Chicago Business Litigation Lawyer Blog
After two years, Toyota has finally agreed to settle the class-action lawsuit regarding unintended acceleration in its vehicles. If approved, the settlement, filed in a Federal District Court in California, would make cash payments for the loss of value on vehicles affected by the multiple recalls. The settlement also includes installing special safety features on about 3.2 million cars.
The suit was filed in 2010 after complaints were made to federal regulators that Toyota vehicles were accelerating suddenly and without the driver’s intent, causing accidents and injuries. Toyota has recalled more than eight million vehicles in the U.S. for problems related to pedals that could stick with the throttle open or get hampered by floor mats, which could get entangled in the pedals.
The class-action lawsuit alleged that Toyota’s electronics systems were at fault. A long investigation, conducted by government officials, found no evidence that faulty electronics contributed to the acceleration issues. However, a subsequent review of that investigation, conducted by a branch of the National Academy of Sciences, found that the federal regulators conducting the investigation did not have the expertise necessary to monitor electronic controls in automobiles.
The National Highway Traffic Safety Administration fined the car company more than $60 million for failing to inform regulators of the sudden acceleration issues. Toyota, on the other hand, has largely attributed these acceleration issues to driver error.
The proposed settlement includes a fund of $250 million to pay claims to former owners of cars affected by the acceleration recalls. Because of the large number of claimants though, each will receive a relatively small amount from the settlement. The company has also agreed to install brake override systems on cars whose pedals could stick or become trapped in floor mats. The installation of those systems is already under way, although about 550,000 cars have yet to receive the equipment.
The settlement also provides a customer support program for more than 16 million current Toyota owners who will be eligible for repairs on certain parts for up to 10 years. Additionally, Toyota will contribute $30 million to finance automotive safety research related to driver behavior and unintended acceleration.
The lead law firm for the plaintiffs estimated that the settlement could end up at a total around $1.2 – $1.4 billion. That makes it one of the largest settlements of its kind in automotive history.
One of the reasons people suspect Toyota made the offer is to prepare for the numerous individual personal-injury and wrongful death lawsuits, which are still currently pending in the courts. Of course, another reason to settle is to simply get past this. Before the acceleration issues, Toyota had enjoyed a pristine reputation of quality, safety, and reliability in their vehicles. Following these allegations, the company experienced a drop in sales, particularly in the United States. In 2012 though, the company’s sales in the U.S. rose about 28 percent, which is double the pace of growth for the overall market.
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