A jury in Jackson, Tenn., ordered Navistar International to pay a total of $30.8 million in damages to a commercial vehicle fleet operator that sued the truck and engine builder for fraudulently selling defective engines. Milan Supply Chain Solutions bought the International Prostar Class 8 trucks with Maxxforce 13 engines in 2011 and 2012.
Those engines were designed with “exhaust gas recirculation” (EGR) technology to treat NOx in compliance with EPA’s 2010 emissions standards. The process never gained the Environmental Protection Agency’s certification for compliance with its expanding emissions standards, and Navistar endured significant losses in its attempts to perfect the technology before relinquishing those efforts in mid-2012.
Other developers of commercial vehicle diesel engines adopted an alternative emissions-reduction technology, selective catalytic reduction (SCR), and Navistar later adopted that approach, too.
However, Milan Supply Chain Solutions contended that Navistar’s commitment to EGR (rather than SCR) led to multiple performance problems with the engines, which resulted in hundreds of millions of dollars of warranty costs to Navistar and significant losses to trucking companies that invested in those products.
The plaintiff presented testimony by former Navistar executives, along with evidence gained from the company’s records, that Navistar knew the scope of its products’ deficiencies, understood the effects would costly to truck owners and operators, and failed to disclose those to its customers.
The jury awarded $10.8 million in actual damages to Milan Supply Chain Solutions, plus $20 million in punitive damages.
A Navistar spokeswoman said the company is disappointed by the jury's decision and is "evaluating our options to challenge it. We have successfully defended similar claims regarding our MaxxForce 13 engines in several other jurisdictions, including dismissal of claims of fraud in courts in Texas, Wisconsin, Michigan, Indiana, Alabama, and Illinois."