Historic $1.3 Billion Settlement in Toyota Sudden Acceleration Lawsuit

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The parties have announced a settlement in the Toyota sudden acceleration multi-district litigation pending in a Santa Ana federal court. Under the terms of the settlement, which must now receive judicial approval, Toyota will install a brake-override system in some 3.25 million vehicles in addition to paying cash compensation, which will be measured by the diminution in the value of the cars that were the subject of the lawsuit. As many as 16 million current and former Toyota owners are eligible to participate in the settlement. The proposed settlement agreement is available here.

The agreement reached in the sudden acceleration litigation is estimated to be worth $1.3 billion. While exceeded in size by the $2 billion payout in In re American International Group (No. 10–4401, 2d Cir.), the Toyota settlement is still one of the year’s largest, and may be the largest automobile-related settlement of all time.

This settlement is also notable due to the involvement of a relatively rare public/private partnership. One of the cases within the multi-district litigation was brought by the Orange County District Attorney, which contracted with the Robinson Calcagnie Robinson firm to augment the limited public resources devoted to the case. While some were critical of the arrangement, both the substantial result for consumers and the relatively swift resolution of the litigation should weigh in favor of California’s District Attorneys and City Attorneys exercising their authority to contract with private firms.