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Friday
Feb272015

Canadian City Sues US Guardrail Maker for $500 Million

ABC KSAT San Antonio(STRATFORD, Ontario) -- The multi-million dollar troubles for an embattled American guardrail maker have extended north of the border as a Canadian city filed a lawsuit this week over the company’s allegedly dangerous and “defective” guardrail design.

The complaint, obtained by ABC News, seeks half a billion dollars in damages on behalf of the city of Stratford, located in Ontario, Canada and alleges Trinity Industries of Dallas, the manufacturer of the ET-Plus guardrail system, "mislead its customers" by not disclosing "secret” modifications it had made to its product.

"Trinity was aware of multiple serious failures of their secretly modified ET-Plus guardrail end terminals, but continued to manufacture and sell the modified version without disclosing the changes, resulting in tens of thousands of the units being installed across Canada," the complaint reads. "It is believed that there are tens of thousands of these defective, secretly modified, ET-Plus guardrail end terminals on the highways, as well as provincial and municipal roadways, across Canada."

The ET-Plus guardrail system, which is used in states throughout the U.S., was the subject of an ABC News 20/20 investigation last year. ABC News obtained an internal Trinity email from 2005 in which a Trinity official estimated that making a modification to its widely-used guardrail system -- reducing a piece of metal in the end terminal from five inches to four -- would save the company $2 per end terminal, or $50,000 a year.

Trinity made the modification that year without alerting U.S. federal or state officials and critics have since blamed the change for rendering the end terminal defective when hit, sometimes impaling vehicles and causing severe injury or death. The company has maintained that the modified ET-Plus is safe and continues to meet federal standards.

News of the complaint from Stratford, which happens to be the hometown of pop star Justin Bieber, was first brought to light by Trinity itself in an annual shareholders report just filed by the publicly-held company in which it disclosed pending litigation.

"The Statement of Claim in this litigation generally alleges that Trinity Industries, Inc., Trinity Highway Products and Trinity Industries Canada, failed to warn of dangers associated with undisclosed modifications to the ET Plus guardrail end terminals, breached its implied warranty, breached its duty of care, and was negligent," the Trinity earnings report reads.

Trinity spokesman Jeff Eller would not comment on the complaint and told ABC News the company has not yet officially been served.

The Canadian complaint is the second of three class action lawsuits filed against Trinity surrounding the ET-Plus system. In November, a class action complaint was filed in Illinois on behalf of the counties in that state, alleging fraud on the part of Trinity for not disclosing the modifications. And earlier this week, a class action complaint was filed in Wisconsin, also alleging the company was fraudulent in selling the altered ET-Plus to transportation departments.

While three Canadian provinces -- Quebec, Alberta and Nova Scotia -- have suspended the use of the ET-Plus on its roadways, the province in which the city of Stratford lies, Ontario, Canada's second largest province, has not removed the ET-Plus from its list of approved products. According to the complaint, officials there are “actively monitoring the developments in the United States.”

In its latest annual report, Trinity Industries acknowledged that 42 U.S. states have now suspended use of its ET-Plus. The company halted sales late last year, pending results from U.S. government-mandated crash tests of the end terminal.

Those tests, ordered by the Federal Highway Administration (FHWA), were conducted in December and January, in order to determine the ET-Plus’ eligibility to remain on U.S. highways. The product passed the first series of four tests and results of the final four are awaiting release by the FHWA.

Controversy has dogged the eighth and final test, which some say show a clear failure of the end terminal. Helicopter footage shot by a local ABC station shows the guardrail system caused substantial damage to the test vehicle upon impact. Trinity Industries has insisted no conclusions can be drawn from the video alone.

And in a rare move by the normally circumspect company, a Trinity executive used a recent earnings conference call to publicly blast two of the most vocal critics of the crash tests and of the ET-Plus system, Josh Harman and Dean Sicking, as having financial motives for speaking out against its product.

"We expect Mr. Harman and Dr. Sicking will continue their campaign to discredit the ET-Plus and Trinity Highway, ignoring facts and data that confirm the ET-Plus system complies with applicable regulatory requirements," Theis Rice, Trinity's chief legal officer, told shareholders Feb. 19.

Harman is a one-time competitor of Trinity Industries who battled the company first as the defendant in a patent lawsuit and later as a plaintiff and whistleblower in a federal case accusing the company of fraud. Harman first brought news of the undisclosed modifications to the government in 2012. A jury found Trinity liable in the federal case and the company was ordered to pay $175 million, which could triple by statutory mandate. The company plans to appeal the verdict.

In the call to shareholders last week, Rice painted Harman as an opportunist who has used the media to make unsupported accusations.

"Should Mr. Harman ultimately prevail in his litigation, he stands to receive somewhere between 20 percent and 30 percent of the monetary amount awarded upon final judgement,” Rice said.

Rice also called out Dean Sicking, a renowned highway safety engineer and guardrail expert who invented the predecessor to the ET-Plus and who has openly criticized the methodology used in the crash tests.

"Dr. Sicking has developed, licensed and is currently receiving royalties on end terminal products that compete directly with the ET-Plus. We believe Dr. Sicking stands to gain financially by discrediting the ET-Plus," said Rice.

The embattled company has not been known to speak so bluntly of its critics and in responding to ABC News Wednesday, Harman said he believes it is a strategy as the results of the final tests - including the controversial eighth test - await release by the government.

"It's just another attempt by Trinity to divert attention from the [federal jury] verdict and the fact that one or more of the crash tests recently performed by Trinity at the FHWA's directive failed," Harman told ABC News.

Sicking, who is currently conducting football helmet safety research at the University of Alabama-Birmingham, insisted that money is not his incentive for speaking out, noting that he has proposed reinstating an earlier version of the ET-Plus that would actually cut royalties he receives from competing products.

"It is easy to see that any greed present in this argument is on their side," Sicking told ABC News, adding that he has been the victim of "vicious attacks" in the "battle to do what's right."


Copyright © 2015, ABC Radio. All rights reserved.

Friday
Feb272015

Wall Street Ends Week With Losses, Gains for February

iStock/Thinkstock(NEW YORK) -- Stocks drifted lower to end the week, but the markets still ended February higher than where they started.

The Dow Jones Industrial Average finished the session on Friday at 18,132.70, down 81.72 from its open.

The Nasdaq fell by 24.36 to close at 4,963.53. The S&P 500 fell by 6.24 points to close at 2,104.50.

The markets however were up by 5 percent or more in February.

Drivers in California are receiving a surprise at the gas pumps, as prices have risen in parts of the Golden State to $4 a gallon. Analysts from GasBuddy.com say rise in prices comes from a fire at an ExxonMobil refinery.

The refinery produces 10 percent of all the gas sold in California, in particular a special blend of gas that’s mostly used in the state, which has contributed to the jump in prices.

Southwest Airlines expects to meet a federal deadline this weekend to finish examining 128 planes that were grounded because of missed inspections.  

The Federal Aviation Administration is allowing Southwest to keep flying during the inspections of a backup hydraulic system for the rudders.


Copyright © 2015, ABC Radio. All rights reserved.

Friday
Feb272015

Mobile World Congress 2015: Samsung Galaxy S6 and What Else to Expect

Mobile World Congress/Facebook(NEW YORK) -- Smartphone fanatics rejoice: The Mobile World Congress gets underway in Barcelona next week where some of the biggest technology companies are expected to show off the next wave of innovative devices.

While the event doesn't officially begin until Monday, Samsung is starting the festivities one day early when it live streams its Galaxy Unpacked event at 12:30 p.m. ET Sunday, during which it is expected to announce at least one, if not two, new smartphones.

Samsung hasn't said what is on the agenda. However, the South Korean tech giant has been dropping hints along the way about what to expect from an anticipated Galaxy S6. The anticipated smartphone has been expected to take on the curved design that Samsung unveiled with the Galaxy Note Edge.

Photos posted online by Samsung and T-Mobile also suggest the "next big thing" will trade in its plastic backing for an all-metal frame.

"Samsung has to hit a home run to stem their precipitous share losses, particularly on the premium phone range," Patrick Moorhead, an analyst at Moor Insights and Strategies told ABC News.

Samsung recently acquired mobile wallet LoopPay, a competitor to Apple Pay, something Moorhead expects will be referenced on Sunday. However, he said he doesn't "see it being integrated immediately but very soon afterwards."

Also expect Taiwanese smartphone maker HTC to compete on Sunday with Samsung when it holds a press event showing off what many believe will be its One M9 device, a follow-up to the One M8 released last year.

"I'm expecting a new premium phablet product with updated specifications and new industrial design," Moorhead said.

While it's a wildcard, it's also possible that HTC could share new insights on how their partnership with Under Armour will bring meld technology and fitness.

Aside from product announcements, the Mobile World Congress is known for hosting talks with some of the biggest players in the technology industry.

Fresh off a vote to preserve net neutrality in the United States, Tom Wheeler, chairman of the Federal Communications Commission, is scheduled to deliver a speech. Also on the agenda this year are Facebook CEO Mark Zuckerberg and Sundar Pichai, Google's head of Android, Chrome and Apps.

With 1,900 exhibitors, most of the big-name companies will hold press events on Sunday and Monday, clearing the way for the exhibition floor to take the spotlight the rest of the week.

"We could see some surprises with some wearables that we haven’t seen before," Moorhead said. "I would expect them to follow along the lines of what Apple has done -- things that look more like a watch than a cross between a watch and a smartphone."

Apple is known for doing its own thing. The company won't be at the event but is instead readying to host a mystery presentation in San Francisco on March 9 where it's expected the iPhone maker will show off even more features of its Apple Watch, which is set to debut in April.


Copyright © 2015, ABC Radio. All rights reserved.

Friday
Feb272015

Tax Tip: How Volunteering Can Lower Your Tax Bill

Stockbyte/Thinkstock(NEW YORK) -- While volunteering can be rewarding for both you and those you help, you shouldn't expect to receive much more than gratitude in return when it comes time to file your taxes.

There are "not big benefits from a tax standpoint,” said Tom Wheelwright, the CEO and founder of the CPA firm ProVision.

“Your time is not deductible,” he said, and here's why: "You don’t have to pick up any income for it."

However, you may be able to write off some taxable expenses.

“With your volunteering there are some other things that you can take advantage of, depending on the nature of it,” said Kathy Pickering, executive director of The Tax Institute at H&R Block.

For instance, you can deduct the costs associated with your travel, especially if you're using your car.

“Say, for example, you’re volunteering for Meals on Wheels, where you’re required to travel as a part of your volunteer services. You’re able to deduct that mileage," Pickering said.

And, she adds, volunteering is always good for the soul.


Copyright © 2015, ABC Radio. All rights reserved.

Friday
Feb272015

Amazon Envisions Delivery System of the Future with 3-D Printing Trucks

Getty Images(NEW YORK) -- Drone delivery may be a distant dream for Amazon, but it's not stopping the e-commerce giant from employing a ground fleet of trucks equipped with 3-D printers to help get goods to customers even faster.

Amazon is obsessed with dreaming up ways to get goods to customers even faster in the future and in a newly filed patent application, the company revealed how its hypothetical trucks would be able to print goods while traveling to deliver them to the customer.

While 3D printers don't cover everything on Amazon's site, the idea would be for customers to place an order for something, such as a spare part.

Amazon wouldn't have to store the inventory and would instead 3-D print what was needed on demand, and deliver it to the customer even faster.

Amazon did not immediately respond to ABC News' request for comment on the proposed delivery system.

Earlier this month, the company's vision of drones delivering goods hit another roadblock when the Federal Aviation Administration released new proposals for commercial drone operations, but with several caveats that would keep Amazon Prime Air from become a reality.

While the rules could take as long as two years to be adopted, they seem to be a significant roadblock on Amazon's plans to create a drone delivery network that CEO Jeff Bezos has said he hopes will one day be as common as seeing a mail truck.

"Based on the proposal, even then those rules wouldn't allow Prime Air to operate in the United States," Paul Misener, vice president of global public policy at Amazon, said in a statement to ABC News.

"The FAA needs to begin and expeditiously complete the formal process to address the needs of our business, and ultimately our customers. We are committed to realizing our vision for Prime Air and are prepared to deploy where we have the regulatory support we need," he said.


Copyright © 2015, ABC Radio. All rights reserved.

Friday
Feb272015

Hyperloop: Crowd-Sourced Company Plans Test Track in California

HTT/JumpStartFund(PALO ALTO, Calif.) -- The first Hyperloop test track could be built as early as 2016 in California, moving Elon Musk's dream of a high-speed transportation system of tubes one step closer to becoming a reality.

Using Musk's free design plan, Hyperloop Test Technologies, a crowd-funded company not affiliated with the Tesla and SpaceX billionaire, said it plans to build a full-scale model on five miles of land in California's Quay Valley.

"This installation will allow us to demonstrate all systems on a full scale and immediately begin generating revenues for our shareholders through actual operations," Dirk Ahlborn, CEO of Hyperloop Transportation Technologies, said in a statement to The Verge.

Musk first unveiled his futuristic idea in 2013, calling it "a cross between a Concord, a rail gun and an air hockey table." He published the 57-page design plan on both Tesla Motors' and SpaceX's blogs as a PDF available for download, allowing anyone to take the design and adopt it.

While Musk described a system that could carry humans at speeds as high as 760 mph, the California test track will likely only reach around 200 mph, Ahlborn told The Verge.

The Hyperloop is a large pneumatic tube, similar to the system used by some hospitals to transport documents, samples and medications in a more efficient manner. New York City also relied on a network of pneumatic tubes to transport mail during the first half of the 20th century.

Last month, Musk tweeted that he plans to build a Hyperloop test track "most likely in Texas" where student teams and companies can test out designs for possible Hyperloop pods.


Copyright © 2015, ABC Radio. All rights reserved.

Friday
Feb272015

IRS Says Nearly 40 Million Tax Refunds Worth $125 Billion Issued Already

iStock/Thinkstock(WASHINGTON) -- The Internal Revenue Service says it has already issued nearly 40 million tax refunds worth about $125 billion.

According to statistics released on Thursday -- and accurate as of Feb. 20 -- almost 50 million returns have been processed, with 83 percent of those resulting in refunds. The number of returns processed represents approximately one-third of those the agency expects to receive.

The IRS says 92 percent of refunds were directly deposited into the recipients' accounts, which it recommends as a "safe, quick way for taxpayers to get their refunds."

The average tax refund issued thus far this year is $3,120, the agency says.


Copyright © 2015, ABC Radio. All rights reserved.

Friday
Feb272015

Google Backtracks on Adult Content Ban in Blogger

Getty Images(NEW YORK) -- After hearing feedback from Blogger users, Google Friday is reversing course on a plan to ban X-rated content on the blogging platform, according to a post on the company's product forums.

The search giant earlier this week announced a retroactive policy banning "graphic nude images or video" on the site, effective March 23. The new rule would have required longtime users of the blogging platform to delete old content that did not adhere to the policy or instead make their accounts private.

"We've had a ton of feedback, in particular about the introduction of a retroactive change (some people have had accounts for 10+ years), but also about the negative impact on individuals who post sexually explicit content to express their identities," Jessica Pelegio, social product support manager, wrote on Google's Product forums.

"So rather than implement this change, we've decided to step up enforcement around our existing policy prohibiting commercial porn," she added.

Blogger users who post explicit content will still be required to mark their pages "adult" so they will be placed behind a warning page, however no additional changes will need to be made to their blogs.


Copyright © 2015, ABC Radio. All rights reserved.

Friday
Feb272015

US Economy Grew at Slower Rate in Fourth Quarter

Comstock Images/Stockbyte/Thinkstock(NEW YORK) -- A second estimate of the U.S. economy's growth in the fourth quarter of the 2014 fiscal year was more pessimistic than the initial data, the Commerce Department said.

Despite the first estimate pegging the gross domestic product's increase at a rate of 2.6 percent, that figure was adjusted down to 2.2 percent, according to a news release Friday. That is far below the third quarter's growth rate of five percent.

The Commerce Department's Bureau of Economic Analysis said Friday that the growth of the U.S. GDP was due in part to personal spending, exports and state and local government spending. The decreased rate at which the economy grew, however, was attributed to "an upturn in imports, a downturn in federal government spending, and decelerations in nonresidential fixed investment and in exports."


Copyright © 2015, ABC Radio. All rights reserved.

Friday
Feb272015

Barnes & Noble to Split College Business from Retail, NOOK Business

jhutchin/iStock Editorial/Thinkstock(NEW YORK) -- Barnes & Noble announced on Thursday that it would split itself into two "highly focused companies" with one focusing on its college business and the other retaining retail and NOOK Digital business.

The company said in a press release that it had filed a registration statement with the Securities and Exchange Commission. Once completed, the split would form two "independent, publicly traded companies."

"As more focused companies with differing potential growth profiles, capital needs and market dynamics, each company will benefit from strategic clarity and separate management and Board focus," the company said.

Barnes & Noble hopes to complete the split by August 2015.


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