A company manufacturing guardrails lining highways in California and across the country has been ordered to pay $663 million in damages and penalties for defrauding the federal government, according to a judge’s ruling out of the federal whistleblower case in Texas.
Trinity Industries, a highway manufacturing heavyweight based in Texas, has been accused in lawsuits and complaints across the country for making a change to a widely used version of its guardrail end terminals, the ET-Plus.
The changes cause the guardrail to perform improperly, according to the lawsuits.
Click here for more about the controversy surrounding the ET-Plus.
In an October jury verdict, Trinity was ordered to pay $175 million for defrauding the federal government by making false statements about the changes it made to the ET-Plus 10 years ago.
Tuesday, U.S. District Court Judge for the Eastern District of Texas, Rodney Gilstrap, ordered Trinity to pay $525 million in damages and $138 million in penalties. The penalties result from the more 16,000 “false certifications” the guardrail company made.
Click here to read the complete judgment.
Trinity Spokesperson Jeff Eller said, "We believe the evidence clearly shows that no fraud was committed."
Click here to read the complete statement from Trinity.
The judgment is in favor of Josh Harman, the whistleblower in the federal case brought under the False Claims Act. Harman is a competitor of Trinity who alerted the FHWA to changes made to the ET-Plus.
According to the Harman and other lawsuits across the country, instead of passing through the terminal chute and pigtailing out the side, away from the vehicle, the metal railing of the guardrail jams up inside the chute. The metal then sometimes pierces through a vehicle like a spear, cutting through cars and sometimes the people inside.
Harman was awarded 30 percent of the damages in Tuesdays judgment. An amount totaling close to $200 million. Harman is also set to receive more than $16 million in attorneys’ fees.
The federal government will receive the rest of the money, about $463 million.
The Federal Highway Administration is the federal agency responsible for approving which highway safety materials are eligible for federal reimbursement and states look to for which products are approved for use on their highways.
In previous statements the department has said the ET-Plus remains eligible for federal reimbursement.
In an email, Jane Mellow with the FHWA, said, “The Federal Highway Administration will evaluate the judge’s opinion issued today in the fraud case against Trinity.”
The FHWA ordered the Dallas-based company to retest the ET-Plus earlier this year. In those tests the highway safety product met all crash test criteria, a U.S. Department of Transportation Federal Highway Administration official said.
Click here for more on the crash testing results.
It is estimated there are 200,000 of the guardrail end terminals on roadways across the country.
The California Department of Transportation is in the process of taking a complete inventory of how many units are on state roadways, according to Matt Rocco, Caltrans Public Affairs Chief.
In May, Trinity received a subpoena from the federal government.
According to a United States Securities and Exchange Commission report, “Trinity Industries received a subpoena from the U.S. Department of Justice through the U.S. Attorney for the District Of Massachusetts.”
The DOJ is requesting documents from 1999 through the present relating to its ”ET-2000 and ET-Plus guardrail end-terminal products.”
Click here to read the full SEC report.