Disputing Blog by Karl Bayer, Victoria VanBuren, and Holly Hayes
Earlier this week, a federal judge in Marshall, Texas reportedly ordered a guardrail manufacturer and a whistleblower to engage in mediation by the end of the year. In U.S. ex rel. Harman v. Trinity Industries Inc. et al., No. 12-00089 (E. D. Tex.), a company competitor, Harman, claimed that Trinity Industries changed the design of its highway guardrail heads in 2005 without notifying the Federal Highway Administration (“FHA”). According to Harman, the undisclosed cost-saving measure placed motor vehicle drivers and passengers across the country at an increased risk of being injured or killed by the very devices installed to protect their safety.
Following a trial in the Eastern District of Texas, jurors ordered Trinity to pay $175 million for defrauding the U.S. government. In addition, a provision in the Federal False Claims Act would automatically triple the jury’s award to $525 million. Although Trinity argued that the jury’s verdict should be overturned, Judge Rodney Gilstrap ordered the parties to mediate a settlement. Interestingly, Judge Gilstrap stated representatives for the nation’s Department of Justice and the FHA may be involved in the mediation process due to the unique nature of the case. Any financial award paid by Trinity will be split by Harman and the U.S. Treasury.
The incorporation of the Internet into mediation as an augmentation to “face-to-face” discussions or when the mediation fully takes place online calls for new understandings about how to best structure...By James Melamed, J.D.