Product Liability

Toyota pays record fine; is GM next?

toyota cars 435x308 Toyota pays record fine; is GM next?According to the U.S. Department of Justice announcement this Wednesday, Toyota will be forced to pay $1.2 billion in fines due to its mishandling of the sudden unintended acceleration defects that plagued millions of its own vehicles.

Toyota’s cover-up of the sudden acceleration defects has resulted in the highest settlement to be paid by an auto manufacturer in U.S. history. The Justice Department has found that Toyota intentionally misled federal investigators and the public by concealing important evidence and refusing to address its vehicles’ problems with honesty.

Between 2009 and 2010, nearly 9.4 million Toyota and Lexus vehicles were ultimately recalled by the Japanese automaker to repair defects that gave vehicles the potential to speed out of control without warning; however, Toyota claimed the issue was because of sticking accelerator pedals and floor mat entrapment.

“Those incidents produced one of the largest consumer recalls in the history of the automotive industry,” the U.S. Justice Department said in a recent statement. “Today, we can say for certain that Toyota intentionally concealed information and misled the public about the safety issues behind these recalls.

“Put simply, Toyota’s conduct was shameful. It showed a blatant disregard for systems and laws designed to look after the safety of consumers,” the Justice Department statement reads. “By the company’s own admission, it protected its brand ahead of its own customers. This constitutes a clear and reprehensible abuse of the public trust.”

Now that the settlement has been made public, Toyota has complied with the agreement by admitting to its wrongdoing and issuing an apology. A statement on its website claims that the automaker has rededicated itself and is currently implementing “fundamental changes” in order to put the customers first.

“If they paid $1.2 billion for that, they owe the government a whole lot more for the rest of it,” said Jere Beasley, founding shareholder of Montgomery, Ala.’s Beasley, Allen, Crow, Methvin, Portis & Miles. Beasley Allen Law Firm was able to obtain a $3 million verdict against Toyota after an Oklahoma jury found that the electronic throttle defects were responsible for a 2007 crash killed one woman and left another seriously injured. The jury graciously awarded the families of both women $1.5 million, ending Toyota’s three consecutive wins for the sudden-acceleration lawsuits.

“The Bookout and Schwarz families had the fortitude to take on the corporate giants when the deck was stacked against them. We were able to help them prove that Toyota knew about the electronic throttle defect,” Mr. Beasley said.

He added that the Oklahoma verdict is important because it “turned things around for both Toyota’s victims and the federal government.”

“We proved that Toyota had failed to report over 60,000 complaints of SUA incidents in one year (2003) and had a 400 percent increase in the incidents in 2004 and continued to hide from NHTSA the real problem – electronics in the throttle system – for years. We also proved that the President of Toyota USA had intentionally lied to Congress,” Mr. Beasley continued.

Another auto giant, General Motors, is also under fire for similar allegations of withholding important information regarding fatal ignition switch defects. A recall failed to be issued by GM regarding the ignition switch for a decade or longer, leading to numerous personal injury and wrongful death lawsuits. Like Toyota, GM now faces both civil and criminal fines for its thoughtless actions.

During the recent news conference revealing the Toyota settlement, U.S. Attorney General Eric Holder may have given GM a stern warning: “Other car companies should not repeat Toyota’s mistake; a recall may damage a company’s reputation, but deceiving your customers makes that damage far more lasting.”

Beasley Allen
National Law Journal