June 12 (Bloomberg) -- Before dawn on Feb. 23, Darius Williams ran his Nissan Sentra off a North Carolina interstate at 80 miles per hour. A length of guardrail pierced his door, according to the police report, driving the 24-year-old’s body into the opposite back seat.
Three days later, with police attributing the accident to reckless driving and Williams lying in intensive care, a self-described safety expert named Joshua Harman drove past the scene. Spotting debris and the jagged end of a guardrail bending toward the highway, he swerved to a stop.
“The evidence always tells a story,” he said.
Suspecting he knew this story’s ending, he steered his truck to the junkyard where Williams’ Nissan had been towed. Some 10 feet of guardrail, doubled back on itself, skewered the car. Harman pointed his camera toward the bloodied back seat and snapped a picture of a 175-pound piece of steel lodged amid the wreckage. A sticker identified its maker: Trinity Highway Products LLC.
To hear Harman tell it, something has gone seriously wrong with America’s guardrails. With as much as $1 billion possibly at stake, Harman’s tale is one of bad blood, allegations of fraud and wrongful death and regulatory gray areas along the country’s taxpayer-funded highways.
Harman is suing Trinity Highway and its Dallas-based owner, Trinity Industries Inc., alleging that it made quiet design changes that transformed guardrail systems across the U.S. into potentially deadly hazards. His focus is something called an energy-absorbing end terminal: Installed at the end of a guardrail and typically marked with yellow and black stripes, it’s designed to give way when hit, absorbing energy to slow a crashing car.
Trinity, one of the biggest guardrail makers in the U.S., first gained federal approval for its ET-Plus end terminal in 2000. Harman’s suit alleges that the company changed the dimensions of the ET-Plus sometime between 2002 and 2005 without telling federal authorities. Instead of acting like a shock absorber, he claims in the 2012 suit, Trinity’s modified ET-Plus can lock up, behaving more like a giant shiv.
The case is set to go before a jury in July.
Trinity maintains a “high degree of confidence” in the several hundred thousand ET-Plus units it says are installed around the country, spokesman Jack Todd said. Trinity declined to make executives available for interviews.
Trinity’s ET-Plus –- including “all improvement modifications thereafter” -- has met federal requirements since its 2000 debut, according to a company filing for the previous quarter. In 2012, a company representative testified in a different suit that Trinity had made several “cosmetic changes” to the end terminal that didn’t require new approvals because they didn’t hurt its performance.
Trinity fell as much as 1.6 percent today in trading in New York. The shares were down 0.8 percent at $81.52 at 3 p.m. Through yesterday, its shares had risen 51 percent since the beginning of the year. The company’s yearly revenue has more than doubled since 2010, to $4.4 billion last year.
Trinity characterized Harman in court documents as “an opportunistic litigant hoping for a windfall.” He is seeking “to retaliate against Trinity for pursuing a patent-infringement lawsuit against his companies,” it added.
Harman used to make and install guardrails himself. Trinity sued him in 2011 for infringing its patents. Since then, Harman scaled down his private operations, trimmed more than 100 employees -- most of his workforce -- and sought Chapter 11 protection to reorganize his companies.
The 45-year-old Virginian spent more than 300 days on the road last year, away from his wife and two school-age daughters, visiting crash sites to bolster his case against Trinity. The Chevy Silverado he drives has two end terminals in back -- one that he says is Trinity’s original, the other its modified version.
Harman says he’s motivated not by business, but by what he sees as a safety hazard.
“It’s irrelevant if I’m crazy,” he said.
Trinity has sought to get Harman’s whistleblower suit dismissed, arguing he isn’t a whistleblower because he is basing his allegations largely on public information rather than insider knowledge.
U.S. District Judge Rodney Gilstrap in Marshall, Texas, ruled that Harman’s professional experience qualifies him to sue as a whistleblower and dismissed most of Trinity’s other objections.
Lawyers representing whistleblowers typically don’t earn fees unless they win. Harman is represented by Boies, Schiller & Flexner LLP, whose founder, David Boies, is known for taking on the likes of Microsoft Corp. and MasterCard Inc. Boies Schiller lawyers declined to comment on its fee arrangement.
Harman isn’t the only one asking questions. A coalition of state highway officials is reviewing the performance of several end terminal models, motivated in part by complaints about the ET-Plus. Nevada stopped installing ET-Plus terminals in January, pending performance testing of the modified version.
And in May, Safety Research & Strategies Inc., a product-safety advocacy group, filed separate suits seeking records related to the ET-Plus from the Department of Transportation’s Federal Highway Administration and from the Florida Department of Transportation. SRS, based in Rehoboth, Massachusetts, alleges broad “performance anomalies” with the ET-Plus since it was introduced.
Because Trinity’s terminals are approved by the FHWA, state highway departments that buy them are often eligible for federal reimbursements. Under the 2009 stimulus package, the U.S. government reimbursed up to 100 percent of local buyers’ costs for highway projects. Still, the FHWA has no authority to ask states to recall equipment, said Joshua Schank, who runs the Eno Center for Transportation, a nonpartisan think tank.
“If there’s a problem, who’s going to end up being on the hook?” said Sean Kane, SRS’s president and founder.
Neil Gaffney, a spokesman for the FWHA, said the ET-Plus was successfully crash-tested in 2005 and that the agency hasn’t received complaints from states about the units’ performance since then. Dick Kane, a spokesman for the Florida department, said it had produced the requested documents.
Harman, suing to recover taxpayer funds on behalf of the U.S., could take up to about a third of any judgment. His suit potentially presents a “billion dollars’ worth of damages” for Trinity, a lawyer for the company said in a May hearing. In a company filing, Trinity said it doesn’t believe a loss is probable from the litigation.
Eleven of 15 analysts tracked by Bloomberg rate Trinity shares as a buy. Only one, Art Hatfield of Raymond James & Associates, expects it to underperform the market. Hatfield believes that the railway industry will slow, hurting Trinity’s railcar operation, he said in an interview.
Todd, the Trinity spokesman, pointed out that the federal government investigated Harman’s allegations against Trinity and declined to join in the suit. Peter Carr, a U.S. Department of Justice spokesman, declined to comment on that decision.
On a recent five-state guardrail-scouting trip from Texas to North Carolina, Harman was at the wheel at 2 a.m. Riding shotgun was Steven Lawrence, a Texas lawyer who works alongside Boies Schiller on Harman’s suit and also has filed personal injury and wrongful death suits against Trinity.
Among Lawrence’s clients is a 37-year-old former Marine named Jay Traylor, who lost both legs in a January 2014 car wreck. Lawrence’s suit alleges that Trinity’s “unreasonably dangerous” ET-Plus penetrated Traylor’s floorboard, impaled him and left him a double amputee.
Harman put North Carolina on his itinerary to see Traylor, and the two found common ground. Harman gave Traylor a formula for a pain-relieving salve. Harman says he used it himself, two decades ago, after he lost his own left leg in a construction accident.
“I’ve looked at every guardrail since I’ve had this accident,” Traylor said in an interview. “When measures are put out to prevent accidents and injuries as safety precautions, you should be able to trust them.”
Lawrence and other attorneys have brought at least nine personal-injury and wrongful-death suits against Trinity. After visiting some 200 crash sites and combing through news reports, Harman says he has turned up what he believes are roughly 20 deaths in accidents linked to the modified ET-Plus.
In all these cases, Trinity says it would take a more comprehensive analysis -- one that considers a vehicle’s speed, weight and angle of impact -- to determine how its system performed. Federal crash criteria specify conditions under which the guardrail system must perform to certain standards, which don’t necessarily cover every crash scenario.
Harman started his first business with his brother in 1988 when both were teenagers in Virginia. They planted grass at roadsides and later began installing guardrails and fencing. From the mid-1990s to the mid-2000s, Harman bought Trinity guardrail systems to install on state highways, he said.
It was the dawn of a new era in roadside safety. The guardrails with exposed ends that were the standard into the early 1960s could spear cars that hit them. Later, road crews buried the ends of some guardrails -- but those, it turned out, could serve as ramps, causing cars that hit them to roll over.
In 1989, a company called Syro Steel Co. introduced the ET-2000, an energy-absorbing end terminal designed by Texas A&M University and funded by the Texas Department of Transportation.
The ET-2000 did for guardrails what air bags did for cars. When a car hit Syro’s end terminal, the mechanism would act as a buffer that would absorb energy as it pressed into the rail behind it -- forcing the W-shaped guardrail through a slot and flattening it into a ribbon of steel that deflected away from the car.
Trinity Industries bought Syro in 1992. In 2000, Trinity received approval from the FHWA for its ET-Plus, a lighter version of the ET-2000, according to the FHWA acceptance letter that unlocked federal funding.
Around 2008, Harman said he started looking at the patent numbers marked on end-terminal models to see if any patents had lapsed. He reverse-engineered an ET-Plus from 2000, he said, using it as a model for a generic copy. He said one of his companies, SPIG Industry LLC, made 280 of them that he installed on Virginia’s highways.
In March 2011, Trinity sued SPIG for patent infringement.
Harman claimed in court filings that Trinity had listed incorrect and expired patent numbers on their ET-Plus units. “If I knew it was a patented product, I wouldn’t have ever made it,” he said.
In a court filing, Trinity denied allegations that it marked its ET-Plus heads with the wrong patent numbers.
Harman’s company agreed to stop production and work with Virginia highway authorities to determine if they should remove the ones already installed, Harman said.
Trinity continued its suit against Harman. The most Trinity could recover in damages for patent infringement was about $53,000, according to an expert report Trinity submitted as part of the case. The legal bills, on Harman’s side, were far greater -- at least $7 million by the time the patent suit ended in a confidential settlement in late 2012, according to Chapter 11 documents filed by SPIG.
Trinity Highway also wanted to know where Harman had installed every one of his copies. In September 2011, one of its employees sent Harman an e-mail, reviewed by Bloomberg News, repeating its request for “a full and complete listing of all locations/installations” of the terminals.
The patent case had nothing to do with money and “everything to do with stopping somebody from copying our product and getting the non-tested products off the roadway,” said a Trinity employee who asked not to be named because this person isn’t authorized to speak on the subject.
Harman’s own copy of an early ET-Plus, he said in an interview, had been involved in five accidents and had performed “100 percent appropriate.” If his models were working, he asked himself, why was Trinity so eager to get them off the road?
Harman started surveying accident sites in Virginia and Tennessee. In December 2011, he took a two-week trip across eight states, documenting what he said were more than 50 accident sites as far west as New Mexico.
Harman said his Eureka moment came at a crash site at Mile 153 on I-40, in Arkansas. This rail emerged from an ET-Plus with one of its edges folded over: Something was restricting it. Harman pulled out his calipers. The guardrail, he found, was trying to squeeze through a slot that was at one point an inch shorter and an inch narrower than in the original.
“There was no question,” he said, it was the smaller versions that were seizing. “Then I found another in Virginia.”
He sued Trinity in March 2012, alleging in an amended complaint that it had made five changes to the ET-Plus without notifying the FHWA. He alleged Trinity’s move lowered its manufacturing costs and made the ET-Plus more difficult to reuse after accidents than the earlier version, requiring highway authorities to purchase new ones.
Trinity, in court filings, cited FHWA standards that say manufacturers don’t have to report modifications that reduce costs or improve functioning if “good engineering judgment” deems they won’t degrade performance.
In the filings, it said it made four “fabrication revisions” in 2005 at the suggestion of engineers with the Texas A&M Transportation Institute, which originally designed and patented the ET-Plus. In a February 2013 letter to state transportation departments, Trinity and Texas A&M said the revisions were meant “to enhance the already demonstrated performance of the system in the field.”
Rick Davenport, a spokesman for the Texas A&M Transportation Institute, declined to comment on matters involving ongoing litigation.
On Feb. 14, 2012, about seven years after Harman alleged the changes began showing up on U.S. roads, Trinity officials met with FHWA engineer Nick Artimovich, according to e-mails sent by Artimovich that were reviewed by Bloomberg News. They alerted him to one change in the end terminal - the reduction in the guide channel’s width, to four inches from five - that it had omitted in documentation for a May 2005 crash-test.
About two weeks later, Artimovich wrote to two FHWA colleagues saying that he believed Trinity had correctly tested the modified ET-Plus design during the crash test. “However, there does seem to be a valid question over the field performance of the current ET-Plus compared to earlier versions,” he wrote in the e-mail, a copy of which was obtained by Bloomberg News.
Artimovich declined to comment for this article.
Harman, in his suit, said it isn’t clear which version of the ET-Plus was crash-tested. Gaffney of the FHWA said in his statement that Trinity told the agency that the ET-Plus with a four-inch channel had met crash-test standards.
Yesterday, Judge Gilstrap ruled to keep the trial in July, despite a motion by both parties to delay it until September. “The parties have conducted themselves with a level of contentiousness and vitriol that is as surprising as it is unwarranted,” Gilstrap wrote in his order.
Harman, meanwhile, continues his guardrail search.
Back in the North Carolina junkyard, Harman inspected Williams’ white Nissan resting along a chain-link fence. Its roof was caved in. Windshields were gone. A door, detached, leaned against the vehicle’s side.
“Lord, have mercy,” Harman said. “I don’t know how he survived - if he survived.”
Williams suffered a bruised lung, lower spine injuries and fractures to his leg, upper arm, eye and pelvis, he said by e-mail. He declined to comment further.
On the way out of the junkyard, Harman asked whether he could buy the wreck to preserve it as evidence. A few minutes later, he was back on the highway.
“People are dying,” Harman said. “This is an issue I brought to light, and I will see it to the end.”
To contact the reporter on this story: Patrick G. Lee in New York at firstname.lastname@example.org
To contact the editors responsible for this story: Michael Hytha at email@example.com Jeffrey D Grocott, Anne Reifenberg