Appeals Court Panel Overturns $663M Guardrail Fraud Verdict

Three appeals court judges have overturned a $663 million fraud verdict against a company that makes guardrails found along many U.S. roads and highways.

The panel of judges on the 5th U.S. Circuit Court of Appeals in New Orleans on Friday threw out a 2014 jury verdict against Trinity Industries

Trinity was accused of fraud for failing to tell regulators about changes it made to guardrails, which critics said made them more dangerous when hit by cars at certain angles.

But the appeals court judges noted that the government continued reimbursing states at the same rate for the new guardrails, suggesting it didn’t consider the change fraudulent.

Federal highway officials later said the design met safety standards in crash tests.

The man who sued Trinity on behalf of the Federal Highway Administration, Joshua Harman, had once been a competitor with his own guardrail company.

“We’re disappointed with the decision of the appellate court and we’re assessing the options,” said Karen Dyer, one of the Harman’s lawyers.

A spokesman for the highway agency said he had not seen the court ruling by late Friday and declined to comment.

Dallas-based Trinity said it was pleased with Friday’s decision.

“This ruling affirms our longstanding belief that the (guardrail system) is safe and no fraud was committed,” said company spokesman Jeff Eller.

The original trial was held in a federal district court in Texas.

Shares of Trinity Industries Inc. jumped 9 percent in after-hours trading following the court’s ruling.