DRASC, Inc. v. Navistar, Inc., No. 20-1821 (7th Cir. 2021)
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A class of owners accused Navistar of selling trucks with defective engines. The suit was settled for $135 million. The district court gave its preliminary approval. A court-approved Rule 23(e) notice was sent by first-class mail to all class members describing the settlement terms and the option to litigate independently. The notice's opt-out instructions included a link to a website with the full details and a phone number. The court held a fairness hearing then entered a final judgment implementing the settlement. Class member Drasc had sued Navistar in Ohio concerning the truck engines. The federal court declined to enjoin parallel state court suits, so the Ohio case proceeded while the federal action was pending. After the court approved the settlement, Navistar notified Drasc that its suit is barred by the release in the settlement. Drasc argued that it never received notice of the settlement and that its effort to continue litigating in Ohio should be deemed a “reasonable indication” of a desire to opt-out.
The Seventh Circuit affirmed the rejection of Drasc’s arguments, noting findings that two first-class letters were sent to Drasc at its business addresses; Drasc had not provided an email address for notice; Drasc’s Ohio lawyers had actual notice of the settlement and must have known about the need to opt-out. Drasc had actual knowledge of the need to opt-out and could not show excusable neglect that would justify an extension of the opt-out deadline.
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