October 28, 2014 / 11:13 PM / 5 years ago

U.S. judge orders mediation in Trinity guardrail litigation

Oct 28 (Reuters) - A federal judge on Tuesday ordered mediation in a lawsuit over a suspected design flaw in highway guardrails made by Trinity Industries Inc, which resulted last week in a $175 million jury verdict against the company.

U.S. District Judge Rodney Gilstrap in Marshall, Texas ordered Trinity and the whistleblower who brought the case to attend mediation with Duke University Law Professor Francis McGovern by Dec. 31.

The judge also said that “given the unique nature of this litigation,” McGovern can require representatives of the U.S. Department of Justice and the Federal Highway Administration to be involved in the mediation process.

On Oct. 20, jurors found Trinity liable for having failed to tell the highway agency about changes it made in 2005 to rail heads, which are found at the ends of guardrails.

Joshua Harman, the whistleblower and a Trinity competitor, had claimed that the changes could cause guardrails to pierce crashing vehicles rather than absorb their impact, putting occupants at risk of death or serious injury.

Jurors on Oct. 20 found Trinity liable for defrauding the government. Under the federal False Claims Act, the $175 million verdict would be tripled to $525 million, which would be split by the U.S. Treasury and Harman.

Trinity has said the verdict should not stand. Several U.S. states have banned purchases of the Trinity product, known as ET-Plus, and the Dallas-based company on Oct. 24 said it would halt shipments for more crash testing.

Separately on Tuesday, Trinity reported a 50 percent increase in third-quarter profit attributable to shareholders to $149.4 million, or 90 cents per share, as revenue increased 41 percent to a record $1.56 billion. Analysts expected profit of 85 cents per share, according to Thomson Reuters I/B/E/S.

The case is U.S. ex rel. Harman v. Trinity Industries Inc et al, U.S. District Court, Eastern District of Texas, No. 12-00089. (Reporting by Jonathan Stempel in New York; editing by Andrew Hay)

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