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Guardrail Manufacturer to Pay $663 Million in Judgment and Penalties in False Claims Act Case

June 29, 2015 — Trinity Industries, a Texas based company, manufactures guardrails for installation on roadways across the United States. Pursuant to a contract with the National Highway Traffic Safety Administration (“NHTSA”), Trinity was commissioned to design, manufacture, and install guardrails on interstate networks throughout several states.
Trinity Unilaterally Alters the Contract and Provides the Government a Substandard Product
In 2012, Josh Harman brought a lawsuit on behalf of the United States against the company under the False Claims Act (“FCA”). Harman is a former competitor of Trinity’s, who settled claims with the company that he infringed on its patents. In the FCA suit, Harman alleged that Trinity submitted plans for its guardrail system, the ET-Plus, to the NHTSA, where they were approved for manufacture and installation. After Trinity’s plans were approved, the company determined it could save millions of dollars by “shaving off” a small part of the guardrail. Trinity never submitted these new plans to NHTSA for a safety evaluation and decided unilaterally to install the altered version on its own. When a contractor sells or provides the government with a product that is different from what is promised, it becomes a breach of contract. Unfortunately, the redesigned guardrail systems appear to be less capable of absorbing an impact and actually tend to penetrate the vehicle, resulting in severe injuries and, in some circumstances, death of the driver or passengers.
In October 2014, a jury found the company liable for defrauding the government and awarded $175 million in damages, which was then trebled as allowed under the False Claims Act, to total $525 million. This month, a judge ordered Trinity to pay additional civil penalties of $138 million, equaling $8,250 for each 16,771 false certifications made by Trinity to the government to obtain payment for the defective guardrails. An additional $19 million in lawyers’ fees and expenses was awarded to Mr. Harman’s legal team. Judge Gilstrap of the United States District Court wrote that the plaintiffs had “introduced substantial evidence [that Trinity] made the decision to modify the ET-Plus, conceal such modifications, and falsely certify that the ET-Plus units had been accepted” by the government.
Mr. Harman was awarded 30% of the award, or about $199 million. This share was awarded because, as the judge wrote, “the U.S. government opted not to participate in the trial of this case and left the full burden” on Mr. Harman. In a phone interview, Mr. Harman stated that his goal in this case was not to make money, but for Trinity’s ET-Plus system to be recalled. In this interview, he stated “people are dying.”
After the jury verdict last year, dozens of states banned the ET-Plus guardrail system, and Trinity temporarily halted sales of the guardrails. In addition, at least 14 lawsuits have been filed blaming the guardrails for causing injuries in crashes and five deaths.

Contact Waters & Kraus to Report Misconduct by a Government Contractor

While Waters & Kraus is not handling this particular False Claims Act case, we are representing whistleblowers in similar lawsuits. If you have comparable claims against a different government contractor, contact us by email, or call our qui tam attorneys at 800.226.9880 to learn more about our practice and how we can work together to notify the government about fraudulent abuses by government contractors. Anne Izzo and Paul Lawrence, two of the firm’s qui tam attorneys, protect tipsters throughout the whistleblower lawsuit process.

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