Road to Record $199 Million Award Began With Hunch on Guardrails

It started with a hunch about malfunctioning highway guardrails. It led to the biggest known whistle-blower award in U.S. history.

Joshua Harman, a Virginian with two small highway safety companies, made a discovery in late 2011 that perhaps only a guardrail maker could: A big competitor had changed the dimensions of its roadside safety device by as much as an inch here and there, he said, without telling federal regulators.

As designed, Trinity Industries Inc.’s ET-Plus system was meant to turn the end of a guardrail into a de facto shock absorber. The altered units, as Harman saw it, were locking up when hit, spearing cars and their occupants.

Harman, 46, spent 3 1/2 years trying to prove his point, driving hundreds of thousands of miles to inspect twisted guardrails at crash sites. In 2012 he sued Trinity, accusing it of hiding the potentially deadly alterations from the Federal Highway Administration. On Tuesday, almost eight months after a Texas jury agreed Trinity had defrauded taxpayers, the judge issued a final penalty: Trinity must pay $663 million, with $199 million of that going to Harman and the rest to the government.

It was one of the largest awards to taxpayers under the U.S. False Claims Act as well as the largest to an individual whistle-blower, said Patrick Burns, co-director of the nonprofit group Taxpayers Against Fraud Education Fund.

Nine Deaths

Harman, who lost his left leg in a construction accident two decades ago, said he brought the case to raise awareness about a safety risk that he says cost many victims their limbs. At least nine deaths have been linked in personal-injury lawsuits to the ET-Plus.

“I have sacrificed everything I’ve got to facilitate this situation,” Harman said. “With this $663 million judgment, it opens the eyes, hopefully, of the nation.”

Harman, whose guardrail manufacturing company filed for bankruptcy protection in March, may never collect on the award if Trinity, the biggest U.S. maker of highway safety equipment, wins on appeal.

Jeff Eller, a spokesman for Dallas-based Trinity, said in an e-mail that “the judgment is erroneous and should be reversed in its entirety.”

Trinity has said the changes didn’t detract from the safety of its ET-Plus units, which have been successfully tested multiple times. The company, whose shares have fallen 18 percent since the verdict, is defending more than 20 lawsuits over the safety of the ET-Plus.

One day after the October verdict, the FHWA, which evaluates highway devices before declaring them eligible for federal reimbursement, ordered a review of the ET-Plus. The system passed all eight crash tests since then, the agency said in March.

Halt Shipments

The Texas suit sparked concerns about highway safety across the country, causing dozens of states to ban new installations and Trinity to halt shipments of the ET-Plus. Lawmakers asked whether the FHWA responded adequately to highway officials’ mounting worries about the product. U.S. prosecutors in Boston opened a criminal probe into the relationship between Trinity and the FHWA.

Harman hasn’t had to fight alone. A fleet of lawyers at Boies, Schiller & Flexner LLP, whose founder, David Boies, has battled the likes of Microsoft Corp. and MasterCard Inc., shepherded the case through trial.

“The evidence of fraud in this case could not have been more compelling,” said Nicholas Gravante Jr., one of Harman’s lawyers.

To help build his case, Harman criss-crossed the country dozens of times, documenting guardrail accidents while juggling two mobile phones and a stream of calls from lawyers, journalists and crash victims. He munched on jalapenos and nibbled salami as he drove, often through the night. When he did sleep, he spent so many nights away from his wife and two young daughters in Bristol, Virginia, that he’s now a platinum elite member of Marriott International Inc.’s rewards program.

Disgruntled Rival?

Harman said he wasn’t fazed by claims that he was a disgruntled rival seeking revenge over another lawsuit between him and Trinity. But he was pained knowing his family was seeing him portrayed by industry critics as an opportunistic, money-hungry competitor. As part of Tuesday’s ruling, the judge ordered Trinity to pay $19 million of Harman’s legal fees and expenses.

“I’m sure they feel vindicated that some of the stuff they read about their father was wrong,” Harman said of his daughters. “I had to have faith that my family knew what I stood for.”

Harman has been spending time in Washington seeking to build support for Congressional hearings into the ET-Plus. So far, eight senators have urged U.S. officials to investigate existing safety protocols or require more stringent tests of Trinity’s system.

Harman said he hasn’t begun to ponder the prospect of newfound wealth as he presses his claims against Trinity and pushes for the modified units to be removed from U.S. roads.

“I will not shut up,” he said.

The case is Harman on behalf of the U.S. v. Trinity Industries Inc., 12-cv-00089, U.S. District Court, Eastern District of Texas (Marshall).

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