Settlement Reached in Mobil AV-1 Class-Action Lawsuit
Owners of Continental 360, 470, 520 and 550 engines that used AV-1 oil have only until November 14th to submit their comments or objections to the proposed settlement. Here's our overview and analysis of this complex settlement, together with links to the full text of the relevant court-approved documents.
On October 25, 1995, a preliminary settlement agreement was reached in the federal class-action lawsuit filed against Mobil Corporation by Malvern Gross and Paul Jimison. As previously reported in AVweb, the plaintiffs claim that Mobil AV-1 synthetic oil may have caused substantial damage to a large number of big-bore Teledyne-Continental engines, and that all potentially affected engines should be inspected and, if necessary, repaired at Mobil's expense.
The court has scheduled a hearing on November 28, 1995, for final approval of the proposed settlement, and has established a deadline of November 14, 1995, for class members to submit comments or objections to the proposed settlement...an extraordinarily short "comment period" considering the complexity of the issues involved.
Meantime, Mobil is mailing out notices to approximately 50,000 owners of Continental engines, and has started accepting owner claims under the settlement. The terms of the settlement are rather involved and technical, but our short summary and analysis appears below. The full text of the court-approved settlement notice, repair and inspection protocol, and claim form are also available here, as well as the Plaintiff's press release announcing the settlement.. We suggest that all owners of AV-1 engines familiarize themselves with these documents immediately.
Summary of the Settlement
The terms of the settlement are set forth in a complicated 19-page document entitled "Mobil AV-1 Engine Inspection and Repair Protocol" which provides, in summary, that:
Qualified Engines. Claimants must submit an AV-1 claim form plus engine logs, aircraft logs, and invoices to prove that they own an aircraft powered by one of the covered TCM engines in which AV-1 oil was used for more than 150 hours. For such "Qualified AV-1 Engines," Mobil shall pay for inspection and, if necessary, repair as defined in the protocol.
Sluggish/Abnormal Propeller Operation. If the owner has experienced sluggish or abnormal propeller operation, the propeller may be removed and the prop and crankshaft bore inspected for sludge build-up. If sludge is found, an oil transfer collar leakage test may be performed. Engines that fail this test shall get a teardown inspection per #7.
Axial Crankshaft Test. If the propeller has been removed in connection with #2 or if cylinder have been removed in connection with #5, an axial crankshaft test shall be performed to determine if excessive axial crankshaft play exists. If it does, the engine shall get a teardown inspection per #7.
Top End Inspection. If the engine has had either (a) a dramatic increase in oil consumption (doubling over 150 hours) or (b) an abnormally large decrease in compression (15% over 150 hours) or (c) a dynamic compression test below the allowable limit established by TCM, it is eligible for cylinder replacement. If one or two cylinders have low compression, they will be replaced; if three or more have low compression, all cylinders will be replaced per #5. A crankcase pressure test shall also be performed.
Top End Overhaul. Engines with a dramatic increase in oil consumption or low compression on three or more cylinders or failing the crankcase pressure test shall have all its cylinders replaced as follows. Engines at 50% of TBO or less with cylinders exceeding new limits will get new cylinder kits. Engines beyond 50% of TBO with cylinders exceeding service limits will also get new cylinders.
Connecting Rod Bearing Test. If cylinders are removed per #5, connecting rod bearing play will be measured. One or more readings beyond TCM service limits will require connecting rod removal and inspection. Three or more such readings will require a teardown inspection per #7.
Teardown Inspection. Engines failing the tests of sections #2, #3, or #6 shall be removed from the aircraft and torn down. Mobil shall pay for R&R, teardown, and replacement of parts which are normally replaced after a complete teardown, including a new VAR crankshaft if the engine has a non-VAR crank, but will not pay for camshafts, lifters, or accessories.
Out-of-Protocol Inspection/Repair. If the A&P mechanic conducting the inspection protocol recommends further inspection or repair beyond what is called for in the written protocol, there is a procedure for obtaining approval from Mobil or, failing that, from a Special Master approved by the court.
Oil Pan Cleaning. Engines having sludge in the propeller or crankshaft per #2 or receiving a top overhaul per #5 may have the oil pan cleaned of sludge provided this can be done without removing the engine from the aircraft.
SOAP Analysis. Engines that do not undergo a teardown inspection per #7 may undergo a spectrographic oil analysis program for the next 150 hours or two years at Mobil's expense at a lab approved by Mobil.
Reimbursement, Loss of Use, Past Repairs. Mobil will reimburse owners for loss-of-use based on the actual use of the aircraft during the past year. Class members who have paid for engine repairs prior to the settlement as a result of loss of compression, increase in oil consumption, or propeller sluggishness may also qualify for reimbursement of costs incurred plus loss of use.
Owners desiring more information, claim forms, or wishing to submit comments or objections to the propsed settlement should immediately contact class counsel Michael F. Ram at Lieff, Cabraser, Heimann & Bernstein in San Francisco, telephone 800-956-1009, facimile 415-956-1008, or by e-mail at firstname.lastname@example.org.
In general, we believe that this settlement is fair to owners, and find it remarkable that it was arrived at with such rapidity in a court system whose timetables are normally calibrated in years and decades. A few things bother us, such as the fact that an owner with bottom-end damage due to AV-1 use does not really have the option under the protocol of exchanging his damaged engine for a factory reman. But on the whole, we applaud the outcome.
Owners need to be extremely careful about how they and their mechanic deal with this protocol. For example, one of the questions on Mobil's AV-1 claim form asks whether the claimant has experienced sluggish or abnormal propeller operation. If the claimant answers "no" to this question, he is precluded under the protocol from pulling the propeller and inspecting for sludge build-up which, if found, would justify a transfer collar test and possible teardown and overhaul under the protocol.
Any owner of an AV-1 engine who doesn't answer "yes" to the "sluggish propeller" question and have his A&P pull the prop (a very quick and painless procedure) should have his head examined. The same is true for the "dramatic rise in oil consumption" question.
Owners should also make sure that they and their A&P fully understand and take advantage of item #8 of the protocol ("Out of Protocol Inspection and Repair"), which permits the mechanic to recommend and possibly even insist upon inspection and repair beyond the strict written criteria of the protocol. Be sure your mechanic interprets this clause liberally, and remind him that when all is said and done, it will be his signature assuring that the engine is airworthy and approved for return to service.