Settlement Receives Preliminary Approval in Unintended Acceleration Suit

Preliminary approval has been given to Toyota Motor Corp’s $1.1 billion settlement of a class-action lawsuit brought forward by customers who claimed to have lost value on their cars due to the issues of unintended acceleration. U.S. District Judge James Selna of Santa Ana, California, who gave the approval, also announced a hearing for final approval of the deal in June, writing that “Settlement will likely serve the interests of the class members better than litigation.”

The settlement will provide $500 million in cash for plaintiffs, along with installations of break override systems and a customer support program valued at a combined total of $600 million. More than 16 million Toyota, Lexus, and Scion vehicles will be covered, from the 1998 to 2010 model years. The plaintiff lawyer on the case, Steve Berman, said that he was pleased with the results, and the favorable comments from the district judge. Julie Hamp, a spokeswoman for Toyota, said that the company was gratified with the approval of the settlement, “which will provide value to our customers and provides an extra measure of confidence in their vehicles.”

Not included in the settlement are wrongful death and injury lawsuits, of which there are as many as 300, according to a filing from Toyota in June. Those plaintiffs and their personal injury lawyers will therefore need to seek continued legal action if they are to receive compensation for the damages that they have sustained in accidents caused by unintended acceleration.

Toyota has admitted no fault in proposing the settlement however, which will total as one of the largest in US history involving automotive defects. The maker has long maintained that the issues causing unintended acceleration had nothing to do with their electronic throttle control system, widely regarded as the main problem, and that poorly fitting floor mats and sticky gas pedals were to blame, which have long since been fixed. A study performed by the National Highway Traffic Safety Administration confirms Toyota’s claims, citing no link between the throttle control system and instances of unintended acceleration.

Nevertheless, Toyota is hopeful that the approval of the settlement can bring about an end to their saga, which has seen extensive press coverage and multiple vehicle recalls spanning from 2009 through 2011. In his decision, Judge Selna said that the settlement was a fair conclusion, avoiding overly complicated legal fights and litigation that could drag on for years. “Some of these rulings have been favorable to plaintiffs; some have been favorable to Toyota," says Selna. "Were the parties to proceed to a fully litigated result, virtually any outcome would face the risk of uncertainty upon appellate review of these rulings."

And yet despite the continued hits to Toyota’s reputation for reliability and safety, the company has seen tremendous sales gains through 2012. As of November, the auto maker is boasting an increase in sales of almost 29%, significantly larger than the industry wide gains of 14%. Their share of the US market has also grown to 14.4%, up from just 12.7% in 2011. Despite continued recalls and residual sudden acceleration worries, buyers continue to purchase new models, perhaps suggesting that even in their missteps and setbacks, Toyota’s model offerings are still well beyond their competitors.