Guardrail Company Accused of Deadly Safety Cover-Up, Fraud

Whistleblower: US defrauded when devices OK'd; Company says they're proven safe.

ByABC News
October 10, 2014, 4:13 PM

— -- The company that makes many of the safety guardrails found next to highways across the country will defend itself in court next week against accusations of a massive cover-up and fraud against the U.S. government that the company’s accuser says is linked to dozens of gruesome injuries and deaths.

Jury selection begins Monday in Marshall, Texas in a federal suit brought against Trinity Industries of Texas by Joshua Harman, who claims the company defrauded the government when it sought for, and was granted approval to sell its ET-Plus guardrail end terminal to state departments of transportation without disclosing all of the design changes it had made. Harman claims small but crucial alterations made the device defective, causing severe injuries or deaths to some highway drivers who hit the guardrails in accidents. The federal government has chosen to not participate in this case.

The ET-Plus guardrail end terminal was the subject of an ABC News investigation in September, which found Trinity made the design modifications to the device in 2005 but didn’t tell the Federal Highway Administration about all of them at the time. In an internal email obtained by ABC News, a company official calculated one change – shortening a particular metal part from five inches to four -- would save $2 per guardrail end terminal, or $50,000 a year.

Harman says the changes cause the guardrails to “lock up,” rather than retracting and ribboning to absorb the vehicle’s impact. Instead, the guardrail can slice through the car – and its occupants – like a spear.

Lawsuits filed against Trinity show mangled vehicles with the guardrail pierced through the passenger cabin. Drivers who survived have lost limbs from when the guardrail skewered the car. There are reportedly half a million of the devices used on state highways today.

Harman is seeking damages on behalf of the government in order to recall or replace every modified ET-Plus currently in use – which could cost Trinity a reported $1 billion.

The company has vigorously defended itself against Harman in both court and in the press, calling him an opportunist and a liar. Trinity maintains its popular ET-Plus is safe, has passed crash tests and meets all federal standards.

At issue in the federal case is the approval of the ET-Plus by the Federal Highway Administration (FHWA) in 2005, which then allowed the device to be included on states' approved purchasing lists. Upon Harman's discovery in 2012 that changes made seven years before were not disclosed, the FHWA admitted it had approved the device without knowledge of the modifications, but insists Trinity has since proven the ET-Plus meets standards. As a result, the federal body continues to approve it for use by state highway authorities.

A spokesperson for the FHWA has told ABC News the agency considers this a "business dispute" between Harman and Trinity Industries.

Three states have removed the ET-Plus from the Qualified Products List, or QPL, meaning at least for the time being, they will not purchase new units. Nevada removed the device from its QPL earlier this year, with Massachusetts and Missouri announcing just last month the states would also be launching investigations into whether the end terminal is safe enough to be on its highways.

In a previous statement to ABC News, Trinity Industries says, "The Federal Government has confirmed – time and time again, since October 2012 – that the current version of the ET-Plus System remains eligible for highway funding reimbursement, and has been continually eligible since September 2005."

Joshua Harman is no stranger to Trinity Industries. Harman discovered the ET-Plus changes were not disclosed to the government during the discovery process of a previous patent infringement lawsuit, in which Trinity had sued Harman, accusing him of ripping off the ET-Plus design in order to manufacture and sell a competing product. That case has since settled.

The current federal case was originally brought by Harman as a qui tam, or whistleblower lawsuit, on behalf of the U.S. government. Harman, who spoke to ABC News about the allegations, says Trinity knew the modifications may not pass muster and deliberately and fraudulently withheld knowledge of them from the FHWA. In his federal complaint, he says the company was driven by a desire to cut the manufacturing cost of the end terminal, as well as an opportunity to sell a new ET-Plus each time it was damaged.

Trinity denies any of its changes were made to boost profits or would render the ET-Plus not reusable in order to sell more units.The company maintains that since the 5-inch to 4-inch change didn't affect the performance of the ET-Plus, it "did not feel an independent announcement was necessary." As for turning over the required design documentation to the FWHA, Trinity admits it was "inadvertently omitted."

Next week will not be the first time the two sides have squared off in the small courthouse in East Texas. The case previously went to trial this summer and ended in a mistrial amid allegations that a top Trinity executive intimidated a potential witness in the case. Trinity has strongly denied those claims.

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