Guardrail Company Ordered to Pay $663 Million in Fraud Case
MARSHALL , Texas, June 10 (UPI) — Trinity Industries, the maker of a controversial highway guardrail system linked to at least nine deaths across the country, was ordered to pay $663 million for defrauding the U.S. government.
The decision by U.S. District Judge Rodney Gilstrap on Tuesday instructs Trinity to pay $525 million in damages as well as $138 million in penalties. In October, jurors concluded Trinity cheated the government by selling its ET-Plus guardrail system without disclosing design alterations to the Federal Highway Administration. Gilstrap wrote the plaintiffs had “introduced substantial evidence” showing 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 highway agency.
The judgement stems from a whistle-blower lawsuit filed by Josh Harman, a competitor who discovered Trinity had made changes to the guardrail system in 2005 but failed to make the proper notifications. The jury initially awarded $175 million, but it was tripled to $525 million under the False Claims Act. In addition some $19 million in lawyers fees and expenses were awarded to Harman’s legal team. Harman was awarded 30 percent, or about $199 million, of the award.
Trinity spokesman Jeff Eller, said the company felt that “no fraud was committed” and may appeal.
“The judgment is erroneous and should be reversed in its entirety,” he said.
After the jury verdict last year, dozens of states banned ET-plus, and Trinity temporarily halted sales of the guardrails. At least 14 lawsuits blame the guardrails for injuries and deaths.
The ruling comes as federal prosecutors in Boston look into the relationship between Trinity and the highway administration, which reviews safety tests of highway devices.
