Trinity Industries to pay $175M for making false claims to highway department

By Marilyn Tennissen | Oct 21, 2014

After exposing what he said were false claims to the federal government, a whistleblower has won a $175 million lawsuit against a Texas manufacturer.

Whistleblower Josh Harman brought a qui tam suit against Trinity Industries Inc., claiming the company made false claims to federal regulators when it changed the design of its guardrail end caps used on the nation’s highways.

A federal jury in Marshall agreed with Harman, and ordered Trinity Industries to pay $175 million.

Harman claimed Trinity redesigned its ET-Plus guardrail end cap piece in 2005 in a way that made them unsafe. According to suits against Trinity, at least a dozen accidents have been reported involving vehicles that run off the road and hit the Trinity guardrail end caps.

The product at the center of the case is called ET-Plus and was designed by Texas A&M University engineers at the Texas Transportation Institute.

The energy-absorbing cap is placed on the ends of highway guardrail segments so that the rails collapse away from an oncoming vehicle during a crash.

State highway departments all over the country, including in Texas, have used the rails for years. Because most interstate highway construction is paid for by federal funds, the departments get reimbursement from the Federal Highway Administration for purchases of the ET-Plus.

But complaints have claimed the device malfunctions and allows the guard rail to actually pierce the vehicle. At least one fatality has been blamed on the end caps.

The Federal Highway Administration approved the guardrail changes after reviewing two crash tests conducted by the Texas A&M Transportation Institute.

Harman, a Virginia guardrail installer, sued Trinity in 2012 on behalf of the government under the qui tam provisions of the False Claims Act. The provisions let whistleblowers sue companies for allegedly fraudulent acts that are harmful to the government.

According to the lawsuit, sometime between 2002 and 2005, Trinity reduced the size of the ET Plus feeder channel from 5 inches wide to 4.  Harman says because of the shrunken internal dimensions of the feeder chute, the guardrail often gets stuck inside the ET-Plus guide chute.

He claims Trinity used to market its end terminals to the government as being re-usable, but after shrinking the dimensions, it is not likely a terminal can be salvaged after a crash, giving Trinity an opportunity to sell a new end cap terminal.

Harman’s attorney, Nick Gravante of Boies Schiller Flexner, said he was pleased the jury “saw the plain truth” that the Federal Highway Administration “has clearly been defrauded.”

“That fraud has exacted the ultimate toll in claiming lives of those unnecessarily endangered by Trinity’s secretly modified guardrail end terminals,” he said in a press release.

Trinity has denied wrongdoing in the cases and previously said it has a “high degree of confidence in the performance and integrity” of its ET-Plus guardrail ends.

In a statement, a spokesperson for Trinity Industries said she believes the decision “cannot and will not withstand legal scrutiny.”

The case has been fraught with problems since it began. Presiding Judge Rodney Gilstrap declared a mistrial in July

He also dismissed a jury that had heard several days of arguments after allegations that a Trinity official was allegedly trying to intimidate a witness, Dean Sicking, a University of Alabama in Birmingham professor.

Sicking invented previous highway guardrail end models and led a study into the Trinity models. His study found Trinity’s ET-Plus models were nearly three times more likely to be involved in a fatal crash than a previous model of the guardrail end called the ET-2000.

The federal False Claims Act states that a guilty party will pay three times whatever damages are proved at trial, plus in many cases attorneys fees and additional fines that Harman’s lawyers say could top $200 million. The total levied against Trinity could reach $1 billion. 


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