Navistar must pay a Tennessee trucking company over $30 million following a lawsuit that found them guilty of fraud.
The lawsuit was filed due to a defect in the Navistar Maxxforce 13L engines sold to Milan Supply Chain Solutions in 2011 and 2012.
In their lawsuit, Milan Supply Chain Solutions claimed that the Maxxforce engine had many known issues before its release, but Navistar released the engine anyway, conning companies into buying the trucks by not informing purchasers of the defects.
Milan Supply Chain Solutions also claimed that Navistar was treating the customers purchasing the Maxxforce engines as a makeshift “test fleet,” after executives ignored emails saying “we have no field testing,” according to a PRNewswire press release.
Ex-executive of Navistar Jim Hebe testified against the company, saying that they “did not test s**t,” when developing the new heavy-duty emissions system engine.
Navistar, who sold Milan Supply Chain Solutions 243 trucks equipped with Maxxforce engines, ended up spending hundreds of millions of dollars replacing faulty parts in Maxxforce engines sold across the nation.
Despite their replacement, Milan Supply Chain Solutions still claims to have lost more than $35,000 per truck on trade in values, not including time lost or labor paid to repair the engines.
One head Navistar executive stated that it was “normal business practice” to keep the public unaware of known defects.
On August 10th, 2017, a jury in Jackson, Tennessee, found that Navistar Inc. committed fraud and order to them to pay $10,800,000 in actual damages and $20,000,000 in punitive damages to Milan Supply Chain Solutions.
One of Milan Supply Chain Solutions’ attorneys says that this verdict sends the message that “it is not acceptable for the company to cover up important defects in the engines and the engines’ testing program in order to make a sale.”
Navistar says that it “strongly disagrees” with the verdict. The company also pointed out 6 other similar cases brought against them in states across the country, all of which Navistar won.
Navistar may seek an appeal to the verdict.
If the verdict is upheld, and the trucking companies that purchased the other 59,757 Maxxforce engines pursue lawsuits, Navistar could be facing upwards of $7.6 billion in payments for actual and punitive damages.