A Chicago federal judge has given initial approval to Navistar's agreement to pay truck owners and lessees $135 million to settle a class action lawsuit over allegedly defective engine emission systems.
The settlement, pending final court approval, ends a lengthy court battle for the Lisle-based manufacturer, which built thousands of 2011 to 2014 model year commercial trucks with an alleged emissions design flaw that resulted in breakdowns and engine damage.
More than 66,500 International trucks equipped with certain MaxxForce 11- or 13-liter diesel engines are included in the class. Truck owners and lessees can choose from three payout options, either up to $2,500 cash per truck, a rebate of up to $10,000 towards a new truck or up to $15,000 in covered damages per truck.
"We're very happy with the result we reached for the class of Navistar truck owners and lessees," Adam Levitt, a Chicago attorney representing the plaintiffs, said Thursday. "We believe the settlement provides true and meaningful relief and we look forward to the ongoing claims process and being able to distribute money to class members."
All owners and lessees of affected vehicles must file their claims by May 11, with payouts expected to begin in the summer, Levitt said.
Navistar has been grappling with the fallout of the allegedly defective emissions systems for years. Built to comply with U.S. emissions rules that took effect in 2010, the company chose exhaust gas recirculation over selective catalytic reduction, a decision that led to alleged engine problems.
In 2016, Navistar paid investors $9.1 million to settle a class action lawsuit and a $7.5 million penalty to settle Security and Exchange Commission charges it misled investors about developing an advanced technology truck engine that could be certified to meet U.S. emission standards.
Navistar spent more than $700 million developing the engine before abandoning the project. The emissions failure led to the resignation of CEO Daniel Ustian in August 2012.
The lawsuit on behalf of truck owners and lessees was initially filed in 2014. The proposed settlement was reached in May.
Navistar took a charge of $159 million in the second quarter of 2019 to cover the costs associated with the settlement.
On Thursday, Navistar spokeswoman Lyndi McMillan emailed a statement issued last year saying the proposed settlement accelerated the company's efforts to "move past" the emissions issue, but had no comment on the court's approval.
