Toyota $1B+ Acceleration Class Action Settlement is Biggest in Auto History
December 27, 2012 11:25 AM
comment(s) - last by
Settlement will cover equipment installation, compensation for lost value
Steve W. Berman
, Managing Partner at Hagens Berman, has achieved a key victory over what is expected to be the world's largest automaker in 2012.
Toyota Motor Comp. (
) on Wednesday filed documents to settle
a major class action lawsuit
organized by Mr. Berman over
in a variety of models. The case was being held in
U.S. District Court for the Central District of California
, in Santa Ana, Calif.
[PDF], Toyota will set aside an estimated $1.2-1.4B USD, making the settlement agreement the biggest in automotive history, according to Mr. Berman's team. The settlement fund will be used to compensate the owners of 3.25m Toyota vehicles for lost resale value. The owners will also be eligible for free installation of a brake-override system.
After a fiery crash of a Lexus (Toyota's luxury brand) killed four in California in 2009, the
National Highway Traffic Safety Administration
(NHTSA) launched a formal investigation into acceleration issues. While
some suspected electrical origins
for the issue,
no such issue was ever replicated
. Ultimately the problems were
blamed on faulty floor mats
, which could entrap pedals on the Toyota vehicles, leaving drivers unable to brake. Millions of vehicles
in the company's largest recall ever. Toyota was forced to also
temporarily suspend sales in 2010
Toyota's acceleration issues were eventually pinned on faulty floor mats
[Image Source: Today's Machining World]
Toyota's decision to settle the outstanding litigation and move ahead, commenting, "After two years of intense work, including deposing hundreds of engineers, poring over thousands of documents and examining millions of lines of software code, we are pleased that Toyota has agreed to a settlement that was both extraordinarily hard-fought and is exceptionally far-reaching."
Toyota chief North American legal officer -- Christopher P. Reynolds -- sought to take the opportunity to restate Toyota's point that its electronic systems were never proven to have issues, remarking, "This was a difficult decision -- especially since reliable scientific evidence and multiple independent evaluations have confirmed the safety of Toyota’s electronic throttle control systems."
3.25 million vehicles are covered by the settlement. [Image Source: AP]
He adds, "[Ultimately] we concluded that turning the page on this legacy legal issue through the positive steps we are taking is in the best interests of the company, our employees, our dealers and, most of all, our customers."
Toyota certainly has enough resources to cover the settlement. The company witnessed a rocky 2011 due to parts shortages from the tsunami and related domestic issues (see: Fukushima nuclear disaster). But this year Toyota is expected to regain the sales crown, which was last year held by General Motors Comp. (
). Toyota is
expected to announce
sales rose 22 percent in 2012 to 9.7m vehicles, despite a Chinese boycott due to a territorial spat, more
, and more recalls.
This article is over a month old, voting and posting comments is disabled
RE: Public Perception
12/27/2012 4:26:34 PM
There was one incident where the guy allegedly with the runaway acceleration problem straight-out refused to shift into neutral despite being told over the phone by the emergency workers to do so.
Honestly, considering the first reaction would be to step on the brake (fewer people would consider the ignition first) the finding that most of the cases were just people jamming the acceleration by accident instead of the brakes makes sense.
Standing on the brakes would stop any modern car.
RE: Public Perception
12/29/2012 11:28:07 AM
People are dumb.
"We basically took a look at this situation and said, this is bullshit." -- Newegg Chief Legal Officer Lee Cheng's take on patent troll Soverain
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