Court approves $135M settlement in Navistar MaxxForce lawsuit

After more than five years in litigation, a massive class action lawsuit against Navistar is nearing an end. A federal judge has approved a nine-figure settlement for those affected by the faulty MaxxForce engines.

On Friday, Jan. 3, a federal district court judge in Illinois granted final approval of the proposed $135 million class action settlement against Navistar. Carriers and truckers who owned a 2010-13 Navistar with a defective MaxxForce engine may be eligible for compensation.

“The court finds that the settlement is fair, reasonable and adequate,” Judge Joan B. Gottschall stated. “Indeed, given the likely expense, costs of risks of further litigation, the settlement represents an excellent compromise and recovery for class members.”

Terms of MaxxForce settlement

Per the agreement, class members have three options to recover losses:

• Cash option: A lump sum payment of up to $2,500. No proof of damages is needed, though the class member must prove the length of qualified ownership of a class truck.
• Rebate option: A rebate of up to $10,000 toward the purchase of a new Navistar truck. Proof of damages is not required. The class member must prove the length of ownership or lease. The settlement limits this option to no more than 10 trucks per class member. The 10-truck cap was intended to prevent the claims of class members with large fleets from depleting the funds for the other options.
• “Prove up” option: The class member submits documentary evidence of damages for “covered expenses” totaling no more than $15,000.

Navistar will allocate $85 million to the cash and “prove up” options. The remaining $50 million will go toward payments under the rebate option.

Approval comes approximately three months after four large fleets objected to the proposed MaxxForce settlement.

In October, Ferguson Enterprises, Southern California Edison Co., The Walt Disney Co., and US Foods objected to the proposed settlement. The four companies consider the agreement “inadequate and unfair for failing to compensate class members for any lost truck value,” according to their filed objection.

However, the judge overruled those objections. Explaining the decision, the court wrote:

“The proposal does not so much represent a compromise between the positions of Navistar and the class as it does a victory for the class. Objectors have not explained why such a victory would be fair or how the court could rewrite the settlement as they propose. It cannot. Courts do not have the authority to rewrite a settlement during the final approval process.”

The objectors calculated diminished truck values of up to nearly $27,000 per truck with a MaxxForce engine. Conversely, class plaintiffs estimated lost resale value damages at more than $9,000 a truck. Additionally, a state court jury’s multimillion dollar verdict against Navistar in a similar case was reversed. Those factors in mind, the court found the proposed settlement fair considering the risks involved in further litigation.

Filing a claim
According to a news release from Lieff Cabraser Heimann & Bernstein, the law firm representing the plaintiffs, all owners and lessees of affected vehicles must file their claims by May 11.

A class member is defined as “all entities and natural persons who purchased 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 50 states, the District of Columbia, Puerto Rico or any other United States territories and/or possessions.”

Information on the claims process can be found here.