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Settlement reached in Toyota acceleration cases

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AP PHOTO/SHIZUO KAMBAYASHI

LOS ANGELES — Toyota Motor Corp. says it has reached a settlement worth more than $1 billion in a case involving unintended acceleration problems in its vehicles.

The company said Wednesday 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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Tags: Business , lawsuits , Motoring , settlement , Toyota

  • upupperclassman

    Toyota until now claims that there is nothing wrong with the vehicles yet agrees to pay $ 1 Billion settlement. How do you understand this kind of talking and action? People should stop buying Toyota!

  • dxdaistar

    How about complaints in the Philippines.The customers are not paid, only the lawyers or courts, maybe? Consumer protection has to be improved in the Philippines.



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