The Fifth Circuit Court of Appeals has denied a mandamus petition from Trinity Industries Inc. The court was asked to vacate a lower court’s $175 million judgment in a False Claims Act (FCA) suit accusing Trinity of selling dangerous guardrails to the U.S. Federal Highway Administration (FHWA). In the underlying suit, decided in October, a $175 million verdict was returned against Trinity. The jury found the company liable for making alterations to the guardrails after a previous design without the changes was approved by the FHWA, then allegedly misrepresenting those changes as the same approved version despite being more dangerous.
In its petition, Trinity argued in part that Texas’ Eastern District Court abused its discretion in permitting the FCA claim because the FHWA found that the guardrail still qualified for federal reimbursement. This is the second attempt by Trinity to have the Fifth Circuit overturn the ruling on the grounds that the FCA claims were improper. The appeals court denied the previous petition for review, calling it a “close call” and issued guidance for the lower court, the brief said. Trinity said in its brief: “In light of subsequent events, including the district court’s disregard of this Court’s guidance, the call is no longer close.”
The Fifth Circuit apparently disagreed since the petition was denied without opinion. This means the appeal by Trinity will follow its normal course. Harman filed his original FCA complaint in 2012, alleging that Trinity falsely claimed its modified ET-Plus guardrail was properly crash-tested. The original ET-Plus was designed to absorb and dissipate a collision’s impact by flattening the guardrail and pushing it out into a ribbon that is deflected away from the collision, reducing the impact force felt inside a crashing vehicle. The FHWA approved that device in 2000. But in his complaint, Harman said the company changed that design sometime between 2002 and 2005, and that the new design locks up, folds over and protrudes into the crashing vehicle. Harman said Trinity never disclosed those changes to the FHWA, nor did it test the units according to FHWA protocols. While the FHWA partially approved the guardrails after a 2005 crash test, it’s unclear whether Trinity used the new ET-Plus for the test.
Earlier this year, U.S. District Judge Rodney Gilstrap declared a mistrial after issues were raised over whether Trinity President Gregg Mitchell tried to intimidate with a witness, by allegedly telling a University of Alabama professor that he would smear anyone who testified against him. The jury reached its verdict on Oct. 20, after hearing four days of evidence. The company faces the possibility of treble damages and statutory penalties, which would make the total amount as due as high as $700 million. In a separate Fifth Circuit appeal, Trinity asked the panel to not allow the Center for Auto Safety to intervene in the suit because the district court has already agreed to evaluate whether to unseal documents the lobbying group requested. That appeal was still pending at press time.
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