A Texas jury Monday awarded a whistleblower $175 million in his False Claims Act suit against Trinity Industries for faulty guardrails. Under federal law, the award will be trebled to $525 million.
Joshua Harman, a competitor of Trinity, alleged that Trinity changed its guardrail head design in 2005 but didn’t tell the Federal Highway Administration as required.
Trinity sold the guardrails to state governments which in return received federal reimbursement.
The $525 million award will be split between the United States Treasury and Harman.
He discovered the design change during litigation in 2011 and filed a qui tam complaint on behalf of the government.
“We are pleased the jury recognized what has been overlooked for three years,” Nicholas Gravante of Boies, Schiller & Flexner, one of the lawyers representing Harman, told the New York Times.
Trinity said it might appeal. In a statement it said: “Trinity believes the decision cannot and will not withstand legal scrutiny.”
Trinity has said its failure to tell the federal government about the changes to its guardrails was inadvertent.
The rail head or end terminal, the New York Times said, is often marked with yellow and black stripes. It’s supposed to slide along the side of the guardrail if impacted.
Because of Trinity’s redesign, the head sometimes jammed and didn’t slide, some state officials said.
“At least 14 other lawsuits blame the guardrails for five deaths and more injuries,” the NYT said.
Dallas-based Trinity expected to save about $2 on every rail head, according to Harman’s suit.
The U.S. government didn’t join Harman’s False Claims Act case against Trinity.
The Federal Highway Administration said “it learned of the design changes from Harman in 2012 [and] has so far accepted [Trinity’s] explanation about the lack of disclosure.”
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.
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