Toyota to Settle Acceleration Suits after Oklahoma Verdict
Toyota is in final negotiations with the Justice Department to settle an investigation of the way it disclosed complaints about defective accelerators, according to a recent report in the New York Times. In 2009 and 2010, Toyota recalled millions of vehicles over concerns about unexpected acceleration.
Toyota officials and representatives from the U.S. Attorney’s Office in New York’s Southern District are resolving the federal criminal case, the newspaper reported. The Securities and Exchange Commission is also involved and maintains that Toyota did not fully report the financial impact of the recalls.
The recalls were primarily related to faulty electronic-throttle systems and floor mats, which could cause Toyotas to speed up uncontrollably. In the past four years, the company has settled a number of cases involving customers who were injured, killed, or suffered economic losses as a consequence of the problem.
Toyota suffered a serious blow to its reputation for making reliable and safe automobiles and now faces increased competition from domestic automakers, Korean brands, and other Japanese manufacturers. Despite the bad press, endless legal battles, and criminal probe, the New York Times reported in early February that Toyota is likely to post record earnings in 2014.
The Wall Street Journal reported that Toyota might pay about $1 billion to settle the federal case. Although this sum may put the federal matters to rest, Toyota also has to contend with a flood of lawsuits around the country alleging wrongful deaths, property damage, personal injury, and other claims related to faulty acceleration.
Late in 2013, the company announced its intention to settle lawsuits related to faulty vehicles as quickly and painlessly as possible. This announcement was prompted by Toyota’s loss of a key liability court case in Oklahoma.
In October 2013, an Oklahoma jury found Toyota liable for a fatal traffic crash in 2007 that was caused by unintended acceleration of a Toyota Camry. The accident happened when a woman’s 2005 Camry accelerated unexpectedly, ran through an intersection, and crashed into an embankment. The crash injured the driver and killed a 70 year-old passenger.
The jury awarded $3 million in monetary damages, and Toyota settled the following day for an undisclosed sum before the jury began deliberating punitive damages.
Although it appears that Toyota is no longer making cars that have the potential for unintended acceleration, more issues are on the horizon for the company. On February 12, CNN reported that Toyota is recalling 2.1 million vehicles for a software problem that may cause cars to stop abruptly. Affected models include the 2010-2014 Prius, RAV4, and Lexus vehicles.
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