Whistleblower stands to recover 30% from $525 million Texas jury verdict over highway guardrails fraud case

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by Jay Pate

Ruling in favor of a whistleblower, a federal jury in Marshall, Texas has ordered Trinity Industries to pay $175 million in damages for defrauding the government regarding guardrails that have been installed throughout the country. The case was brought under the False Claims Act by Joshua Harman, who discovered that the company made changes in 2005 to the guardrail system without telling the Federal Highway Administration.

Under the terms of the False Claims Act, the damages will be tripled by the court to $525 million. As a whistleblower who filed and pursued the lawsuit for the benefit of the government, Harman is entitled to recover up to 30 percent of that amount.

The case centered around the ET-Plus, a cap on the end of highway guardrails that is designed to give way during a crash, absorbing energy to slow the oncoming car. Harman discovered that 2005 Trinity made changes to the ET-Plus around 2005 that not only lowered Trinity’s manufacturing costs for each unit but also made the system more difficult to reuse after accident thus requiring states to purchase new ones. Harman alleged the changes rendered the guardrail system more dangerous than the original version and that the changes were significant enough that the federal government should have been told about them.

The lawsuit charged that Trinity changed certain dimensions of the ET-Plus sometime between 2002 and 2005 without telling federal authorities. As a result of the changes, rather than behaving like a shock absorber to cushion the impact of an oncoming car, the redesigned ET-Plus locks up and behaves more a like giant shiv that can penetrate a car during a crash, according to the suit. At least fourteen lawsuits separate from Harman’s whistleblower action have been filed against Trinity, blaming the redesigned guardrails for five deaths and several injuries.

The jury in Harman’s lawsuit ruled that Trinity “knowingly made, used or caused to be made or used a false record or statement material to a false or fraudulent claim” to the federal government. In short, Trinity should have informed the government about the changes it made to ET-Plus. Accordingly, the federal government was duped into paying for guard rails that were not the same as the guardrails the government was led to believe it was buying.

Get Help With Your Whistleblower Lawsuit

The lawyers at Heygood, Orr & Pearson represent clients who have witnessed fraud first-hand and wish to file a “qui tam” or whistleblower lawsuit against the corporations or individuals who were responsible. For example, our lawyers successfully negotiated a $1.75 million award for a whistleblower in a large tax fraud case.

To encourage private citizens to come forward with information regarding fraud against the government, the False Claims Act provides significant financial incentives. Billions have been recovered as a result of False Claims Act lawsuits, and hundreds of millions have been paid to the private citizens who below the whistler and made those recoveries possible.

The “whistleblower” (called a “relator”) does not have to have been personally harmed at all. The relator just needs to be aware of the false or fraudulent conduct. Anyone who has information that a business or person has knowingly submitted a fraudulent claim to any branch of the government can potentially help file and pursue a lawsuit under the False Claims Act. If money is recovered from a settlement or from a court judgment, the whistleblower who helped initiate the lawsuit can potentially recover 10% to 30% of the total amount recovered.

The attorneys at Heygood, Orr & Pearson have the experience, expertise, and resources to handle even the most complex claims under the False Claims Act. Our firm is AV-rated, the highest legal and ethical rating available from the leading law firm rating service. Our partners Michael Heygood, Jim Orr, and Eric Pearson are all Board Certified in Personal Injury Trial Law by the Texas Board of Legal Specialization. Mr. Heygood and Mr. Orr are additionally Board Certified in Civil Trial Advocacy Law by the National Board of Trial Advocacy. Our partners been voted by their peers as “Super Lawyers” in the state of Texas for several years in a row.*

If you have questions about how to pursue a claim under the False Claims Act, please let us know. You can reach us by calling our toll-free hotline at 1-877-446-9001, or by filling out our free legal consultation form on this website.

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* Michael Heygood, James Craig Orr, Jr. and Eric Pearson were selected to the Super Lawyers List, a Thomson Reuters publication, for the years 2003 through 2014.