By on March 12, 2010

Reuters reports that Orange County District Attorney Tony Rackauckas along with private attorneys filed the first U.S. consumer protection lawsuit against Toyota USA. The main charge is that Toyota has endangered the public by selling defective vehicles and engaged in deceptive business practices. From the 18 page suit filed Friday morning:

“Against this backdrop of fraud and concealment, Toyota has for decades touted its reputation for safety and reliability and knew that people bought its vehicles because of that reputation and yet purposefully chose to conceal and suppress the existence and nature of defects,”

The suit seeks to restrain Toyota “from continuing to endanger the public through the sale of defective vehicles and deceptive business practices.” Toyota said it has no immediate comment.

Rackauckas is a Republican who is also up for re-election this year. He defended his hiring of private attorneys, and said that they will be paid out of any proceeds from the lawsuit. One lone protester at the courthouse insisted that the suit was being done for political gain.

Rackauckas told reporters he was becoming increasingly concerned about the safety of consumers and that his office has jurisdiction because Toyota’s U.S. headquarters is in California.

The suit charges that Toyota knew about the defects in “selling and leasing hundreds of thousands of cars and trucks with defects that caused sudden unexpected and uncontrollable acceleration.”

From the Detroit News:

Legal experts said they were surprised by Rackauckas’ suit. “It’s very unusual for a product liability matter to turn into a criminal or consumer fraud investigation,” said Robert Mintz, a former federal prosecutor now a partner with McCarter & English in Newark, N.J.

Ed Higgins, co-head of the product liability practice group at Plunkett Cooney in Detroit, said the county’s action was “extremely uncommon.”

And thus it begins. Or continues.

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18 Comments on “So Cal Prosecutors File First Consumer Protection Suit Against Toyota...”

  • avatar
    Bill Wade

    It’s becoming a mystery to me why any foreign company would do business in the US. The potential to lose it all is becoming too high.

  • avatar

    Toyota should never have allowed itself to be extorted by Congress into ponying up $250 million for Washington’s UAW/GM friends at NUMMI. Now that everyone knows Toyota will roll over, lines will form on all sides.

  • avatar
    crash sled

    Yeah, it’s an election year… the silly season… and there are plenty of votes to be harvested in California, bashing Toyota for that NUMMI closure. Given the status out there in that state right now, no California politician wants to have to run on their own record, for sure.

  • avatar

    I must have missed Orange County District Attorney Tony Rackaucka’s entry to Edmunds for the million-dollar prize to find the flaw.

    • 0 avatar

      I hadn’t heard of Edmunds’ $1 million prize for whoever can replicate UA in a controlled environment. Great idea. I’d guess there’s about a 90 percent chance that their money is safe, and that if there’s something to be found Toyota or one of its dealers–who I assume won’t be eligible–will find it first.

      If I were an independent shop I’d be offering owners who experience UA cash to bring them the cars instead.

  • avatar

    They should include Consumer Reports as a co-defendant!

  • avatar

    So the Fruit-Loops are suing the Charlatans … and hilarity ensues.

  • avatar

    Is Rackauckas planning to run for CA AG against the former Gov Moonbeam?

    Secondly, if it was so serious, and he is so serious, shouldn’t he be consistent and seek an injunction against them selling anything until the “real” cause of SUA is discovered?

  • avatar

    Can you spell P-O-L-I-T-I-C-A-L?

    I hope the judge throws this out as a frivolous lawsuit.

  • avatar

    Toyota should threaten to close it’s American factories (just as GM threatend the Swedish and Canadian goverments) unless this charade ends.

    Heck, they should pull out of the U.S. of A and see Americans grovel to ask them back.

    Being American has reached a new low.

    • 0 avatar

      Were Toyota to pull out of the US market, it may as well kiss it’s *ss goodbye. The North American market is their cash cow, and there would have to be an incredible loss of judgement by company managers to commit such a suicidal move. Toyota and the other Asian makes don’t really make that much money in their home markets (or others for that matter), US sales provide the real profits for their companies.

      With the loss of a major competitor, the other companies would be hard pressed to fill the demand, but with over capacity being the largest issue in automotive business, equilibrium would be achieved in a few years. I don’t know who would benefit the most from a situation like that, but I would have to guess that almost ALL of the remaining players in the market would see a boost.

      In a nutshell: Not going to happen. Not if Toyota wants to survive for any length of time.

  • avatar

    Rackauckas is a Republican who is also up for re-election this year

    Generally, I think the American political system is one of the best in the world, and certainly better than Canada’s unbalanced model, but if I were to pick a fault, it would be the election of law enforcement and judiciary staff as it results in populism steamrolling rationality.

    Like this.

  • avatar

    In Virginia, no judges are elected, but city and county sheriffs are. In rural counties, the sheriff and his/her deputies are the only local form of law enforcement. But it just occurred to me that local district attorneys (prosecutors) are also elected.

  • avatar
    Robert Schwartz

    Another public servant who doesn’t have enough to do. The correct counter is to petition to dissolve his office.

  • avatar

    Why is it so hard to believe that Toyota would lie and cheat for a better bottom line. They are no different than our own home grown Wall Street types. Toyota is not the first or last company to make safety decisions based on cost or hide negative blowback from those decisions. Based on Mr Toyoda’s answers on The Hill they have something to hide. I say drag them thru court and see what happens.

  • avatar

    The fact that this clown is up for re-election says it all. Nothing beats free publicity especially slanted to appear that the politician has gone to bat for the beleaguered consumer.

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