FILE - In this photo taken June 25, 2011, file photo, Toyota keys sit in a fish bowl at the Toyota of Tampa Bay dealership in Tampa, Fla. A plaintiffs' attorney on Wednesday, Dec. 26, 2012, says Toyota Motor Corp. has reached a settlement in a case involving hundreds of lawsuits over accelerations problems. Steve Berman said Wednesday the settlement, which still needs a federal judge's approval, was worth more than $1 billion and is the largest settlement in U.S. history involving automobile defects. (AP Photo/Chris O'Meara, File)
LOS ANGELES -- Toyota Motor Corp. said Wednesday it has reached a
settlement worth more than $1 billion in a case involving unintended
acceleration problems in its vehicles.
The company said the deal will resolve hundreds of lawsuits from
Toyota owners who said the value of their cars and trucks plummeted
after a series of recalls stemming from claims that Toyota vehicles
accelerated unintentionally.
Steve Berman, a lawyer representing Toyota owners, said the
settlement is the largest in U.S. history involving automobile defects.
"We kept fighting and fighting and we secured what we think was a
good settlement given the risks of this litigation," Berman told The
Associated Press.
The proposed deal was filed Wednesday and must receive the approval
of U.S. District Judge James Selna, who was expected to review the
settlement Friday.
Toyota said it will take a one-time, $1.1 billion pre-tax charge
against earnings to cover the estimated costs of the settlement. Berman
said the total value of the deal is between $1.2 billion and $1.4
billion.
Hundreds of lawsuits have been filed against Toyota since 2009, when
the Japanese automaker started receiving numerous complaints that its
cars accelerated on their own, causing crashes, injuries and even
deaths.
The cases were consolidated in U.S. District Court in Santa Ana and
divided into two categories: economic loss and wrongful death. Claims by
people who seek compensation for injury and death due to sudden
acceleration are not part of the settlement; the first trial involving
those suits is scheduled for February.
As part of the economic loss settlement, Toyota will offer cash
payments from a pool of about $250 million to eligible customers who
sold vehicles or turned in leased vehicles between September 2009 and
December 2010.
The company also will launch a $250 million program for 16 million
current owners to provide supplemental warranty coverage for certain
vehicle components, and it will retrofit about 3.2 million vehicles with
a brake override system. An override system is designed to ensure a car
will stop when the brakes are applied, even if the accelerator pedal is
depressed.
The settlement would also establish additional driver education
programs and fund new research into advanced safety technologies.
"In keeping with our core principles, we have structured this
agreement in ways that work to put our customers first and demonstrate
that they can count on Toyota to stand behind our vehicles," said
Christopher Reynolds, Toyota vice president and general counsel.
Current and former Toyota owners are expected to receive more
information about the settlement in the coming months. Some information
is also available at http://www.ToyotaELsettlement.com , a website
created for Toyota owners affected by the settlement.
"We are extraordinarily proud of how we were able to represent the
interests of Toyota owners, and believe this settlement is both
comprehensive in its scope and fair in compensation," Berman said.
Toyota has recalled more than 14 million vehicles worldwide due to
acceleration problems in several models and brake defects with the Prius
hybrid. The automaker has blamed driver error, faulty floor mats and
stuck accelerator pedals for the problems.
Plaintiffs' attorneys have spent the past two years deposing Toyota
employees, poring over thousands of documents and reviewing software
code, but the company maintains those lawyers have been unable to prove
that a design defect — namely Toyota's electronic throttle control
system — was responsible for vehicles surging unexpectedly.
Both the National Highway Traffic Safety Administration and NASA were
unable to find any defects in Toyota's source code that could cause
problems.
The company has been dogged by fines for not reporting problems in a timely manner.
Earlier this month, NHTSA doled out a record $17.4 million fine to
Toyota for failing to quickly report floor mat problems with some of its
Lexus models. Toyota paid a total of $48.8 million in fines for three
violations in 2010.
Toyota President Akio Toyoda appeared before Congress last year and
pledged to strengthen quality control. Recent sales figures show the
company appears to have rebounded following its safety issues.
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