Toyota Must Face Claims Over Unintended Acceleration, Judge in U.S. Rules
Toyota Motor Corp. (7203) lost a bid to dismiss lawsuits by car owners alleging economic loss related to unintended acceleration when a federal judge overseeing the suits made final an order allowing the claims to go forward.
The Toyota owners contend the company drove down the value of their vehicles by failing to disclose or fix defects related to sudden acceleration. U.S. District Judge James V. Selna in Santa Ana, California, issued a final order May 13 following last month’s tentative order allowing the lawsuits to move ahead because the vehicle owners had properly pleaded loss or injury.
“Taking these allegations as true, as the court must at the pleading stage, they establish an economic loss,” Selna wrote, using language identical to his tentative ruling. “A vehicle with a defect is worth less than one without a defect.”
Toyota, the world’s largest automaker, recalled millions of U.S. vehicles, starting in 2009, after claims of defects and incidents involving sudden unintended acceleration. The recalls set off a wave of litigation, including hundreds of economic loss suits and claims by individuals or their families alleging injuries and deaths.
Most of the federal lawsuits were combined before Selna, who is overseeing pretrial evidence-gathering.
Selna issued a similar ruling in November that rejected Toyota’s motion to dismiss an earlier complaint by the vehicle owners.
‘Toyota Is Confident’
“At this early stage of the litigation the court is required to accept as true all of the factual allegations made by plaintiffs’ counsel in ruling on Toyota’s motion to dismiss,” Celeste Migliore, Toyota spokeswoman said in an e- mail. “The burden is now squarely on plaintiffs’ counsel to prove their allegations and Toyota is confident that no such proof exists.”
“We believe -- and intend to prove -- that Toyota was aware of a defect and chose not to take action to protect consumers,” attorney Steve Berman, who represents vehicle owners, said in an e-mailed statement today.
“Judge Selna agreed with many of our underlying arguments in the case, including our contention that Toyota owners who did not attempt to sell their vehicle could still bring a claim because they overpaid for their vehicles, buying cars that were not worth as much as a car free of these defects,” Berman said.
California Law
Selna is conducting a hearing today on a request by lawyers for vehicle owners to pursue economic claims under California law, which gives plaintiffs a better chance than most states of recovering damages. Toyota has asked the judge to find that car owners can’t use California law on suits brought in other states.
Selna said last week that he was likely to rule in the vehicle owners’ favor. Selna said he didn’t believe Toyota’s rights to due process would be denied through using California consumer law on the claims.
Toyota’s series of recalls began in September 2009 with an announcement that 3.8 million vehicles were being recalled because of a defect that may cause floor mats to jam down the accelerator pedal. In January 2010, the company recalled 2.3 million vehicles to fix sticking gas pedals.
The carmaker said in February that it was recalling another 2.17 million vehicles in the U.S. for carpet and floor-mat flaws that could jam gas pedals.
Loose Floor Mats
Many of the lawsuits claim that loose floor mats and sticky pedals don’t explain all episodes of sudden acceleration and that the electronic throttle system in Toyota vehicles is to blame. Toyota has disputed any flaws in its electronic throttle control system.
In February, NASA, the U.S. space agency, and the National Highway Traffic Safety Administration said their probe of possible electronic defects found no causes for unintended acceleration other than sticking accelerator pedals and floor mats that jammed the pedals.
The cases are combined as In re Toyota Motor Corp. Unintended Acceleration Marketing, Sales Practices and Products Liability Litigation, 8:10-ml-02151, U.S. District Court, Central District of California (Santa Ana).
To contact the reporters on this story: Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net; Bill Callahan in San Diego at callahan@san.rr.com
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net
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