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Toyota Pays $29 Mil for Poorly-Handled Recalls

Settles with 29 states for delayed response to unintended acceleration problems.

by on Feb.15, 2013

The Lexus RX400h was covered by the latest unintended acceleration safety recall.

In the latest development involving Toyota’s problems with so-called unintended acceleration, the maker has agreed to pay $29 million as part of a settlement with the attorneys-general in 29 states while also improving the way it handles future recalls.

The automaker will also set aside another $5 million to help reimburse owners of various Toyota Motor Co. products who were affected by those recalls to cover costs for rental cars, taxi rides and other replacement transportation.

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Toyota has already paid a series of record fines levied by the National Highway Traffic Safety Administration as a result of its handling of recalls linked to a series of problems that could cause its vehicles to surge out of control. Since the first of those recalls – involving issues such as carpet entrapment and sticky accelerators – was launched in 2009, more than 10 million vehicles have been affected.

“Car buyers deserve the assurance that manufacturers will quickly and appropriately respond to known safety risks,” Arkansas Attorney General Dustin McDaniel said. “The terms of this settlement require that Toyota make changes to improve its responsiveness to safety issues, and that benefits consumers.”


Approval of Toyota Settlement Doesn’t End Unintended Acceleration Nightmare

Maker still faces potential billions in claims for injuries, deaths.

by on Dec.31, 2012

Will Toyota settle the remaining unintended acceleration cases to keep pictures like this crash scene out of the headlines?

A federal judge in suburban Los Angeles has given his preliminary approval to a settlement estimated to be worth as much as $1.4 billion in a collection of cases involving the unintended acceleration of Toyota Motor Co. products – but the deal only resolves what one observer described as the “easy” part of the litigation facing the Japanese giant.

If given the court’s final okay sometime next year, the agreement would resolve claims that the unintended acceleration problems led to a sharp decline in the value of Toyota vehicles.

But it does not resolve scores of additional claims filed by those who allege they were injured during “runaway car” crashes or on behalf of others who were killed.

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The new Toyota settlement resolves “an economic value lawsuit,” stresses Joe Phillippi, of AutoTrends Consulting.  And while that may involve the majority of the lawsuits Toyota was facing, he notes it’s “the highly emotional lawsuits yet to be heard.  And when you start parading in front of a jury grizzly images of people injured or killed that makes for great headlines.”


Toyota Pays $10 Million In Runaway Lexus Case

Dealership still to settle.

by on Dec.24, 2010

Toyota pays $10 million to settle the first big sudden acceleration lawsuit.

That incident led to the first of the maker’s big recalls for so-called sudden acceleration which, in turn, has led to hundreds of lawsuits and a series of record fines for the humbled Japanese automaker.

The August 2009 accident apparently occurred when the floor mat of a Lexus sedan driven by California Highway Patrol Officer Mark Saylor jammed the accelerator pedal.  The vehicle quickly raced out of control, reaching speeds as high as 120 mph before slamming into an SUV, careening off the road, down an embankment and then repeatedly rolling over before bursting into flames.  Saylor, 45, was killed along with three members of his family.

Shortly afterwards, Toyota announced it would agree to recall millions of vehicles prone to having their floor mats jam under the accelerator pedal.  The following January, the maker also agreed to recall millions more vehicles with potentially sticky accelerator pedals.  But it has since been fined heavily for delaying those and various other safety-related recalls.  (For more, Click Here.)

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The payment with Saylor’s family was originally supposed to be kept secret – as often happens with out-of-court settlements – but was released to the Los Angeles Times by Larry Willis, a lawyer in Orange County, California, who is representing the dealership that loaned the Lexus to the police officer.

The dealership was also sued by the family but has yet to reach a settlement.


U.S. Toyota Officials Warned Japan Execs to “Come Clean”

New documents further support charges automaker hid defect.

by on Apr.08, 2010

Internal documents show U.S. and Japanese Toyota officials debated whether to reveal a problem with defective accelerator pedals -- as required by law.

Newly-released documents show that Toyota officials in Japan and the United States spent months debating how to handle problems with defective accelerator pedals, even though the company was required to disclose safety-related issues to the U.S. government within five days of discovering such problems.

A senior American executive, worrying about the potential impact on the company’s once-bulletproof image, finally warned his colleagues at Toyota’s Japanese headquarters that if the automaker didn’t “come clean,” it might trigger the collapse of its business.

“WE HAVE a tendency for MECHANICAL failure in accelerator pedals of a certain manufacturer on certain models,” wrote Irv Miller, the outgoing group vie president of communications for Toyota Motor Sales USA, wrote to Katsuhiko Koganei, on January 16, 2010, using capital letters to underscore his concerns.

As has reported, on several occasions, there was an apparent split between U.S. and Japanese Toyota executives over the company’s problems with so-called “sudden acceleration.”  But the letter by Miller, who was scheduled to retire in January of this year, provides clear evidence of the problem, with the U.S. executive’s note insisting, “The time to hide on this one is over.”

In October 2008, the maker had recalled 3.8 million vehicles for what it described as “carpet entrapment,” where loose floor mats would occasionally jam accelerator pedals.  In the weeks that followed, American executives described as “unwarranted speculation” reports of additional problems.

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But a cache of tens of thousands of documents recently provided to U.S. officials by Toyota reveal that even before the first American recall — by no later than June 2009 — the automaker had already realized there was an additional problem with the actual accelerator pedal assembly on at least some Toyota models sold in Europe.


Toyota Wants to Consolidate Over 200 Sudden Acceleration Lawsuits

Plaintiffs claiming damages that could top $40 billion.

by on Mar.25, 2010

More than 200 separate lawsuits have been filed against Toyota, many seeking class-action status, in the wake of its recent safety problems.

Facing an avalanche of litigation that could result in as much as $40 billion in payoffs to those claiming injury from problems with runaway vehicles, Toyota wants a panel of federal judges to consolidate more than 200 separate “sudden acceleration” lawsuits before a single California judge.

But lawyers representing a variety of plaintiffs told a U.S. Panel on Multidistrict Litigation that they’d prefer to have their cases heard by courts in New Jersey, Florida, Kentucky, and other parts of the country.

The Panel, operating out of federal court in San Diego, has been empowered to try to reign in the growing number of lawsuits targeting Toyota for its ongoing safety problems, an issue that could tie up the courts – and the automaker – for years to come.

So far, the company’s attorneys said, 138 potential class-action lawsuits have been filed seeking damages because Toyota’s problems have resulted in falling resale values for its products.  Another 97 suits claim damages because of personal injuries and wrongful deaths involving Toyota products.

While Toyota is expected to ask the panel to dismiss the pending litigation as a matter of course, that is considered a long-shot.  It has a better chance, according to legal experts, of getting some or all of the suits heard at a single trial.

“All these cases have common issues,” Toyota attorney Cari Dawson told the panel of judges.  “There will be significant overlap,” she stressed, arguing that it makes more sense to combine the cases and argue them concurrently.

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While some plaintiffs’ attorneys continue hoping to argue their own cases, observers believe that the panel will eventually approve the consolidation.  With at least 34 cases already filed in California, the state is considered likely to be the venue for the litigation.  It helps that it is near Toyota’s U.S. headquarters, which will make it easy for corporate officials to appear on the witness stand.


Toyota Shareholders Suing

Proposed lawsuits claim misinformation propped up stock price.

by on Mar.22, 2010

Further complicating Toyota’s ongoing problems, the automaker faces the prospect of at least three class action lawsuits filed by angry shareholders claiming the Japanese maker understated the degree of its safety-related problems, improperly propping up its stock price.

Shareholders claim the maker downplayed problems that led to a huge slump in its price.

Toyota’s share price has rebounded somewhat – hitting $79.56 on Friday – from a low of $60.42 – but that’s still down from the 52-week high of $91.97.  Just since the automaker’s January 21 announcement that it would recall 2.3 million vehicles and shut down five plants to deal with a potentialy sticky accelerator, the stock price has tumbled about 13%, wiping out $25 billion in market capitalization.

The proposed class actions claim that Toyota misguided investors when, last October, it staged an earlier recall to deal with sudden acceleration problems, insisting that the matter would be resolved by dealing with so-called “carpet entrapment,” in which loose floor mats could jam accelerator pedals.

In an October news conference, Bob Carter, general manager of the Toyota division, labeled talk of other problems, “unwarranted speculation.”

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The various legal actions have all been filed in federal court in California, where Toyota Motor Sales USA is headquartered.  They all seek to be certified as class actions, which would allow them to represent all Toyota shareholders in the U.S. who held the company’s stock on specific dates.  Damages, if the claims are upheld, could potentially reach into the billions of dollars.


Texas Court Orders Toyota Not to Destroy Evidence

Liability lawyers are attempting to reopen long settled cases.

by on Oct.01, 2009

A federal judge in Texas issued a Temporary Restraining Order yesterday to prevent the Toyota Motor Corporation, its subsidiaries and members of its in-house legal team from destroying any documents about the crash worthiness of all vehicles manufactured by the company.

It was the latest move by plaintiff’s attorneys to capitalize on the Biller matter, a case where a former Toyota employee accused Toyota of concealing evidence about rollover accidents. The accusations were publicized by the CBS news show 60 Minutes.

Toyota Motor Sales, the U.S. subsidiary of TMC vehemently denies the charges.

Dimitrios Biller, the former National Managing Counsel in charge of Toyota’s National Rollover Program, worked as a lawyer for TMS from 2003 to 2007. He has a prior history of suing employers, including a prosecutor’s office in California.

Dallas attorney Todd Tracy obtained the restraining order in connection with the filing of a 17th fraud case that seeks to reopen lawsuits in which he claims key evidence might have been withheld.