$30.8 Million Verdict Against Navistar for Concealing MaxxForce Engine Defects in 243 Trucks

Between 2011 and 2012, Milan Supply Chain Solutions purchased 243 International ProStar heavy-duty trucks from Navistar, each powered by a 13-liter MaxxForce EGR diesel engine. The engines used exhaust gas recirculation technology to meet federal emissions standards -- technology Navistar would later abandon entirely after it repeatedly failed regulatory compliance targets. What Navistar did not tell Milan at the time of sale, according to evidence presented at trial, was that the company already knew the engines had serious defects in the EGR system, coolers, and valves.

The trucks broke down at high rates. Milan experienced recurring mechanical failures that disrupted operations and drove down the resale value of its fleet. Evidence showed that each vehicle had lost more than $35,000 in trade-in value compared to what Milan reasonably could have expected. Across 243 units, those losses compounded quickly. Navistar, meanwhile, was publicly marketing the engines as rigorously tested and road-ready. Plaintiffs argued the carrier had been turned into a de facto test fleet for an unproven powertrain.

Clay Miller of Miller Weisbrod served as lead trial counsel for Milan. The nearly two-week trial in Jackson, Tennessee concluded on August 10, 2017. This was the first MaxxForce EGR lawsuit among roughly 20 then-pending related actions to reach a jury. After deliberating for approximately two and a half hours, the twelve-member jury found Navistar liable for fraud and violations of the Tennessee Consumer Protection Act.

The jury awarded $10.8 million in actual damages and $20 million in punitive damages, for a total of $30.8 million. Miller said after the verdict that the punitive award sent a message that concealing safety-related defects from customers is not acceptable conduct.

The verdict did not survive on appeal. The Tennessee Court of Appeals reversed on the fraud and consumer-protection claims, and in August 2021 the Tennessee Supreme Court affirmed that reversal. The court held that the economic loss doctrine barred Milan's fraud claim because the alleged misrepresentations concerned only the quality of the goods sold, and commercial parties in that position are limited to contract remedies. The court also held that the trucks did not qualify as 'goods' under the state consumer protection statute.