The 10 Biggest Toyota Lawsuits in Company History
The Toyota Company has been in operation since 1937, and it has approximately 350,000 employees. The company headquarters are in Toyota City, Japan. The total assets of the Toyota corporation are about $562 billion. In different countries, it operates through subsidiaries, mainly the Toyota Motor Sales of U.S.A, Toyota Canada, and the Toyota Motor Credit Corporation. The annual income of the Toyota company was recorded to be $25.4 billion, which was a 20.19% increase from the net income of 20121. Over the years, the company has faced several lawsuits. Here are the ten most significant lawsuits in the history of Toyota.
10. Mark Saylor & Others Versus Toyota ($10 million)
in March 2014, Toyota agreed to pay $10 million to settle one of its most serious cases against it. The plaintiff, together with relatives of three people, sued Toyota after their kids were involved in a deadly accident in August 2009. They all alleged that defects in the Lexus ES model caused the accident. The accident sparked one of the most extraordinary congressional investigations of the company, and legal experts said that it could form the basis on which the company would face future lawsuits. Notably, the settlement was only between the company and the plaintiffs and had a non-disclosure clause. However, some parts of the media became aware and released it to the public.
After the media revelations, Toyota released a statement that it paid the money out of compassion but not as a sign of admitting guilt. Heiskell and other lawyers presented the plaintiffs. In making the lawsuit’s ruling, the presiding judge, Antony J. Mohr, stated that the settlement would not be cited in subsequent lawsuits against the company and of the exact nature, and he granted 48 hours for appeal, which Toyota chose not to make use of.
9. Orange County District Attorney Versus Toyota Corporation, An Unintended Acceleration Case ($16 million)
One of the leading roles of the District Attorney is to protect the public from exploitation by several business entities. The office of the Orange County District 2013 reported that it had reached an agreement with the company to settle a lawsuit in which it had sued the latter for concealing safety issues that were related to the unintended acceleration f some of its vehicles. The County Attorney said the money would be used for anti-gang programs in different social institutions.
8. National Highway Traffic Safety Administration Versus Toyota, Untimely Recalls of Cars with Pedal Defects ($17.4 million)
In 2012, the NHTSA’s Office Investigation section started noticing possible incidents of floor mat pedal entrapment in the Lexus RX 350s model, and they raised the matter with Toyota. The authority went to court, claiming it had demonstrated that it was aware of the same problem even before highlighting it to them. After back-and-forth communications between the two parties.
Toyota agreed to recall 154,036 2010 Lexus RX 350 and 2010 RX 450h and repair the pedal problem. Without admitting liability, the company agreed to pay a punitive fee of $17.4 million because it had failed to act at the right time. The agreement also required Toyota to restructure its quality assurance mechanism and work on improving safety-related defects. In addition, Toyota agreed to revise its vehicle quality analytics to improve its performance.
7. The Consumer Financial Protection Bureau (CFPB) & DOJ Versus Toyota Motor Credit Corporation, A Class Discrimination Lawsuit ($21 million)
In 2016 the plaintiffs resolved a lawsuit in which the Toyota Motor Credit Corporation was accused of having compensation and pricing tactics that were discriminating against some groups. The suit alleged that their whiter counterparts paid less for the same vehicles, and those who borrowed from it would pay higher loan interests. The Department of Justice investigation revealed that the respondent discriminated against African-Americans, Pacific Islanders, and Asians. The Top-Class Lawsuits reported that the investigations also revealed that loaners from these groups would pay an average of $150 more compared to their white friends.
The respondent was also required to repeal its pricing and compensation policies and inform the plaintiffs of the progress of the changes. Those eligible for the settlement were those who bought a vehicle financed by the corporation between 2011 and 2016 from the races mentioned above and must have been among those identified by the government. The settlement gave August 5, 2018, the last day people would file compensation claims.
6. Alabama &Others Versus Toyota, A Multistate Lawsuit on United Acceleration ($29 million)
Attorney Generals of 29 U.S States went to court accusing Toyota’s Camrys, Priuses, and Corollas of having unintended acceleration. The states included Alabama, Arizona, Colorado, Florida, and others; as indicated in the Courthouse 2013, the states’ attorneys announced that they had agreed to settle the matter with the company at a tune of $29 million. When the States first came up with the complaint, the company tried to blame it on floor mats, but investigators easily challenged them by proving that there were other car defects.
Before the settlement, Toyota had stated to recall some of the affected vehicles and is committed to restitute additional customers who had the same problem, and they could prove that they had incurred costs in repairing their cars. The settlement also prohibited Toyota from selling cars with such defects. If they would, they were required to inform their customer of the purported defect and show a commitment that they would repair it.
5. Martin &Others Versus Toyota Motor Credit Corporation, Guaranteed Asset Protection Fund (GAP) Case ($59 million)
Toyota Motor Vehicle Credit Corporation, TMCC, is a subsidiary of the Toyota company, which provides customers with Guaranteed Asset Protection covers and is entitled to some refunds after some time. The plaintiff went to court seeking that the subsidiary be compelled to refund their man, and during the trial, both parties agreed on a deal valued at $59 million. In the settlement, two classes were established. First, the statutory class had customers from Alabama, Oregon, Iowa, Massachusetts, New Jersey, Colorado, Indiana, Texas, Wisconsin, and Wyoming.
For one to meet the criteria of being in the statutory class, they had to prove that they had such signed contracts with the respondents, they had paid off the required finances until the maturity day, and did not receive any GAP refund or suffer a vehicle loss during the period of the agreement. The second class was non-statutory customers hailing from the same areas, meeting the same criteria only because they did not have vehicles covered by the agreement. The agreement set September 26, 2022, as the last day for persons to place complaints.
4. DOJ & EPA Versus Toyota (Failure to Adhere to the Clean Act Reporting Requirements ($180 million)
On January 14, 2021, the Department of Justice released a report saying that, together with the Environmental Protection Agency (EPA), they had secured a settlement of $180 million to settle a decade long lawsuit. Under the Clean Air Act, corporations are expected to report potential environmental pollution caused by their products. According to the two bodies, the Toyota company and its subsidiaries had engaged in activities that led to air pollution and failed to report them. The complaint was filed in Manhattan court, which alleged that the company violated the Act between 2005 and 2015.
According to them, the problem was systematic and deliberate. The plaintiffs’ position was that Toyota did so by late filling of 78 EDIRs, the records demonstrating compliance to the concerned laws, and investigators unearthed that some of them were delayed for more than eight years. This is among the few cases where Toyota admitted, accepted, and acknowledged liability. In its arguments, the EPA tabled evidence that it had started engaging Toyota over the same complaints in 2002.
3. The National Highway Traffic Safety Administration (NHTSA) Versus Toyota, The Takata Airbag Products Liability Litigation, ($275 million)
The NPR reported that four companies that had been sued in the infamous Takata airbag inflators case had agreed that they would pay $553 million and Toyota was to pay $275 million of the total money. For long before the lawsuit, the Takata airbags were reported to rupture, subsequently sending debris into the vehicle. In addition, the NHTSA said that they were dangerous to passengers for they contained the reactive and explosive ammonium nitrate without adding a chemical drying agent. In the lawsuit, Toyota is alongside Mazda, Subaru, and BMW, all of whom acknowledge using dangerous airbags.
The companies recall the affect vehicle and repair the airbags. The money is to compensate those whose vehicles are recalled. However, at the time of repair, they rent other vehicles. The matter was filed in the Southern District of Florida and settled on November 1, 2017.
2. Department of Justice (DOJ) Versus Toyota, Admission of Misleading Customers ($1.2 billion)
2014 was not one of the best years for Toyota as far as lawsuits are concerned. According to CNN, The Japanese automobile agreed to pay $1.2 billion to the Department of Justice after the company admitted to misleading the government and customers on unintended acceleration. The lawsuits started when several customers complained about unwanted acceleration, and instead of the company finding a permanent solution, it just came up with means to control it.
Internal reports alleged that the company was so proud of saving up to $100 million. It undertook the little measures to handle the problem that made it avoid the recall of affected vehicles. Welcoming the ruling, officials of the DOJ said that that case marked how they would deal with insincere automobile companies. The settlement is the greatest of a vehicle company in the history of the United States. On the same grounds, Mark Saylor & Others Versus Toyota ($10 million) succeeded.
1. Brian Warner and Others Versus Toyota Motor Sales, U.S, Trucks with Frames Prone to Corrosion ($3.4 billion)
Most of the cases Toyota has ever faced are related to safety-related offenses. According to the Violation Tracker, the company agreed to pay $3.4 billion on May 21, 2017, to settle a class lawsuit in which the company had been accused of producing tracks whose frames were easily prone to common agents of corrosion and perforation. The matter is at the Central District Court of California. Court documents showed that the settlement covers 1.5 million trucks and SUVs.
In specific, the trucks that were under consideration were the Tacoma (from 2005 to 2010). Additionally, the Sequoias (from 2005 to 2008), and Tundra (from 2007 to 2008). When calculating the settlement, officers estimated the cost of repairing each affected vehicle to be $15,000. In addition, the settlement demanded that Toyota inspect any other vehicle to determine whether they still qualified. The legal system places the burden of quality manufacturing upon them.
An Analysis of Cases Against Toyota
Unlike many companies, Toyota appears not to have serious lawsuits with its employees. United acceleration, safety offenses, and failure to comply with safety requirements take a considerable chunk of cases against the company. However, the Department of Justice, State Attorneys, and government agencies have contributed.
In Conclusion
Toyota appears to be one of those companies which have mastered the art of out-of-court settlements. All the cases discussed win through settlements, and the company is good for that. However, cases of concealing safety information have far-reaching implications, and the company must minimize them. In addition, it must be aware that the more it settles these lawsuits. The more it creates room for other malicious litigants to use the same grounds to win financial awards from it.
