So you think when a big company gives you (and your lawyer) a sizable sum to settle a lawsuit, the lawsuit is settled? To their horror, Toyota just found out that it’s not over when it’s over. Toyota could find itself wide open. Possibly to hundreds of old lawsuits that were settled and could haunt them again. Five years ago, Pennie Green’s Camry rolled over. Of course, it was Toyota’s fault, why don’t they build roll-over proof Camrys. The woman was paralyzed. The personal injury suit was settled for $1.5 million. That should be it. Then Ms. Green and her lawyer had a change of mind that could change the world of jurisprudence. At least in America … (Read More…)
Generally speaking, official prospectus information tends to run on the alarmist side, warning investors of any and all possible problems, regardless of how likely they are to take place. Which is why you rarely see news organizations like Reuters pick up on prospectus warnings, like today’s story on a Volkswagen warning that its merger with Porsche could be scuttled by lawsuits filed by angry hedge funds. Porsche’s notorious “short squeeze” of hedge funds who were speculating on VW stock in the leadup to its planned takeover has drawn lawsuits in several countries which, according to VW’s recent capital increase prospectus, could: (Read More…)
The Detroit News has just published a quote that allegedly comes from a January 16 email from Toyota Motor Sales USA group vice president for environmental and public affairs Irv Miller to “company officials in Japan.” Miller’s quote reads:
I hate to break this to you but WE HAVE a tendency for MECHANICAL failure in accelerator pedals of a certain manufacturer on certain models. We are not protecting our customers by keeping this quiet. The time to hide on this one is over. We better just hope that they can get NHTSA to work with us in coming with a workable solution that does not put us out of business.
As if to confirm that GM’s benefit obligation situation could actually be worse than today’s GAO report lets on, Automotive News [sub] is reporting that the UAW has sued GM over $450m in unfunded healthcare obligations for Delphi retirees. GM promised to fund a $450m Voluntary Employee Benefit Association for Delphi retirees in 2007, and Delphi’s bankruptcy court confirmed the commitment in last October. But, according to the UAW suit:
the UAW made a written demand that the company honor its contractual obligation to make the foregoing payment [last October... but] that UAW demand was rejected and since that time the company has failed and refused to make the contractually required payment.
That obligation apparently was not voided by GM’s bankruptcy, although The General’s spokesfolks have yet to officially comment on the UAW’s suit.
The legal angle to the Toyota recall story has been a source of constant amusement, from an early attempt to prevent Toyota from enacting its gas pedal fix, to news today [via Reuters] that at least 30 class-action suits have been filed since the recall began. “This is going to a little cottage industry all of its own,” says Matt Cairns of DRI, the Voice of the Defense Bar, the largest U.S. civil defense attorney association.
In 2007, over 120,000 Civic Hybrid owners had a beef with Honda. So much so, in fact, that they sued the Japanese company. What do you reckon the reason could be? Unsafe cars? Think again. Poor build quality? No, they sued Honda because their Civic Hybrids didn’t get the stated fuel mileage. New York Times’ Wheels Blog reports that 2 plantiffs, John True of Ontario, California, and Gonzalo Delgado of Chino Hills California along with 120,000 other Honda Civic Hybrid owners argued in the United States District Court for the Central District of California that they were only getting 31 mpg instead of the advertised 49mpg in the city and 51 mpg on the highway. The plaintiffs believe that Honda’s advertising led them to believe that the Civic Hybrid would get better fuel economy than is likely in real world driving. Needless to say, the plaintiffs weren’t challenging the EPA methods of predicting mileage, just that Honda, allegedly, deceived customers by not making it clear that they were unlikely to achieve the EPA figures. Honda, naturally, have a different take.
The AP reports that GM is suing supplier JTEKT North America Inc. of Plymouth, MI for faulty steering systems used in 2005 model year and later Cobalt, G5 and HHR models. GM’s suit alleges the JTEKT steering systems exhibited “excessive gear backlash,” causing a variety of noises that the General has spent $30m fixing under warranty so far. “JTEKT contends the components all met the specifications and testing requirements that GM gave it,” says the supplier’s lawyer. “The issues do not affect the operator’s ability to control the vehicle. This is a noise issue.” GM admits that the issue does not affect safety, but claims total repair costs could continue to rise as more vehicles receive upgrades under warranty. Current Cobalts and derivative models have received upgrades, although the AP does not specify when they took place. Keep an ear out for this problem if you’re considering a used Cobalt.