Caterpillar Inc. has informed a New Jersey federal judge that it agreed to pay $60 million to end bus and trucking companies’ class claims alleging that the company sold bus engines with a defective anti-pollution system. The settlement calls for a $60 million common fund. Class members would be eligible for between $500 and a maximum of $10,000 per engine, or $15,000, for losses stemming from repairs.
Plaintiffs in the five consolidated class actions have alleged that an exhaust emission control system used in Caterpillar’s C13 and C15 heavy-duty on-highway diesel engines is defective. The cases claim that buses or trucks with the engines suffered repeated failures and fault warnings that resulted in time-consuming and costly repairs.
The engines contain technology, known as ACERT, that recycles exhaust back through the engine to reduce emissions, which Caterpillar developed to comply with a series of tougher emissions regulations that went into effect in 2002, according to Salud Services Inc., which does business as Endeavor Bus Lines. The bus line, which filed its suit in Florida federal court, contended that the ACERT systems are particularly vulnerable to failure, including clogging and repeated triggering of check-engine lights.
Last year, the lawsuit survived Caterpillar’s dismissal motion claiming that the claims were preempted by the Clean Air Act. U.S. District Judge Jerome B. Simandle ruled in July that only one of the claims made by the bus and trucking company Plaintiffs – a federal warranty claim – is preempted by the CAA. However, the rest of the Plaintiffs’ claims – for alleged violations of consumer protection laws and breach of express warranty – are not emissions control issues to be enforced by the U.S. Environmental Protection Agency and can be litigated in federal court.
Judge Simandle also allowed their express warranty claims and the majority of their consumer protection claims to stand, but dismissed the Plaintiffs’ breach of implied warranty claims and certain other state law claims, finding that they had not been adequately pled.
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