By: Staff Writers | Published: March 10th, 2010
The Japanese automaker currently faces at least 89 Toyota class action lawsuits sparked by recalls involving problems with Toyota gas pedals and brakes. An analysis done by the Associated Press estimates that the company’s legal bills on those cases alone could top $3 billion, and that does not include the costs of a number of individual Toyota accident personal injury lawsuits, product liability lawsuits and wrongful death lawsuits that have also been filed against the company.
Toyota has recalled about 9 million Toyota and Lexus vehicles since September 2009. About 8.5 million of those vehicles were recalled due to problems with sudden acceleration, which the National Highway Transportation Safety Administration (NHTSA) says have been involved in as many as 52 deaths. More than 400,000 additional Toyota Prius and Lexus HS250h vehicles have also been recalled due to brake problems.
The Toyota class action suits, which could represent as many as six million different Toyota owners, allege that the company misrepresented the value of its vehicles by concealing the accelerator problem from consumers and investors. The lawsuits say that, as a result, the resale value of their Toyota and Lexus vehicles has plummeted. Toyota resale values are often used as a selling point of the company’s vehicles. If the company has to pay Toyota owners even as little as $500, the cost could quickly balloon in to the billions.
Later this month, the U.S. Judicial Panel on Multidistrict Litigation will decide whether to consolidate all federal lawsuits against Toyota into a multidistrict litigation (MDL), where the cases will be centralized in one federal court for pretrial litigation.
Last month Toyota became the target of probes by both federal prosecutors and the Securities and Exchange Commission (SEC). Both federal investigators and the SEC are looking into how the company reacted to complaints about Toyota accelerator problems, and are questioning whether the company attempted to cover up or downplay the seriousness and number of incidents being reported.
The company’s woes over the gas pedal problems may not end there. Many critics have said that the Toyota acceleration problem is due to an electronics flaw, which the company has denied. It has developed fixes for the problems that included replacing floor mats and installing devices to prevent the pedal from getting physically stuck due to friction. However, the NHTSA says it has received at least 60 reports from Toyota owners who received the fixes, but are still suffering from sudden acceleration problems.