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$19M Fee Award in False Claims Act Suit

June 11, 2015 | Posted in : Expenses / Costs, Fee Award, Fee Request

A recent Texas Lawyer story, “Whistleblower’s Attorney Fees: $16.5M, Plus $2.5M in Expenses, Costs,” reports that in a final judgment issued on June 9, U.S. District Judge Rodney Gilstrap of the Eastern District of Texas in Marshall calculated $663 million for a damages award against Dallas-based guardrail maker Trinity Industries.

Few had expected low dollar figures in a final judgment after Joshua Harman, a whistleblower and Trinity competitor, won a $175 million jury verdict in October 2014 against the company.  After discovering an alleged previously unidentified design change in Trinity’s guardrails during litigation in 2011, Harman filed the False Claims Act suit on behalf of the government, which did not join the litigation.

In the final judgment, Gilstrap also added $16.5 million in attorney fees and $2.5 million in expenses—precisely the amount requested by Harman’s legal team, which included the firms Boies Schiller & Flexner and McKool Smith, as well as former federal Judge T. John Ward.

How does the final judgment split the damages between Harman and the federal government?  Because he bore the full burden of prosecuting the lawsuit, Gilstrap awarded 30 percent—or $199,008,225—of the damages.

Trinity intends to appeal.  In a statement issued after the final judgment, Trinity states: “The judgment was expected after post-verdict, court ordered mediation failed to resolve the numerous legal issues involved.  The company believes the evidence clearly shows that no fraud was committed.  Trinity also believes that the trial court made significant errors in applying the federal law to Mr. Herman’s allegations and, therefore, the judgment is erroneous and should be reversed in its entirety.”