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Published On: Thu, Dec 27th, 2012

Toyota agrees to $1 billion settlement in acceleration lawsuit

With a proposed payout of more than $1 billion, one major chapter of a nearly four-year legal saga that left Toyota Motor Corp. fighting hundreds of lawsuits and struggling with a tarnished image has ended.

The proposed settlement, filed in a Federal District Court in California on Wednesday, would be one of the largest of its type in automotive history. If the agreement is approved by Judge James V. Selna, Toyota would make cash payments for the loss of value on vehicles affected by multiple recalls and install special safety features on up to 3.2 million cars.

While there are still individual personal-injury and wrongful death lawsuits pending against Toyota, in addition to an unfair business practice case brought by the attorneys general of 28 states, the class-action case was the largest legal action related to economic losses by vehicle owners.

The suit was filed in 2010 after numerous complaints were made to federal regulators that Toyota vehicles were accelerating suddenly without warning and causing accidents and injuries.

photo  by Mariordo

photo by Mariordo

Toyota has recalled more than eight million vehicles in the United States for problems related to floor mats that could become entangled with accelerator pedals, or pedals that could stick with the throttle open.

The class-action case contended that Toyota’s electronics systems were at fault.

After a long investigation, government officials concluded last year that there was no evidence that faulty electronics systems contributed to the acceleration issues. But a subsequent review of that inquiry by a branch of the National Academy of Sciences found that federal regulators had lacked the expertise to monitor electronic controls in automobiles.

“We kept fighting and fighting and we secured what we think was a good settlement given the risks of this litigation,” Steve Berman, a lawyer representing Toyota owners, told The Associated Press.

Toyota said it will take a one-time, $1.1 billion pre-tax charge against earnings to cover the estimated costs of the settlement. Berman said the total value of the deal is between $1.2 billion and $1.4 billion.

As part of the economic loss settlement, Toyota will offer cash payments from a pool of about $250 million to eligible customers who sold vehicles or turned in leased vehicles between September 2009 and December 2010.

“This agreement marks a significant step forward for our company, one that will enable us to put more of our energy, time and resources into Toyota’s central focus: making the best vehicles we can for our customers,” said Christopher P. Reynolds, Toyota’s chief legal officer in the United States.

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About the Author

- Writer and Co-Founder of The Global Dispatch, Brandon has been covering news, offering commentary for years, beginning professionally in 2003 on Crazed Fanboy before expanding into other blogs and sites. Appearing on several radio shows, Brandon has hosted Dispatch Radio, written his first novel (The Rise of the Templar) and completed the three years Global University program in Ministerial Studies to be a pastor. To Contact Brandon email [email protected] ATTN: BRANDON

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