There has been a great deal of attention about Toyota’s recent recalls. Toyota’s sales fell 16% in January alone and Toyota’s executives have apologized and appeared before Congress. Toyota has recalled 8.5 million vehicles for ill-fitting floor mats, sticking gas pedals and braking flaws. Toyota has been accused of not issuing the recalls soon enough and, in addition to these troubles, the company now faces numerous individual and class action lawsuits throughout the United States.
Personal Injury. Lawsuits in both state and federal courts include personal injury lawsuits stemming from allegations of sudden acceleration problems in various Toyota vehicles. The personal injury suits include claims of fraud, breach of warranty, misrepresentation, unjust enrichment, deceptive trade practices and even serious injury and wrongful death. Some lawsuits seek punitive damages claiming Toyota’s original explanation that floor mats were to blame led to a delay in the recall.
Economic Damage. In addition to the personal injury suits, MSNBC reports over 40 economic consumer class action suits have already commenced in 30 states. These suits focus on the economic damages resulting from the car defects, including decreased resale value. In Florida alone, at least three class actions have already been filed and more are expected. One suit focuses on the difference in market value due to the defect and alleges $1 billion in damages, both compensatory and punitive, for violations of state consumer protection laws, breach of express and implied warranty, and unjust enrichment. Heidenreich v. Toyota Motor North America Inc., N.D. Fla., No. 4:10-CV-00035-RH-WCS, filed 2/1/10.
Suits have been filed in Colorado, Texas, Florida, California, Ohio and many other states. There is a chance all the federal class actions will be consolidated. A hearing before a panel of judges is set for March 25 in the U.S. District Court in San Diego.
Toyota Asks for Dismissal. Toyota maintains the sudden acceleration issues were not caused by an electronic defect and the company has sent repair kits to dealers with metal replacement plates for pedals. Toyota has asked one court to dismiss the first of the many class action cases. In Seong Bae Choi v. Toyota Motor Corp., Toyota requested dismissal stating the four plaintiffs suffered no “legally cognizable injuries in connection with the alleged defects.” Toyota also claims dismissal is warranted because property damage from unintended acceleration is not representative of millions of Toyota owners, there were no allegations Toyota failed to honor its warranty or make repairs, and one of the plaintiffs did not even claim she experienced the sudden acceleration.
Attorneys Toyota Action Consortium. About 25 consumer law firms in over 20 states have joined together in the “Attorneys Toyota Action Consortium” to file lawsuits against Toyota. Dr. Tim Howard, a law professor at Northwestern, is coordinating the effort. Howard also coordinated a tobacco lawsuit in Florida that led to a $20 billion settlement with the state of Florida and a $250 billion national settlement. Howard has stated: “This is the strongest and largest case for economic damages to American consumers we’ve ever had. … Major used-car valuation services like Edmonds, NADA, and Kelley Blue Book have already downgraded resale value by as much as 3.5%, and consumers can expect an additional decrease up to 6%. As a result, Toyota owners have been robbed of their investment, along with their ability to trade in these vehicles rather than submit to hasty and questionable repairs. In the meantime, they have also lost the use of their car. That’s economic damage, plain and simple.”
On Feb. 22, Toyota announced it had received a federal grand jury subpoena investigating the sudden acceleration problem in vehicles. It has been estimated the lawsuits could cost Toyota over $2 billion.
Valerie Paula is an Associate in the Regulatory Affairs Department at Dorsey & Whitney, LLC. Please see our web site at www.dorsey.com.