 12) of producing manufactured homes in an affordable, uniform and safe manner.
The amicus curiae asserts that the HUD formaldehyde emissions standard applicable to the manufactured home industry promulgated pursuant to the provisions of the MHA squarely conflicts with the ambient air standards the Harrisons want to use to establish their negligence claim. The HUD standard is a product standard rather than an ambient air standard. The product standard requires that the particleboard or plywood panels manufactured for installation in manufactured homes must meet certain emission standards before the panels may in turn be used in the construction of manufactured homes. See 24 C.F.R. § 3280.308. It is further maintained in the amicus brief that HUD had considered an ambient air standard in formulating the emission standard. An ambient air test would require testing of the home after the panels were installed and the home is completely assembled. As explained in the amicus brief, HUD clearly rejected an ambient air standard as the industry standard. HUD represented that the product standard was adopted because the product standard is an effective measure of formaldehyde emission levels, involves a readily available test method and has the potential to prevent formaldehyde problems before homes were sold. The amicus curiae urges us to find that the Harrisons formaldehyde based claim is preempted under the provisions of the supremacy clause and the purposes of the MHA because the Harrisons want to use an ambient air standard to argue their formaldehyde based negligence claim when ambient air standards are not identical to the HUD product standard.
The Harrisons assert that their suit poses no challenge to the established HUD standard. Instead, they filed the formaldehyde based negligence claim seeking to establish construction standards for manufactured homes for which no HUD regulations exist. The Harrisons maintain that Skyline was negligent by leaving waste materials from formaldehyde treated panels in the heating ducts of their manufactured home, which generated an unsafe formaldehyde level in the air. Proper disposal of formaldehyde waste materials is an activity for which HUD has no standard. The Harrisons say they wish to introduce ambient air samples in their case not to prove a flaw in the way the treated panels themselves were manufactured, but to establish a standard for proper disposal of formaldehyde treated waste materials. Consequently their suit does not conflict with the supremacy clause or any of the stated objectives or purposes of the MHA. The Harrisons claim that their suit actually furthers the purpose of the act by promoting safety in the manufacture of the homes.
There are relatively few cases which address the issue of whether common law claims for injuries caused by formaldehyde emissions in manufactured homes are impliedly preempted under the MHA. Some of these cases involve issues not present in the case before us. (See footnote 13) The lower court's October 10, 2007, order in which Skyline's motion for summary judgment of the Harrisons' formaldehyde based negligence claim on preemption grounds was denied, cited to the cases of Shorter v. Champion Home Builders Company and Mizner v. North River Homes, Inc. for support of its conclusion without providing any reasons for reliance on these decisions. Skyline suggests instead that the decisions in In re: FEMA Trailer Formaldehyde Products Liability Litigation and Macmillan v. Redman Homes, Inc., 818 S.W.2d 87 (Tex. App. San Antonio Dist. 1991), provide the more reasoned
analysis. Having carefully reviewed these cases, we find that none of them concern claims comparable to the Harrisons' of seeking to establish a standard of performance in an area which HUD has not promulgated regulatory standards pursuant to the MHA. Instead, the focus of these cases are tort claims which pose a direct challenge to the formaldehyde emission standard established by HUD. We do, however, find that the discussion in Macmillan sheds some light on our current inquiry.
Macmillan involved wrongful death and personal injury suits against companies that manufactured and repaired a manufactured home. The plaintiffs did not allege any failure to conform with the federally prescribed product standard, yet they did contend that the ambient air inside the home contained unsafe levels of formaldehyde. The action was viewed as a direct challenge to the HUD product standard for formaldehyde emissions in that the plaintiffs were asserting the manufacturers of the home were negligent by failing to meet an ambient air standard which HUD had rejected as the federal formaldehyde emission standard. Holding that the MHA preempts state court jurisdiction to litigate safety issues governed by an existing MHA formaldehyde standard, the court in Macmillan also recognized by referencing the provisions of 42 U.S.C. § 5422 that Congress intended to allow state courts assert jurisdiction over manufactured housing safety issues when there is no federal standard on the subject. 818 S.W.2d at 94 (emphasis in original omitted).
The Harrisons common law negligence claim in this case is an attempt to set a performance standard in an area for which HUD has no standard: the proper disposal of formaldehyde treated materials during the manufactured home construction process. We fail to see how such a standard would thwart attainment of the overall objectives of the MHA since it would promote the purpose of protect[ing] the quality, durability, safety and affordability of manufactured homes. 42 U.S.C. 5401(b)(1). Accordingly we conclude that common law negligence claims based on formaldehyde exposure in manufactured homes which seek to establish a standard of performance not covered by the federal Manufactured Home Construction and Safety Standards Act, 42 U.S.C. §§ 5401_ 5426, or regulations promulgated thereunder and which pose no challenge to the federally established formaldehyde emission standards, 24 C.F.R. §§ 3280.308 and 3280.309, are not subject to preemption.
Given the nature of the standard the Harrisons are seeking to establish through pursuit of their claim, we see no reason why results of ambient air tests would be generally barred as evidence in the case. We are not persuaded that HUD's rejection of an ambient air standard necessarily precludes allowing the use of ambient air levels as evidence in a case where no direct challenge to HUD's formaldehyde emissions standard is made. This Court was apprised during oral argument that after panels meeting HUD's product standard are installed in a manufactured home the measure of formaldehyde emissions is made by ambient air tests. Proof of conformance with the product standard thus would provide no meaningful information in a suit trying to establish that a building design or construction method is faulty when evidence of these flaws are not manifested until after the panels meeting the product standard are installed. Consequently, we hold that ambient air testing for the presence of formaldehyde in wood products used in the construction of a manufactured home built in accordance with the provisions of the federal Manufactured Home Construction and Safety Standards Act, 42 U.S.C. §§ 5401_ 5426, is admissible as evidence in a common law negligence action seeking to establish a standard of performance not covered by the Act or associated regulations as long as the tests are not used to challenge to the formaldehyde emission levels established under the Act. Naturally, the decision regarding admissibility of evidence at trial is left to the sound discretion of the court. As we have clearly indicated, 'The West Virginia Rules of Evidence . . . allocate significant discretion to the trial court in making evidentiary . . . rulings. Thus, rulings on the admission of evidence [in a given case] . . . are committed to the discretion of the trial court. . . .' Syl. Pt. 1, in part, McDougal v. McCammon, 193 W.Va. 229, 455 S.E.2d 788 (1995). Syl. Pt. 9, in part, Tudor v. Charleston Area Medical Center, Inc., 203 W.Va. 111, 506 S.E.2d 554 (1997).
1. Did Congress intend to preempt common law negligence claims based on formaldehyde exposure in manufactured homes which seek to establish a standard of performance not covered by the federal Manufactured Home Construction and Safety Standards Act,42 U.S.C. §§ 5401_ 5426, or regulations promulgated thereunder and which pose no challenge to the federally established formaldehyde emission standards, 24 C.F.R. §§ 3280.308 and 3280.309?
2. Is ambient air testing for the presence of formaldehyde in wood products used in the construction of a manufactured home built in accordance with the provisions of the federal Manufactured Home Construction and Safety Standards Act, 42 U.S.C. §§ 5401_ 5426 admissible as evidence in a common law negligence action seeking to establish a standard of performance not covered by the Act or associated regulations when the regulatory agency responsible for carrying out the federal Act rejected the use of ambient air standards as the measure of acceptable formaldehyde emission levels for certain wood products installed in such homes?