A Texas federal judge last month denied a request for a new trial made by Trinity Industries Inc. following the $663 million False Claims Act (FCA) verdict that we wrote about recently. The jury found that Trinity had defrauded the federal government by selling defective guardrails. The trial judge said the company could present new evidence in an appeal. Trinity had argued that the damages award was excessive and that a new trial was warranted given newly discovered evidence that shows the company’s ET Plus guardrail system passed government crash tests. U.S. District Judge Rodney Gilstrap disagreed, saying there was no need for a new trial and that Trinity could pursue an appeal to present the new evidence. The judge wrote in his order:
As to the issues which are not newly raised in this motion, the court has already dealt with these issues in the court’s opinion concerning Trinity’s judgment as a matter of law filed under Rule 50(b). The court declines to address/readdress these issues and instead finds that Trinity’s motion should be and is hereby denied so that this case may proceed to a proper appeal.
The false claims suit was based on claims that went undisputed during the 2014 jury trial, including an allegation that Trinity changed the dimensions of its guardrail system without telling the Federal Highway Administration.
In October, a federal jury returned a $175 million verdict finding Trinity liable for changing the design of the guardrails without getting approval, then misrepresenting them as the earlier, approved version even though they were more dangerous. Judge Gilstrap in June had entered final judgment of $663.4 million against Trinity, including a $199 million commission for whistleblower Joshua Harman. Since the U.S. did not participate in the trial and left the litigation solely to Harman, he was awarded the 30 percent commission and more than $16 million in attorneys’ fees, $2.3 million in expenses and $177,830 in taxable costs, for a total award of more than $217 million. The government was awarded $464.4 million.
According to Trinity’s motion for a new trial, a report examined 1,000 ET-Plus devices installed on roads across the country and found “no evidence” of anything other than federally compliant results. Trinity argues that regardless of FCA allegations, the government received the “benefit of its bargain.” Trinity also argued that Judge Gilstrap’s final judgment — which it called “one of the largest FCA verdicts in history” — is grossly excessive in violation of the Eighth Amendment’s Excessive Fines Clause. Trinity said in its July motion that the company failed to identify the precise number of allegedly defective guardrails the government purchased and instead implemented a misguided formula to come with a figure amounting to “guesswork” and “speculation.”
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