| DETROIT/NEW YORK
DETROIT/NEW YORK Dec 27 Toyota Motor Corp
eliminated a huge obstacle with a U.S. settlement over
unintended acceleration in its cars and trucks, leaving it to
fight smaller cases that will be harder for plaintiffs to prove
and less likely to damage the company's growing sales.
While the Japanese automaker still faces possibly hundreds
of personal injury lawsuits related to claims that its vehicles
accelerated unintentionally, Wednesday's $1.1 billion settlement
announcement will remove the last big roadblock to putting the
issue behind it.
Sean Kane, president of Safety Research & Strategies and an
outspoken critic of Toyota who has assisted plaintiffs'
attorneys against the automaker, said the settlement covered the
biggest financial hit for Toyota.
"Those are not billion-dollar cases," he said of the pending
personal-injury lawsuits. "Those are at best million-dollar
cases or multimillion-dollar cases. With a company like Toyota,
that's not even something that's a blip on their radar."
At the time, the recall around the unintended acceleration
issue and resulting lawsuits were a surprise for a company long
associated with quality and reliability, and the resulting
fallout led President Akio Toyoda to apologize publicly.
Lee Kaplan, a product liability lawyer in Houston, said
plaintiffs in the injury and death cases also will have an
uphill battle in court because they will need to prove
deficiencies in Toyota's equipment.
"I have never seen anyone identify the single cause of the
problem," he said. "Without identifying a true scientific or
technical basis, pinning a verdict on Toyota will be hard."
Toyota said it agreed to spend $1.1 billion to settle
sweeping U.S. class-action litigation over claims millions of
its vehicles accelerated unintentionally. The
recall fallout related to the issue was a $2 billion hit to
earnings in the company's 2010 fiscal year.
Judge James Selna is expected to review the settlement on
Friday in U.S. District Court in Santa Ana, California. However,
final approval and disbursement of the money may not occur for
The proposed settlement will compensate customers for
economic losses related to possible safety defects in Toyota
vehicles, covering most of the litigation involving unintended
About 16 million Toyota, Lexus and Scion vehicles sold in
the United States spanning the model years 1998 to 2010 are
covered by the settlement. Company officials have maintained the
electronic throttle control system was not at fault, blaming
ill-fitting floor mats and sticky gas pedals. A study by federal
safety officials at the National Highway Traffic Safety
Administration and NASA found no link between reports of
unintended acceleration and Toyota's electronic throttle control
Toyota, the No. 3 automaker in the U.S. market, admitted no
fault in proposing the settlement, one of the largest U.S. mass
class-action litigations in the automotive sector. One
plaintiff's law firm called it the largest settlement in U.S.
history involving auto defects.
However, the deal does not cover wrongful death or injury
lawsuits, which according to a June Toyota filing totaled more
Those cases will be handled by Toyota one by one, with the
first slated to go to trial in February 2013 in Judge Selna's
California court, involving a Utah crash that killed two people.
However, one wrongful death case in Houston was dropped last
year due to lack of evidence and the largest such lawsuit, over
the death of the family of off-duty California Highway Patrol
officer Mark Saylor, was settled out of court for $10 million in
Toyota's recall of its vehicles between 2009 and 2011
relating to the unintended acceleration issue hurt its
reputation for reliability and safety.
But the automaker's sales were up almost 29 percent in 2012
through November, compared with a 14-percent increase in the
industry, and Toyota's share of the U.S. market has risen to
14.4 percent from 12.7 percent in 2011. Last year's Toyota sales
were depressed by the March earthquake and tsunami in Japan.
The full effect of the acceleration issue on Toyota's U.S.
sales may not be known for years, until the current owners
affected by it need to buy another vehicle.
Yet with its U.S. sales rising at double the industry's rate
and the company expected to reclaim the global sales crown this
year, analysts said Toyota has seemingly shaken off any
lingering damage to its reputation.
"Toyota is the Teflon company," Edmunds.com analyst
Michelle Krebs said. "They always bounce back.
"The consumer doesn't seem to care," she added. "The
consumer keeps on buying Toyotas."