By on March 9, 2010

Thanks to the “optics” (if not the reality) of the latest Toyota sudden unintended acceleration scare, the story has new legs just as Toyota and Exponent were hoping to cut them off. But as much as dramatic, cop-calms-killer-Prius headlines keep the Great Toyota Panic alive, so to does the fact that the 89-odd class-action lawsuits filed against Toyota could be worth over $3b to plaintiffs and their counsel. And that’s not counting any of the incidents in which people were actually injured or killed (which are actually relatively rare). No, that $3b+ is going to the truly deserving… and their lawyers.

According to the AP, one vein of suits in particular, which accuses Toyota of concealing safety defects and causing the resale value of its vehicles to decline, could be worth $3b on its own, according to a lawyer’s estimate of a $500 settlement being paid to 6m Toyota owners. But even that doesn’t explain what’s really driving this story: with settlement amounts projected in the billions, lawyers fees could easily reach $1b.

On March 25, a panel of federal judges will convene in San Diego to decide if may of the Toyota cases can be rolled into a single jurisdiction. If they can find judges who aren’t potential class members. As one judge scheduled to preside on that panel noted,

The court owns a 2000 Toyota Avalon SLX. In addition, the adult son of the court who has not lived in the court’s home for many years owns a 2005 Prius.

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13 Comments on “AP: Toyota Suits Could Top $3b...”

  • avatar

    “But even that doesn’t explain what’s really driving this story: with settlement amounts projected in the billions, lawyers fees could easily reach $1b.”

    What? You mean it’s not really about safety?!?!

  • avatar
    crash sled

    Ok, I’m having this disturbing fantasy of Toyoda-san hiring a bunch of black-masked ninjas, who rapelle down into every litigation outfit in this gaggle of frickin lawyers, and brutally asassinates the lot.

    • 0 avatar

      Your views intrigue me, and I’d like to subscribe to your newsletter.

    • 0 avatar

      I agree completely and I don’t even like Toyota. Until some sort of tort reform (with caps on EVERY type of lawsuit) becomes law the masked assassins don’t sound like a bad idea. All I ask is that the ninjas also decapitate the oxygen thiefs that utilize suing as a means of income too.

  • avatar

    It might be occurring to some that people might, just maybe, try to take advantage of this situation and find themselves behind the wheel of their Camry/Corrolla/Prius, call 911 and say, “I can’t stop my car. Please help!!” How much would that lawsuit yield them??

    This has spiraled out of control… bad choice of words I know.

    Is it time to short Toyota stock yet??

    • 0 avatar
      crash sled

      Hard to say whether or not we’ve passed the best short opportunity yet. If no smoking gun turns up, I’d say we have, and you can’t really gamble that one will. More probably, as the coming Government Motors financials come out, and that takes over the ADD-ridden media’s attention, Toyota’s stock will make a slow rise, as their incentive-boosted sales come on.

      However, the near term outlier would be Toyota’s introduction of the 100 EDR readers into NA next month. If those are placed into service, and the data turns up something litigative, and you get wind of it before the sh!t hits the fan, you could probably work Toyota stock like Gordon Geccko.

  • avatar

    I hadn’t thought about this before, but how in the world are they going to empanel juries for these cases? After you strip out jurors who have a Toyota product in the immediate family, then strip out jurors who have obviously decided the matter one way or the other, who’s left? Some die-hard domestic car buyers who don’t watch television news?

  • avatar

    I truly hate trial lawyers, almost as much as morons who don’t know how to handle their vehicle. When I heard the story about the “killer Prius” I ask the wife how much she thinks that idiot is going to be asking for. I hope they fry his stupid butt… for being stupid and behind the wheel. I do like the ninja idea!

  • avatar

    The point of the tort law system is encourage manufacturers to strive to make safe products and address safety problems they discover them by exposing them to liability if they make a dangerous product or fail to correct a defect. It sounds like Toyota decided to roll the dice and go for increased profits, and it looks like they are going to end up losing that bet.

  • avatar

    I hope that TTAC watches at least a sub-set of these lawsuits closely…

    I can’t wait to see just in how many cases,
    “Sweet, innocent, clean, uncorrupted, not at all on the take” Dr Gilbert is called as a for fee witness for the plaintiff.

    Dare I make a guess? Anyone want to start an office pool?
    Can I buy the “All of them” square for $5?

  • avatar

    According to the AP, one vein of suits in particular, which accuses Toyota of concealing safety defects and causing the resale value of its vehicles to decline, could be worth $3b on its own,

    This would set a fascinating precedent. If a manufacturer sells a car with a known defect, will consumers be able to sue as a class to recover lost resale value?

    Chrysler, General Motors, Jaguar and every S-Class, 7-Series, A8, etc, etc owner would have an absolute field day.

  • avatar

    Ninjas, huh? Well, like that old line about one hundred lawyers at the bottom of the sea, “it’s a start.” But don’t cry for Toyota. I checked the local dealer’s lot Sunday. The Monroney stickers still add the distributor’s pack of some vastly overpriced junk, and every car also has the mandatory dealer’s pack. If Toyota sales are down, it’s because they’ve decided higher margins are better than higher volume.

  • avatar

    The best I can see is $135M for the group of lawyers and nearly worthless coupons for the purchase or lease of a new Toyota that no more than 1% have a use for.

    Two billion? Five billion? Not in a billion years.

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