Toyota Motor Corp (7203.T) has agreed to a settlement of up to $3.4 billion for a federal class action brought by U.S. owners of pickup trucks and SUVs whose frames could rust through, plaintiffs lawyers have said in court papers.
The proposed settlement covers about 1.5 million Tacoma compact pickups, Tundra full-size pickups and Sequoia SUVs alleged to have received inadequate rust protection that could lead to corrosion serious enough to jeopardize their structural integrity, according to court papers.
Attorneys for the plaintiffs in court papers supporting the settlement estimated the value of frame replacements at about $3.375 billion based on a cost of about $15,000 per vehicle and the inspections at about $90 million at $60 per vehicle.
Toyota admitted no liability or wrongdoing in the proposed settlement filed on Wednesday before U.S. District Judge Fernando Olguin in Los Angeles.
"We want our customers to have a great ownership experience, so we are pleased to resolve this litigation in a way that benefits them and demonstrates that we stand behind the quality and reliability of our vehicles," Toyota said in a statement.
Under the settlement terms, Toyota will inspect the vehicles for 12 years from the day they were first sold or leased to determine whether frames need to be replaced at company expense and reimburse owners who previously paid for frame replacement.
The settlement reached on Oct. 31 covers Tacoma trucks from the model years 2005 through 2010, Sequoias from 2005 through 2008 and Tundras from the 2007 and 2008 model years.
Toyota also agreed to pay $9.75 million in attorneys' fees, $150,000 in costs and expenses, and $2,500 each to the named eight class representatives as well as the cost of advertising the settlement.
(Reporting by David Bailey in Minneapolis; Editing by Bernard Orr)