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Limo companies slap Caterpillar with class action suit over engines

By Andrew Thomason | Jun 16, 2014

Two Illinois limousine companies are seeking more than $5 million from one of the state’s largest manufactures, claiming it used deceptive practices to sell them defective engines.

Windy City Limousine LLC and JKS Limousine LLC filed a class action lawsuit against Caterpillar Inc. June 9 in Chicago’s federal court.

The plaintiffs assert they both leased-to-own vehicles containing Caterpillar diesel engines with emission controls intended to be in line with U.S. Environmental Protection Agency (EPA) standards.

The engines at the crux of the suit that seeks class action status belonged to a family of engines used in vehicles sold or leased between 2007 and 2010.

In 2001, the EPA issued standards for diesel engines that set limits for three families of chemicals that would phase in over several years. The standards, along with recommended manufacturing and engineering techniques for emission control, were distributed to engine manufactures and others, including Caterpillar.

After getting the guidelines, the plaintiffs assert that Caterpillar designed engines that use a three-part system to control emissions, but chose a different engineering design than the EPA suggested technique.

Caterpillar “for its own business purpose, and for its own profit, failed to use known, reliable exhaust emission controls,” the limo companies allege.

Overall, the design was “defective in material and/or workmanship causing the vehicle to not function as required … even after repeated emissions warranty repairs and replacements,” the suit states. “These repeated and frequent  ... failures cause the vehicles to be unreliable for the transportation of good and/or passengers.”

The plaintiffs further claim that Caterpillar knew, or should have known, that engines were defective and could not be fixed.

As a result of the allegedly defective engines, the companies contend they had to pay for damages to their fleet vehicles, as well as other out-of-pocket expenses, and watch the value of their vehicles plummet.

The two plaintiffs assert that the defective engines, and Caterpillar’s handling of the defects, constitute breaches of both expressed and implied warranties.

Under federal law, the companies claim Caterpillar and other engine manufactures must provide an emission control systems warranty that covers emission-related parts and components.

“By failing to correct the defects, in spite of repeated, frequent attempts, Defendant has breached the express Emissions Control System Warranty,” the suit states.

The defective engines, the plaintiffs assert, also constitute a breach of an implied warranty of fitness for a particular purpose and a breach of an implied warranty of merchantability. Essentially, those warranties say that when a company sells a product for particular purpose, they are guaranteeing it will work for that purpose.

The limo companies further claim that Caterpillar was negligent by selling engines that didn’t comply with EPA safety standards and that it used unlawful and deceptive practices in selling diesel engines that didn’t meet these standards.

Besides seeking certification of a class in their suit, the plaintiffs asked Chicago's federal court to award them damages, including pre and post-judgment interest, attorneys’ fees and taxable costs amounting to more than $5 million.

The plaintiffs are being represented by Richard Burke, Jamie Weiss and Zachary Jacobs of Complex Litigation Group in Highland Park; Kevin Hoerner of Becker, Paulson, Hoerner & Thompson P.C. in Belleville; and Theodore J. Leopold and Leslie M. Kroeger of Cohen, Milstein, Sellers & Toll in Florida.

These lawyers want a judge to appoint them and their firms as class counsel, and their clients as representatives of the proposed class, which if approved, would include those who purchased or leased a vehicle with a C-13 or C-15 diesel engine made by Caterpillar between 2007 and 2010.

Complex Litigation Group was recently removed as class counsel by the Seventh Circuit Court of Appeals in litigation involving window-maker Pella Corporation. The federal appeals panel also overturned the approval of a multi-million dollar settlement in that case, calling it “inequitable – even scandalous.”

Hoerner, another one of the plaintiffs' attorneys, previously served as local and/or co-counsel to the embattled Prenda Law firm, which is currently appealing sanctions before the Seventh Circuit. Hoerner was not subject to the sanctions order.

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Organizations in this Story

Caterpillar Inc. U.S. Environmental Protection Agency (EPA)

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