Navistar Agrees To $135M Settlement In MaxxForce Engine Suit, Denies Wrongdoing
Rockford, Illinois – Navistar, maker of International Trucks, has agreed to pay $135 million to settle a class action suit stemming from the failure of its MaxxForce engines.
According to the agreement, the proposed class will include all entities and natural persons who owned or leased a 2011-2014 model year vehicles equipped with a MaxxForce 11- or 13-liter engine certified to meet EPA 2010 emissions standards without selective catalytic reduction technology, provided that vehicle was purchased or leased in any of the fifty (50) States, the District of Columbia, Puerto Rico, and all other United States territories and/or possessions.
The now-defunct engine line allegedly contained defects resulting in millions of dollars in warranty claims.
An 8-K form filed Wednesday with the Securities and Exchange Commission notified Navistar shareholders of the pending charge-out and settlement.
The settlement will reportedly be taken in the second quarter of this year, however, it must be approved by Judge Joan B. Gottschall of the U.S. District Court for the Northern District of Illinois.
The settlement “denies all claims…wrongdoing, liability or damage of any kind, and denies that [Navistar] acted improperly or wrongfully in any way.”
Class members can choose up to $2,500 per truck or $10,000 rebate off a new truck, or seek up to $15,000 per truck in out of pocket damages caused by alleged defect, according to the agreement.
Lieff Cabraser, co-lead counsel for the plaintiffs in the action, commented, “After years of hard fought litigation we believe this settlement represents an outstanding result for class members.”
In a statement provided to LandlineMag.com, a Navistar representative said,
“Navistar is taking a charge of $159 million in the second quarter to address the costs associated with current period liabilities and future potential settlements of certain litigation related to Model Year 2011-2014 Class 8 trucks sold in the U.S. with the company’s 11 & 13-liter EGR only engines, including U.S. class action lawsuits.
This amount also includes additional funds for certain other engine lawsuits that are not included in the settlement agreement.”
Additionally, the company said it hopes this settlement will serve to “accelerate our efforts to move past” the MaxxForce engine troubles.
Today’s settlement announcement was not the first of Navistar’s legal issues over its MaxxForce engines.
You may recall earlier this year when an Ohio jury awarded plaintiffs more than $1 million in a lawsuit alleging the engines were faulty.
In December 2017, a Tennessee judge upheld a jury’s decision to order Navistar to pay Milan, Tenn.-based trucking company Milan Supply Chain Solutions $30 million for the purchase of 243 International ProStar trucks.
Navistar infamously was the only OEM to pursue an EGR-only strategy in an effort to meet tighter 2010 federal emissions standards.
All other OEMs chose to deploy the DEF-based selective catalytic reduction system.
After racking up several years of multi-billion dollar losses, Navistar eventually abandoned the EGR-only strategy.
The company now offers its A26 engine in a 12-liter option, and customers can also choose to spec tractors with a 15-liter Cummins.