Over the past several months, we have steadily reported on the plight of Texas-based Trinity Industries, manufacturer of – among other things – guardrails for installation on roadways across the United States. Pursuant to a lucrative contract with the National Highway Traffic Safety Administration (NHTSA), the company was tasked with designing, manufacturing, and installing guardrails on interstate networks in several states. From there, Trinity’s problems only continued to grow, including the most recent imposition of a $663 million fine by a federal judge in light of the company’s alleged misconduct during the design and approval stage of the contract negotiation process.
Trinity is alleged to have submitted plans for its guardrail system to the NHTSA, which were approved for manufacture and installation. Allegedly, the company figured it could save several million dollars by essentially “shaving off” a small part of the guardrail, thereby saving in costs and maximizing profits. Problem was, Trinity never resubmitted its new plans to NHTSA for a safety evaluation and decided to install the altered version on its own. Unfortunately, the redesigned guardrail systems are believed to be less capable of absorbing impact and actually tend to sever the vehicle, resulting in severe injuries and, in some cases, death of the driver and/or passengers.
The resulting False Claims Act trial was certainly a spectacle, to say the least. Beginning with allegations of witness tampering and threatening behavior, to the first proceeding resulting in a mistrial, the plight of Trinity was as unpredictable as its own products. In the end, however, Trinity was dealt a devastating blow and was ordered to pay a $175 million civil verdict.
Additional fines and penalties roll in
On June 9, 2015, a federal judge entered an order against Trinity Industries requiring it to pay a total $663 million judgment as a result of its misconduct in the guardrail case. The final calculation included the $175 million verdict rendered last year, which was tripled under the treble damages provision of the False Claims Act to $525 million. Then, the judge maximized the penalty powers under the FCA to impose an $8,250 fine per violation and there were 16,771 total false invoices submitted by the company during the guardrail project.
Lastly, the judge ordered the company to pay $19 million for the legal expenses and costs incurred by the whistleblower in the years-long lawsuit.
In the words of Judge Rodney Gilstrap of United States District Court, the evidence was more than sufficient to show that Trinity “made the decision to modify the ET-Plus, conceal such modifications, and falsely certify that the ET-Plus units had been accepted.”
The whistleblower has received $199 million in exchange for his efforts and willingness to come forward.
Contact Berger Montague today
If you are aware of misconduct under a government contract for services, please do not hesitate to contact Berger Montague right away.