March 6, 2018 / 7:48 PM / in 13 days

Kobe Steel, Toyota hit with U.S. lawsuit over vehicle metal quality

NEW YORK, March 6 (Reuters) - U.S. consumers have filed a lawsuit against Kobe Steel Ltd and Toyota Motor Corp accusing the companies of violating consumer protection laws and engaging in fraud by concealing the use of sub-standard metal components in vehicles.

The proposed class action lawsuit represents the first U.S. consumer complaint filed against Kobe Steel over an issue that has been dogging Japan’s third-largest steelmaker for nearly five decades.

Kobe, which supplies steel parts to manufacturers of cars, planes and trains around the world, admitted last year to supplying products with falsified specifications to about 500 customers, throwing global supply chains into turmoil.

The lawsuit, filed on Monday in federal court in San Francisco, was brought by two California residents who seek to represent a nationwide class of consumers who bought allegedly defective Toyota vehicles.

According to the complaint, Toyota’s Prius, Camry, Land Cruiser and Lexus vehicles have all been manufactured with “sub-standard” steel, aluminum and copper.

The plaintiffs allege that Toyota and Kobe Steel both violated federal and state consumer protection laws by claiming that the vehicles complied with U.S. quality standards.

Kobe Steel could not immediately be reached for comment. Toyota did not immediately respond to a request for comment.

In a special order in November, the U.S. National Highway Traffic Safety Administration asked 29 automakers, including Toyota, to disclose the safety of any of their vehicles or engines containing products supplied by Kobe Steel.

The regulator did not immediately respond to a request for comment on what data it had received in response and whether there was any evidence of faulty materials in Toyota cars.

Monday’s 40-page lawsuit outlines the ways in which the companies allegedly concealed poor metal quality. It demands compensatory and punitive damages in an unspecified amount.

According to the complaint, at least six Toyota car models sold or leased to U.S. consumers were manufactured with sub-standard metal from Kobe Steel. Plaintiffs said the metal could impact vehicle safety and performance.

Toyota had the duty to disclose any defective vehicle components because it has consistently marketed its automobiles as safe, functional and reliable, the lawsuit says.

Kobe and Toyota had superior knowledge and access to the facts, the lawsuit alleged, giving rise to fraud by concealment claims.

Kobe is also undergoing a separate U.S. Justice Department probe. (Reporting by Tina Bellon in New York Additional reporting by David Shepardson in Washington; Editing by Tom Brown)

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