Settlement Process Speeds Along in Toyota Unintended Acceleration Litigation

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In a Joint Status Report filed on March 17, 2015, with Judge James V. Selna in the Central District of California, the parties informed the court that settlement deals continue to be made at a steady pace in In Re: Toyota Motor Corp. Unintended Acceleration Marketing, Sales Practices, and Products Liability Litigation (“In Re: Toyota”). In Re: Toyota, No. 10-2151, Dkt. No. 4932 (C.D. Cal. March 16, 2015) (Joint Status Report, available here).

This multidistrict litigation (“MDL”) is made up of hundreds of individual suits alleging negligence and product liability based on a defect in some Toyota models which caused the vehicles to accelerate suddenly, leading to numerous accidents. Plaintiffs are seeking compensatory and punitive damages for injuries and/or deaths caused by the unintended acceleration. So far, a total of 289 cases have either settled or reached an agreement to settle in principle, including: 132 of 171 cases consolidated in the MDL; 45 of 84 cases consolidated in the Judicial Council Coordinated Proceeding (“JCCP”); and 112 individual cases litigated outside of the consolidated proceedings.

In the Joint Status Report, the parties attribute the efficacy of the litigation to the Intensive Settlement Process (“ISP”), which was confirmed and adopted on January 14, 2014, stating that the “ISP is continuing to make good progress.” Report at 2. Case in point, of the 39 unintended acceleration lawsuits still pending in the MDL, all but four have requested ISP, and of the 39 cases remaining in the JCCP, all but two have requested it.

These settlements come more than five years after Toyota began recalling millions of vehicles for the unintended acceleration defect and more than thirteen months after counsel for Toyota contacted the 300+ plaintiffs’ attorneys to inform them of the proposed settlement process. Since each case is being negotiated separately, the total value of the settlement will not be clear until all of the cases are resolved. In a related class action settlement that won final approval before Judge Selna in July of 2013, Toyota agreed to pay an estimated $1.1 billion to settle a claim that the unintended acceleration defect diminished the value of the class vehicles. The settlement also provided for $200 million in plaintiffs’ attorney fees and up to $27 million in expenses.

In addition to over a billion dollars in legal settlements so far, Toyota was also hit with a $1.2 billion criminal penalty by the United States Department of Justice in March of 2014. U.S. Attorney General Eric Holder described Toyota’s actions as “shameful” and a “blatant disregard” for the law. He went on to warn that “other car companies should not repeat Toyota’s mistake.” U.S. Attorney General Eric Holder, Press Conference at the Department of Justice (March 19, 2014).

Thus, while Toyota may be nearing the end of its civil litigation involving the unintended acceleration defect, the automotive and legal industries will feel its effects for years to come.

Authored by: 
Lucas Rogers, Associate