In a filing today with the U.S. Securities and Exchange Commission, Japan-based Toyota Motor Corporation outlined the legal actions pending against it. About 200 class actions have been filed against Toyota since November 2009 alleging that some Toyota, Lexus and Scion vehicles contain defects that lead to unintended acceleration.
Toyota said that the unspecified amounts accrued as of 31 March 2011 for legal proceedings and government investigations are not material to Toyota’s financial position, results of operations, or cash flow.
However, Toyota also said that it cannot currently estimate its potential liability, damages or range of potential loss, if any, beyond the amounts accrued. This means that the resolution of the lawsuits could have an adverse effect on Toyota’s financial position, results of operations and cash flows.
Ford Motor Company’s attempt to improve its credit rating was recently impeded when a class action suit previously considered by Ford as not material resulted in a $2 billion judgement against it. (See Ford to Appeal $2 Billion Ruling for Overcharging Dealers)
Many the Toyota lawsuits allege that malfunctions involving the floor mats and accelerator pedals do not cover the full scope of possible defects related to unintended acceleration. Instead, they claim that Toyota’s Electronic Throttle Control System-intelligent (ETCS-i) is the cause and that Toyota has failed to inform consumers despite its awareness of the problem.
Most of these cases seek recovery for the alleged decrease in value of the vehicles. In April 2010, 190 federal cases were consolidated for pretrial proceedings into a single multi-district litigation in the United States District Court for the Central District of California. This consolidated federal lawsuit is in its early stages and has included document production, depositions and various motions, in what will likely be a long, draw out proceeding.
In addition, there are about 325 individual personal injury cases relating to unintended acceleration pending against Toyota, the federal cases have been or will be consolidated into the multi-district litigation.
The remaining individual personal injury cases alleging unintended acceleration remain pending in various state courts in the United States.
There are also ten class actions in various state courts, including California. The claims are similar to the class actions in federal court. One of the California class actions was filed by the Orange County District Attorney – home of Toyota in the U.S. This case seeks statutory penalties claiming that Toyota sold and marketed defective vehicles and that consumers have been harmed as a result of decrease in value of their vehicles.
Beginning in February 2010, Toyota has also been sued in approximately 20 class actions alleging defects in the antilock braking systems in various hybrid vehicles that cause the vehicles to fail to stop in a timely manner when driving in certain road conditions. The plaintiffs seek an order requiring Toyota to repair the vehicles and claim that all owners and lessees of vehicles, including those for which recalls have been implemented, should be compensated for the defects related to the antilock braking systems. These cases have been consolidated into two, one in federal court in the United States District Court for the Central District of California and one in state court in the Los Angeles County Superior Court.
Toyota has also received subpoenas and formal and informal requests from various states’ attorneys general, including the Executive Committee for a group of 28 states’ attorney general, and certain local governmental agencies regarding various recalls, the facts underlying its recent recalls and customer handling related to those recalls. Toyota said it is cooperating with the government agencies in their investigations, which are on-going.
See also:
- Toyota Adds Wrong-Way Driving Alert to Navigation Systems,
- Toyota Recall Study Finds Adversarial Relationship with NHTSA,
- DOT Releases Long Delayed Toyota Unintended Acceleration Report, Exonerates Self, Claiming It Was Right All Along,
- Toyota Prevails Against Former In-house Attorney Biller. Self Proclaimed Whistle Blower Ordered to Pay Toyota Millions,
- Toyota U.S. Sales Troubles Continue as 2010 Sales Results are the Same as a Depressed 2009. Overall the Market Grew 11%
- Toyota Motor Fined Another $32.425 Million for Safety Defects
