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Partner Post: Toyota Prepares for Another Settlement

Toyota Enters Settlement Negotiations for Sudden Acceleration Cases

Written by James P. Nevin james.jpg 

Toyota is entering settlement talks for hundreds of pending federal and state lawsuits, alleging sudden unintended acceleration problems with its vehicles that have led to deaths and injuries.

The U.S. District Judge James Selna in California federal court put a halt to pending lawsuits while lawyers for Toyota and plaintiffs work to resolve the cases. A similar process will be established for cases in California state court, according to Toyota. The automaker currently faces more than 200 proposed class actions and 500 individual lawsuits over sudden acceleration issues.

The settlement process is open to all plaintiffs and is scheduled to begin in February, according to the order. It will apply to personal injury, wrongful death, and property damage lawsuits resulting from the alleged acceleration issues. The cases that do not settle will go before mediation, and if still unresolved could return to trial.

Toyota was likely motivated to settle by a number of growing legal troubles. The automaker has already spent as much as $2 billion in legal costs, and its reputation for quality has been tarnished. In the last few years it has worked to restore its name and has achieved fast-growing sales, and has enjoyed higher profits and stock prices.

Just 2 months ago, Toyota lost its first sudden acceleration case after a jury in Oklahoma (a typically conservative jurisdiction) found a Toyota Camry's electronic throttle system defective. The vehicle in the case was in a 2005 crash that killed one woman and seriously injured another.

The jury found that Toyota acted with "reckless disregard," despite being aware of reports of problems with its cars. Toyota decided to settle after the jury reached a verdict of $3 million against it, avoiding the punitive damages phase of the trial.

Before Oklahoma, Toyota had won its first three sudden-acceleration trials.

Toyota has settled a number of other of sudden acceleration claims. Last year, Toyota agreed to pay $1.6 billion to resolve a class-action case filed by Toyota and Lexus owners, claiming the problem reduced the value of their vehicles. It also paid $10 million in late 2010 to settle a suit involving a California Highway patrolman who died with his family in a horrendous crash in 2009 that was captured in a 911 recording.

The case brought national attention to the sudden-acceleration issue. Toyota recalled more than 10 million vehicles worldwide for problems including floor mats that caused the accelerator to become stuck. Its executives were subjected to congressional hearings that resulted in the company paying more than $65 million in fines for violating federal vehicle safety laws.

The federal case is In re: Toyota Motor Corp Unintended Acceleration Marketing, Sales Practices and Products Liability Litigation, U.S. District Court for the Central District of California, No. 10-2151.

Sources: 1, 2, 3, & 4

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