Global Biz
Class-action lawsuits could cost Toyota $3B-plus
(Agencies)
Updated: 2010-03-10 02:59
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MIAMI (AP) - Toyota owners claiming that massive safety recalls are causing the value of their vehicles to plummet have filed at least 89 class-action lawsuits that could cost the Japanese auto giant $3 billion or more, according to an Associated Press review of cases, legal precedent and interviews with experts.
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 In this Feb. 7, 2010 photo, the tailends of unsold 2010 Toyota Prius sedans form a long line at a Toyota dealership in Lakewood, Colo. [Agencies] |
Such class-action lawsuits "are more scary for Toyota than the cases where people actually got injured," said Tom Baker, a University of Pennsylvania law professor. "A super-big injury case would be $20 million. But you could have millions of individual car owners who could (each) be owed $1,000. If I were Toyota, I'd be more worried about those cases."
As Toyota continues to deal with the recalls and wavering public confidence in its vehicle safety, its biggest financial fight may be in the courtroom. A key decision could come at a March 25 hearing in San Diego, where a panel of federal judges will consider whether to consolidate the mushrooming cases into a single jurisdiction.
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Toyota owners suing the company contend their vehicles have dropped in value because of the recalls and that Toyota knew all along about safety problems but concealed them from buyers. They point to evidence such as Kelley Blue Book's decision this month to lower the resale value of recalled Toyotas an average of 3.5 percent, ranging from $300 less for a Corolla to $750 less for a Sequoia.
The lawsuits started appearing on state and federal dockets last fall, when Toyota began recalling some 8 million vehicles worldwide because of persistent complaints about sudden unintended acceleration. The National Highway Traffic Safety Administration reports that 52 people have died in accelerator-related crashes.
The AP conducted an extensive review of federal court filings and uncovered a total of 89 class-action lawsuits filed nationwide as of Monday. Toyota attorneys said last week in a court filing that the company is aware of 82 such cases.
One leading attorney in the class-action effort, Northeastern University law professor Tim Howard, said the number of owners claiming economic damages because of the recalls could reach 6 million. If each were awarded $500 - likely a conservative estimate - Toyota would have to fork over $3 billion in economic loss damages alone.
This does not include possible payouts in wrongful death or injury cases as well as lawsuits filed by shareholders claiming losses from share prices that have tumbled more than 16 percent since January.
