Friday, June 12, 2015

Trinity Ordered To Pay Settlement Of $663 Million

Joshua Harman, a Virginian with two small highway safety companies, made a discovery in late 2011 that perhaps only a guardrail maker could: A big competitor had changed the dimensions of its roadside safety device by as much as an inch here and there, he said, without telling federal regulators.

As designed, Trinity Industries Inc.’s ET-Plus system was meant to turn the end of a guardrail into a de facto shock absorber. The altered units, as Harman saw it, were locking up when hit, spearing cars and their occupants.


Harman, 46, spent 3 1/2 years trying to prove his point, driving hundreds of thousands of miles to inspect twisted guardrails at crash sites. In 2012 he sued Trinity, accusing it of hiding the potentially deadly alterations from the Federal Highway Administration. On Tuesday, almost eight months after a Texas jury agreed Trinity had defrauded taxpayers, the judge issued a final penalty: Trinity must pay $663 million, with $199 million of that going to Harman and the rest to the government.

It was one of the largest awards to taxpayers under the U.S. False Claims Act as well as the largest to an individual whistle-blower, said Patrick Burns, co-director of the nonprofit group Taxpayers Against Fraud Education Fund.

Harman, who lost his left leg in a construction accident two decades ago, said he brought the case to raise awareness about a safety risk that he says cost many victims their limbs. At least nine deaths have been linked in personal-injury lawsuits to the ET-Plus.

“I have sacrificed everything I’ve got to facilitate this situation,” Harman said. “With this $663 million judgment, it opens the eyes, hopefully, of the nation.”

Harman, whose guardrail manufacturing company filed for bankruptcy protection in March, may never collect on the award if Trinity, the biggest U.S. maker of highway safety equipment, wins on appeal.

Jeff Eller, a spokesman for Dallas-based Trinity, said in an e-mail that “the judgment is erroneous and should be reversed in its entirety.”

Trinity has said the changes didn’t detract from the safety of its ET-Plus units, which have been successfully tested multiple times. The company, whose shares have fallen 18 percent since the verdict, is defending more than 20 lawsuits over the safety of the ET-Plus.

One day after the October verdict, the FHWA, which evaluates highway devices before declaring them eligible for federal reimbursement, ordered a review of the ET-Plus. The system passed all eight crash tests since then, the agency said in March.

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