By on February 12, 2010

As we fumble towards a more complete understanding of Toyota’s stunning fall from grace, we’ve only uncovered a single class of people who truly stand to benefit from the last several weeks of hysteria: the lawyers, of course. Thanks to Toyota’s deep reserves of cash, every single possible damage incurred in the last several weeks will be picked over for an opportunity to sue the world’s largest automaker, and already the suits have crossed over into the realm of the absurd. Automotive News [sub] reports on latest class-action suit charge against Toyota, which seeks damages from the automaker for diminished resale value and lost use of recalled vehicles. These charges have been filed as class-action suits in “at least 30 states,” and lawyers suggest that the damages could run as high as $2b. Ford paid Explorer owners $500 a piece when it settled similar class-action suits in the wake of its Firestone safety scandal.

In addition to similar suits filed by owners of recalled models, a whole category of suits alleges that Toyota’s defects have not been properly addressed, opening class action suits to nearly every Toyota owner, including earlier non-recalled models. These range from braking issues (because who doesn’t want to believe that a rear-ender wasn’t their fault) to blaming electronic throttle control units for unintended acceleration. Suits have even been filed alleging that Prius headlights burn out to quickly. In the rush to pile onto Toyota, no shortcoming is going untouched.

Other suits have been filed to recover stock losses incurred by Toyota investors in recent weeks. One such suit alleges:

Toyota, certain affiliates and certain officers and directors misled investors when they failed a major design defect in the acceleration system in several models of their vehicles. Due to the allegedly false and misleading statements, Toyota stock traded at artificially inflated prices during the relevant period.

Because stock investment (like driving a car) should be a risk-free endeavor? Apparently so, as 25 firms with securities suits have already formed a legal consortium.

And before you write these suits off as nothing more than another symptom of America’s litigious society, consider that recall-related suits are being filed against Toyota around the world, including South Africa, where one plaintiff is complaining that his unintended acceleration complaints were ignored by Toyota for years.

All of which adds further uncertainty to the situation, as the Toyota recall scandal moves past being a safety scare (and a relatively minor one, as auto safety scares go) to being a legal bonanza. Unintended acceleration is a tough case to blame on the manufacturer, as safeguards exist that could have allowed drivers of runaway vehicles to stop acceleration (it’s called shifting into neutral). The hybrid brake issue is similarly difficult to prove, as plaintiffs are likely to be asked to prove that driver distraction or malfeasance weren’t factors in their individual cases.

For now though, a media frenzy has clearly shifted interest in the Toyota case from keeping people safe to making an easy buck off of a deep-pocketed and deeply-embarrassed company. After all, the lawyers know that the more Toyota fights these cases, the worse it is for their PR. How ironic it would be if Toyota had to match the $2b it’s spending on vehicle repairs with settlements to make the legal gadflies go away.

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39 Comments on “Toyota Lawsuits Breaking Out All Over...”


  • avatar
    dvboard

    Welcome Toyota to the consumers that GM, Ford, etc. have been trying to get rid of for years. Enjoy your stay…

    • 0 avatar
      Hippo

      If traditional clients start to associate Toyota with this segment of consumers it would be the kiss of death. Ask Cadillac.

    • 0 avatar
      GS650G

      True that. Only this time they consider their Toyota to have guaranteed resale value. An investment grade auto purchase. Considering the cash paid along with interest I’d say they got burned.

      A used American car is still cheap to buy, fix and insure. Yeah they suck in many ways but they get you there and back home again.

  • avatar
    ClutchCarGo

    Actually, fighting specious lawsuits could be a big PR win for Toyota as long as they don’t fight over real safety issues. There is already a pro-Toyota backlash forming over the media over-attention and the piling on by all manner of opposition parties. The only thing most people dislike more than soulless corporations are venal lawyers, and setting up Toyota corp as the poor victim of those money grubbing tort attorneys could move public opinion back in their favor.

  • avatar
    Truckducken

    Too bad Toyota was so effective at sweeping this under the rug for so long; it’s only going to cost them more in the end.

    Bloomberg: Ex-NHTSA Staffers At Toyota

  • avatar
    SkiD666

    I have seen it reported that the Camry will not shift out of gear into neutral when WOT, does anyone know if that is true or not?

    • 0 avatar
      210delray

      Many people claimed to have tried it on Edmunds, and found no problems shifting into neutral at WOT, at speeds up to about 60-70 mph. No one reported trying it at 100+ mph.

  • avatar
    turbobeetle

    Perhaps someone has already said this, I’ve been too busy to read all the blogs here.
    Does anyone else find it even a little funny that GM added 3rd shifts to its plants when it seemed like such a bad idea and then all of a sudden Toyota & Honda are getting hit to the ground by every corner of this country?

    Or maybe I just have my foil hat on too tight today.

    • 0 avatar
      educatordan

      Take off the tin foil and put it over a pot roast, add vegetables and roast low and slow. It will be a much better way to spend the day.

    • 0 avatar
      turbobeetle

      LOL thanks!

      Funny thing tho. Maybe someone can help me with this.

      I’m in the market for a new car. When comparing insurance rates I found that it would cost more to insure a Scion tC than what Geico referred to as a “worst case scenario” for a Mustang. Cobra convertible?, Shelby GT500???

      I confirmed these from their call center as well as their website.

    • 0 avatar
      educatordan

      WOW that’s as bad as when my grandmother was charged “sports car” insurance rates for her Escort EXP in the mid 80s!

    • 0 avatar
      Steven02

      You will also find that it cost more to insure a Camaro than a Corvette.

      You have to remember the drivers of these vehicles are typically older drivers. A Scion tC appeals to a much younger audience, has younger drivers, more accidents etc etc. Also, I believe all (or most) parts of the Scion brand come from Japan, making them more expensive to repair.

    • 0 avatar
      Kendahl

      Some insurance companies apply an across-the-board surcharge for certain vehicles. According to my agent, State Farm does not. The liability portion of my premium is based on the me, not my car. It would remain the same if I traded my old Subaru for a Porsche 911 GT3. Collision and comprehensive premiums are based on the car. Perhaps, they make it up there so that the total premium is no different from the other guys’.

  • avatar
    Brewster123

    Never thought I would read “As we fumble towards a more complete understanding of Toyota’s STUNNING FALL FROM GRACE” in my lifetime. But it’s ok. Honest. Even if I do own a couple of older copies. Thanks Edward!

  • avatar
    Robert.Walter

    Like it or not, this is one of the checks-and-balances which keeps the industry (mostly) honest because after an episode like this everybody gets religion.

    • 0 avatar
      crash sled

      Automakers might get with the tent revival spirit for a short time, but deep deep down inside, they’re atheists. You gotta burn one of those pagans at the stake.. human sacrifice… every once in a while.

      I think Chrysler might be Scientologists, however.

    • 0 avatar
      educatordan

      lol, I think GM and Chrysler are hoping for a “deus ex machina” solution to their problems.

  • avatar
    chonralda

    amen!

  • avatar
    SCHONHAMMER

    You knew it was only a matter of time before the poison began to seep into Toyota.
    When all you care about is gunning for #1 you’ll sacrifice quality & dependability.
    Toyota has officially been corrupted by the “American way of doing business”.
    Hey, these guys learned from the best of the best!
    GM……Chrysler…..Ford.
    Build inferior components/systems, and then stall, deny, and cover it up!
    Does Jim Press still feel his former buddies build the best car out there now? For years he spit that out to anyone who’d listen
    BTW..
    Drive by wire sucks.
    Push button ignitions suck.
    Gear shifter mechanisms without any form of cable suck.

  • avatar
    skcusmg

    Perhaps someone has already said this, I’ve been too busy to read all the blogs here.
    Does anyone else find it even a little funny that GM added 3rd shifts to its plants when it seemed like such a bad idea and then all of a sudden Toyota & Honda are getting hit to the ground by every corner of this country?

    Or maybe I just have my foil hat on too tight today.
    …………………….
    It’s more than a little funny. Joining up all the dots and seeing something a tad underhanded is not so far fetched. Be careful though, there are a few regular contributers to this site that jump all over anything that they see as a conspiracy theory. They don’t like thinking outside the box or they are Obama worshipers or both!

  • avatar
    210delray

    How can people sue for diminished resale value or diminished stock value when either or both can turn around once the current hysteria passes?

    If this isn’t frivolous, I don’t know what is!

  • avatar
    crash sled

    So I take it that Toyota might be moving to Montana, soon?

  • avatar
    Steven02

    UA is not tough to blame on the auto manufacture. It is there defect. Could the outcome have been different if the operator put it into N, yes. But, why was the operator in that position in the first place, a defect of the manufacture. The more reasonable and intuitive safeguards, which are being installed now, like brake override, should have been there from the first place.

    I don’t see how you think this is so hard to blame on Toyota. I also don’t understand how you assume that everyone is going to know there car well enough to get out of every situation their car could encounter. I heard on the radio yesterday so many people saying to pump the brakes because of snowy conditions in Dallas. Except this doesn’t apply to people with ABS systems in their cars. Pumping the brakes in a Toyota with UA would also be a problem, but people are going to do it. Toyota is at fault here.

    A defect car caused the situation. The car company is at fault.

  • avatar
    BMWfan

    So I take it that Toyota might be moving to Montana, soon?

    To be a dental floss tycoon?

  • avatar
    crash sled

    Yeah, they’re gonna raise it up, and wax it down.

    In a little white Corolla that they can sell up town.

    By themselves they wouldn’t have no boss,

    but they’d be immune to unintended acceleratioin lawsuits under Montana tort rules.

    yippi ti yo ti yaaaa-aaay!

  • avatar

    I was listening to a news radio show and the announcer did a live paid ad from Toyota about going to Toyota.com to find recall details. That announcement was immediately followed by a recorded ad from a law firm with a website something like toyotalegal.com.

  • avatar
    Robert.Walter

    BREAKING (literally) NEWS – And the Toyota Recalls Keep On Coming:

    Bertel, Ed,

    BBC is reporting just now that Toyota will recall 8k Tacomas due to breaking front propeller shafts.

    Edit: (Apparently this is a Dana-called recall and affects Ford and Nissan too.)

    Horidoo!

  • avatar
    Moparman426W

    Saw in the newspaper yesterday that toyota dealers are offering free “manicure services” at many of their delaerships. If one of the domestic automakers were doing something like this Paul or Ed would have been having a field day with it by now.

    • 0 avatar
      Robert.Walter

      Actually manicures are a brilliant idea … I can trim my own nails, but not my hair, so as an option for the guys I’d also recommend offering a haircut; takes as long and costs as much.

      (My better half doesn’t think manicures and haircuts go far enough and so recommends chippendales for the girls and lap dances for the guys.)

  • avatar
    GS650G

    Welcome to the Fourth Branch of Government.

    All of a sudden the most reliable cars on the road are full of defects worthy of million dollar damage awards. Maybe they should sue Consumer Reports for recommending Toyota for 15 years.

  • avatar
    ASISEEIT

    I just watched a four part report from CNBC with interviews with Toyota’s vice president along with others you might want to check it out. http://articles.moneycentral.msn.com/insurance/insureyourcar/toyotas-deadly-secrets.aspx

    • 0 avatar
      Robert.Walter

      Interesting article … makes me feel better because it validates the complaints I have been posting here on TTAC (I was trying to be fact-based and impartial in my analysis and commentary, but several times had to step-back and question the degree to which i was condemning Toyota management for their lousy performance and to me what seemed like blatent obstructionism and lying.)

      The article is quite damning and in my mind provides the smoking gun answer to my query “what did they know and when did they know it?”:

      (Article also speaks of Toyota intransigence over recalling Tundras with rotting fuel-tanks, but I’ve edited it here to focus on mats and pedals)

      “”Separately, since December 2008 Toyota’s European unit had been looking into a problem causing cars in Ireland and England to surge or fail to slow. After months of testing, Toyota found the culprit: a plastic part in the pedal mechanism also widely used in the U.S.

      Toyota redesigned the pedals for new cars coming off the assembly line. But it didn’t issue a recall in Europe or notify U.S. regulators. Nor did Toyota alert its U.S. unit to the situation in Europe, according to a person familiar with the matter.

      Last month, Toyota’s Sasaki said the company didn’t alert U.S. regulators then because it didn’t see in the U.S. specific consumer complaints about sticky pedals, although a few complaints started to come in by early autumn.

      The Europe issue hasn’t been linked to accidents and isn’t related to sudden acceleration because it happens near idle speeds. Toyota says it’s looking into other potential causes.
      .
      .
      .
      At NHTSA, patience was wearing thin. Its deputy, Ronald Medford, summoned Toyota officials to a Sept. 25 meeting in Washington, and told them they needed to act faster to more fully resolve the mat problem. Replacing mats wasn’t enough, he said. Toyota also had to alter its gas pedals to make sure they couldn’t get caught on mats.

      On Oct. 5, Toyota recalled 3.8 million vehicles to fix the floor-mat issue, its largest recall ever.

      But tensions kept rising. On November 3, Toyota put out a statement saying NHTSA had concluded that “no defect exists” in the recalled vehicles. A day later, in an unusually public rebuke, NHTSA released its own statement calling Toyota’s “inaccurate and misleading.”
      .
      .
      .
      Amid the clashes, NHTSA’s Medford and other officials flew to Japan. On Dec. 15 they stood before about 100 Toyota executives and engineers and explained Toyota’s obligation to comply with the U.S.’s defect-recall process, a Transportation Department official said.

      Later, Medford met with a smaller group of Toyota executives. According to the official, Medford told them bluntly: Toyota was taking too long to respond to safety issues. He reminded them that Toyota is obligated under U.S. law to find and report defects promptly.

      Sasaki, Toyota’s quality chief, said the meeting included a “debate” in which NHTSA objected to Toyota’s view that users needed to install the mats properly. NHTSA’s response, he said, was Toyota couldn’t expect that from every consumer. “NHTSA people expressed disbelief over Toyota’s view, and we received some harsh words from them,” he said.

      On Jan. 4, NHTSA’s new chief, Strickland, was sworn in. His first crisis walked in the door Jan. 19, when two Toyota executives told him that Toyota’s Japan headquarters had known there was a flaw in the pedals, according to a person familiar with the situation.”\"

      Comments:
      Dr. Deming would probably shake his head in disbelief … and then remind us that there is nothing wrong with a company that can be attributed to anyone in the company but the management.

      The NHTSA filter for short duration was inappropriate. The long duration events needed to be investigated as well, and as they were less numerous a full follow-up was probably possible. The only criteria needed to be used here was “what was the post-crash condition of the brakes?” Any vehicle with damaged/overheated brakes would need to be subjected to a deeper inspection.

      Toyota totally failed to apply the lessons from the European pedal problems to the US market. To me this represents a lack of due-care.

      I’ll leave it to someone else to search for Toyota’s Foreign Recall Report on the NHTSA webpage (as I’ve explained elsewhere on TTAC, in the event of a foreign-recall, the TREAD Act requires the OEM to submit of such a report, explaining reasons why a US-recall is not required) but unless there is something magic about the difference between RHD and LHD, the US, at every time, somewhere, has climatic condtions to match nearly every market in the world, so if it happens in UK, it is reasonable to believe it can happen in the US (and vice-versa.) If Toyota submitted such a report to NHTSA, they had better have had a bullet-proof rationale why UK was different from the US, else this will go to the heart of credibility. Conversely, NHTSA will have to offer a strong explanation why any reason submitted by Toyota was adequate.

      If TMC is demonstrated as trying to game the system, or just blatently lied or cheated, they will be deserving of receiving maximum fines possible. Conversely, if NHTSA overseers are demonstrated as acting incompetently, or not in line with their mission, somepeople need to be fired.

    • 0 avatar
      Robert.Walter

      One more comment: (I took too long to write my above post, so I can’t edit it … after thinking a bit more about it, I read the text again … I don’t think anyone will find a Foreign Recall Submission under TREAD, see the folowing quote from the article:)

      “Toyota redesigned the pedals for new cars coming off the assembly line. But it didn’t issue a recall in Europe or notify U.S. regulators.”

      Somebody in Congress needs to ask the question if this failure to recall, or to do a “silent recall” (a.k.a. “customer satisfaction initiative”) was a deliberate, and calculated, attempt to circumvent having to do the Foreign Recall submission required under TREAD.

  • avatar
    Moparman426W

    Good idea, Robert. And the haircuts wouldn’t cost them much since not many men drive Toyotas.

  • avatar
    don1967

    As someone who has derived morbid pleasure from watching Toyota’s public ass-whooping return to humility, I draw the line when lawyers start jumping on the bandwagon. This is becoming a media circus, and as Edward suggests the lawyers will be the biggest winners.

  • avatar
    ohsnapback

    Here you have a case of Toyota sweeping problems, many involving the safety of many of its customers, under the rug…nix that…

    …Toyota actually had lobbyists ensure that no active governmental investigations were undertaken as complaints (along with injuries and fatalities) mounted by the day, which were apparently the result of a now verifiable propensity of Toyota vehicles to accelerate absent any driver input, and TTAC’s response is…wait for it…

    …let’s roast the lawyers.

    Classic.

  • avatar
    Suprarush

    November 26, 2009

    Transport Canada applauds Toyota’s action to protect consumers
    OTTAWA — Transport Canada today announced that Toyota Canada has identified a set of corrective measures to assist its Canadian customers who are affected by a safety issue involving the accelerator pedal on certain Toyota and Lexus models.

    Transport Canada has worked with Toyota Canada on this issue to ensure corrective actions were taken and that the safety of consumers is protected. Canadian owners of affected Toyota and Lexus vehicle models will be notified directly by Toyota about these measures. Transport Canada will require Toyota Canada to report back to the department on its progress, as per the terms of the Motor Vehicle Safety Act.

    Toyota Canada announced today that there is no risk of accelerator pedal entrapment when compatible Toyota and Lexus Canadian-designed all-weather floor mats are properly used in the affected models, as they are different in design and material composition than the Toyota-supplied mats in the United States.

    Toyota Canada also said that properly installed and secured compatible carpet floor mats do not give rise to pedal entrapment. Today’s notice follows an advisory in late September that driver’s side floor mats be removed from certain Toyota and Lexus vehicles.

    Transport Canada is pleased that Toyota Canada is undertaking a safety improvement campaign for Canadian customers to provide information about:

    reconfiguration of the accelerator pedal for the seven affected models;
    reconfiguration of the shape of the floor surface to increase the space between the accelerator pedal and the floor for the Lexus ES350, Camry and Avalon models; and
    installation of a brake override system for the Camry, Avalon and Lexus ES350, IS350 and IS250 models.
    A safety campaign will also be initiated for Toyota Venza vehicles equipped with a genuine Toyota Canada driver’s side all-weather floor mat. Until owners of Venza vehicles receive their notice of the campaign, Toyota recommends that they remove any genuine Toyota driver’s side all-weather floor mat from their vehicle. Toyota has determined that the genuine Toyota carpeted floor mat is compatible with the vehicle and recommends at this time that only the original equipment carpet floor mat be installed, using the retaining clips provided. Customers should also ensure it is properly installed and secured, that it is not flipped over with the bottom-side up and that one floor mat is not stacked over another. If a customer does not know or is not sure whether the driver’s side mat in the vehicle is correct for or compatible with his or her vehicle, Transport Canada advises the customer to remove it. For additional information about floor mats, customers can visit their Toyota dealership, toyota.ca or the Transport Canada website at http://www.tc.gc.ca/eng/roadsafety/tp-tp14665-v200701-menu-241.htm.

    Toyota Canada will be providing an educational advisory to other Toyota and Lexus customers with information on proper mat installation procedures. Toyota Canada reminds all its customers to register any address or ownership changes to allow for prompt notification.

  • avatar
    Suprarush

    Notice the date on this recall and how Toyota has “struggled” to keep this a secret as well as bully Transport Canada.

    Road Safety Recalls Database Print this Page

    Transport Canada Recall # 2006168
    ——————————————————————————–
    Recall Date 2006/07/11
    Notification Type Safety Mfr
    System Fabrics
    Manufacturer Recall Number 609
    Units Affected 14,510
    Category SUV
    Recall Details
    On certain vehicles, due to the improper installation of the retaining clips for the floor carpet cover located in front of the center console, there is a possibility that the clips may become loose. If both clips separate from the floor carpet cover, the cover may lean toward the accelerator pedal, causing interference with the accelerator pedal rod. In the worst case, the accelerator pedal may become stuck in a partially depressed position when returning to the idle position. Correction: Dealers will install new clips.

    Make Model Model Year(s) Affected
    LEXUS RX 330 2004 2005 2006
    LEXUS RX 400H 2004 2005 2006
    TOYOTA HIGHLANDER 2004 2005 2006
    TOYOTA HIGHLANDER HV 2004 2005 2006


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