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November 7, 2014 Contractor Fraud

UPDATE: Trinity President Admits Material Omissions in Guardrail Safety Case

As we have steadily reported over the past several months, guardrail manufacturer Trinity Highway Products has undergone intense scrutiny, a mistrial, and a $175 million verdict for installing highway guardrails that did not comport with previously-submitted designs approved by federal authorities. In addition to the dozens of personal injury and wrongful death actions pending against the company, it was also found liable under the False Claims Act following a highly-publicized, contentious trial in U.S. District Court. As details of the trial emerge, trial transcripts reveal that the company’s president, Gregory Mitchell, failed to reveal any information concerning changes to its guardrail products to state safety officials–and even misrepresented vital information to the State of Vermont in 2006.

Details of Trinity’s wrongful omissions

State and federal authorities have an ongoing duty to maintain and update highways and interstates in order to protect travelers from unnecessary harm and injury. Because of this duty, contractors must submit their design plans for approval well before installing or constructing any apparatus that could directly impact motorists’ safety. Once a design is approved, it may not be altered or changed in any way without subsequent approval.

During his testimony in the False Claims Act trial, Mitchell stated that he did not tell authorities from a single state that his company had materially altered the design of its safety guardrail–stating that his company “inadvertently omitted” the fact that a design component had been changed from a five-inch width to a four-inch width–an alteration blamed in over 20 pending injury cases.

Despite having knowledge of the design change, Mitchell continued to confirm to state officials that the design had not changed. In a letter to Vermont safety regulators in 2006, Trinity stated that its guardrail design was “identical” to the approved design. In a letter to Florida officials, the company actually stated that the guardrail design had “gone through no major design changes.” With regard to this communication, Mitchell testified that he did not believe the design change could be described as “major.”

This testimony occurred on the same day the Commonwealth of Virginia ordered highway engineers to cease installation of Trinity’s ET-Plus System – the fourth state to do so after Massachusetts, Missouri, and Nevada.

Implications of Trinity’s misrepresentations

The federal government regularly provides large reimbursements to states for the installation of approved guardrail designs, manufactured to increase traveler safety in the event of an impact. States generally initiate contracts with firms like Trinity for the installation of these safety systems and thereafter submit requests for reimbursement. At the heart of the government’s claims against Trinity is the assertion that Trinity violated the False Claims Act by deviating from the approved design and billing the states for the unapproved guardrail system.

Trinity is facing a $175 million verdict rendered by a jury sitting in the U.S. District Court for the Eastern District of Texas. Under the treble damages clause of the False Claims Act, this amount could triple, topping over half of a billion dollars.

Contact Berger Montague today

If you are aware of fraud under a government contract and would like to discuss your information with a confidential whistleblower attorney, please contact Berger Montague today.