Trinity Industries Inc. is set to defend itself a second time at trial against $1 billion in claims that its highway guardrail systems lock up and puncture cars on impact — sometimes with fatal consequences.
Joshua Harman, a self-described safety advocate from Swords Creek, Virginia, accuses Trinity in the whistleblower lawsuit of secretly changing the design of one of its products to save on manufacturing costs.
The trial set for this week is a redo after U.S. District Judge Rodney Gilstrap in Marshall, Texas, declared a mistrial in July with only a few hours of testimony remaining in the case. The judge based that decision partly on “serious concerns” over a company official’s truthfulness while under oath, according to a court order.
Harman, 45, claimed that Trinity modified what’s called an energy-absorbing end terminal, a steel fixture mounted on the end of a guardrail to cushion the impact of a crashing car, without telling federal authorities. Instead of acting like a shock absorber, the revised version jams up and behaves more like a giant spear, according to Harman.
The federal government helps state transportation departments purchase approved highway products, including Trinity’s end terminal. Harman’s lawsuit, filed on behalf of the federal government, claims Trinity submitted false claims for payment to the U.S. by passing off the modified unit as being eligible for federal money.
Harman’s lawsuit is “false and misleading,” Jack Todd, a Trinity spokesman, said in an e-mailed statement. The company has “a high degree of confidence in the performance and integrity” of its ET-Plus end terminal, and it remains accepted for use by the Federal Highway Administration, Todd said.
In a regulatory filing in July, Trinity cited Harman’s estimate of liability for the company at about $775.7 million, not including attorneys’ fees, costs and interest. Up to $1 billion could be at stake in the case, a company lawyer said in May. Harman stands to gain as much as a third of any judgment.
Trinity, whose net income more than quintupled to $375.5 million last year from 2010, has said in regulatory filings that it doesn’t believe a loss is probable in Harman’s litigation.
Bloomberg News first investigated the legal fight — along with several related personal-injury and wrongful-death suits pending against the company — in June.
Each side will have 13 hours to present evidence to the jury, which means the trial could conclude within a week, Nicholas Gravante Jr., a lawyer with Boies, Schiller & Flexner LLP who is helping to represent Harman, said in an e-mail.
In September, Missouri and Massachusetts rescinded approval for Trinity’s ET-Plus end terminal, citing safety concerns and banning its use. Both states did so partly because of a study of multiple end terminal models that found the ET-Plus was 2.86 times more likely to be involved in a fatal crash than Trinity’s earlier ET-2000 model. The study didn’t address whether there were different versions of the ET-Plus terminals along highways, as alleged in Harman’s lawsuit.
The study, released last month and conducted by the University of Alabama at Birmingham, examined several years of accident data in Missouri and Ohio. There are 20,000 to 30,000 end terminals installed along Missouri highways, and the ET-Plus is the most commonly used one, said Holly Dentner, a spokeswoman for the state’s transportation department.
In January, Nevada removed the ET-Plus from its list of approved products because of Trinity’s failure to disclose changes to it, said Meg Ragonese, a spokeswoman for the state’s department of transportation. The outcome of the whistle-blower lawsuit — along with safety reviews and product feedback — will factor into the state’s final decision on whether to re- approve the product, Ragonese said.
“We are carefully watching that legal process,” she said.
The case is Joshua Harman, on behalf of the U.S. v. Trinity Industries Inc., 2:12-cv-00089, U.S. District Court, Eastern District of Texas (Marshall).
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