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Toyota settles complaints with states Attorneys General for $29 million

John Neff — Thu, 14 Feb 2013 17:43:00 EST

Toyota announced today that it has reached a settlement with the Attorneys General of 29 states and one US territory that will resolve their complaints relating to recalls performed by the automaker from 2005-2010, including those related to sticky accelerators and malfunctioning floor mats that may have contributed to cases of unintended acceleration.

The settlement includes a payout of $29 million to be divided among the states and US territory, as well as a commitment from Toyota "to take steps to make vehicle information more easily accessible to consumers to help them operate their vehicles safely and make more informed choices." The settlement also has Toyota continuing its rapid-response service teams and quality field offices that were put in place shortly after the largest of the recalls from 2010, as well as a "range of customer care amenities for owners of vehicles subject to certain recalls," though the press release below isn't specific about what those amenities might be.

This settlement marks the second major step in the last few months that Toyota has taken to settle legal disputes surrounding the unintended acceleration recalls, the first being a $1.4 billion settlement to address economic loss suffered by owners of current and past Toyota vehicles that may have lost value on account of these recalls.

Continue reading Toyota settles complaints with states Attorneys General for $29 million

Toyota settles complaints with states Attorneys General for $29 million originally appeared on Autoblog on Thu, 14 Feb 2013 17:43:00 EST. Please see our terms for use of feeds.

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Why everyone loses but the lawyers in Toyota's unintended acceleration settlement

Jonathon Ramsey — Mon, 31 Dec 2012 17:29:00 EST

Filed under: Government/Legal, Safety, Toyota, Earnings/Financials

The Toyota settlement recently submitted to US District Judge James Selna for approval will cost the company anywhere from $1 billion to $1.4 billion. All to settle the class-action suit brought against it for economic losses stemming from claims of unintended acceleration. This suit only addresses the perceived loss-of-value that Toyota owners and lessees feel they have suffered, alleging their cars were the victims of unintended depreciation even if they did not directly suffer from the alleged cases of unintended/sudden acceleration. This is a separate case than the wrongful death suits brought about by the unintended acceleration brouhaha.

When the settlement was announced, this was the overview of its payouts:

Toyota will install brake override systems in all 3.25 million vehicles subjected to the floor mat entrapment recall.
Another fund of $250 million will compensate current owners whose vehicles are not eligible for the free brake override system.
A fund of $250 million will compensate former Toyota owners who sold their cars from September 1, 2009 through December 31, 2010 for lost value.
Education grants valued at $30 million will be made to independent academic institutions to further study auto safety and enhance driver education.
All 16 million current Toyota owners will be eligible for a customer care plan that warrants certain parts allegedly related to unintended acceleration for three to 10 years.

Car and Driver attempts to break down where all that largesse is going, and who's going to get large off of it. We'll start from the top. Having something like three million cars run through service departments to have brake override systems fitted with Toyota stumping up the cash, is probably a win for dealerships and suppliers and even Toyota, obliquely, according to the report. The $250-million fund to reimburse owners whose cars can't be fitted with brake override systems will see each owner get a check for anywhere from $37.50 to $125 depending on the specifics of the model in question. Nobody wins that one.

The $250 million earmarked to compensate owners and lessees for lost value might end up being disbursed to millions of people and institutions, with estimates for individual payouts being from "hundreds of dollars to over a thousand dollars." The paucity of the payout doesn't just reflect the number of payees, it also reflects the near impossibility of an owner being able to determine and prove having suffered a specific amount of financial pain beyond standard depreciation. If anyone gets a trophy from that one, Car and Driver figures it's large used car dealers who moved a lot of Toyota metal during the time span.

$200 million is going to the 85 attorneys at 25 law firms for fees, plus another potential $27 million for their expenses.

Of the $30 million allotted for studies, up to $15 million will go to university studies of safety technology, another $800,000 going specifically to a university that will study "critical gaps in awareness and practice regarding defensive driving skills" including "driver pedal misapplication." The results from that study will be broadcast to the nation via a public safety campaign that will use some portion of the leftover $14.2 million dollars. Obviously, universities and advertising media make out all right with this, and hey, maybe we can all benefit from more research into safety technology.

The reporting doesn't address the extended customer care plan, but since the causes of alleged unintended acceleration haven't gone beyond suppositions of floor mats and pedal misapplication, and since the National Highway Traffic Safety Administration and NASA cleared the vehicles of any defects causative of unintended acceleration, good luck getting that warranty honored. Unless you need new floor mats in 2022.

That gets us up to a potential spend of $530 million so far, plus the cost of the brake override fitment. On top of that is another $200 million going to the 85 attorneys at 25 law firms for fees, plus another potential $27 million for their expenses. If the two hundred mil were split evenly among the 85 (it won't be - it will be disbursed to each according to their effort), that would make each advocate worth more than $2.35 million. And that's before expenses. It's pretty clear who wins that one, isn't it?

And assuming the settlement is approved by the judge, you'd have to figure Toyota wins. The company is about to be declared the largest automaker in the world again and it's predicting record sales for 2013. It could enter 2013 with this part of the ugly episode behind it and using money that has been saved just for the purpose. Not only that, the proposed settlement is less money than outsiders were expecting - word of the estimates actually sent Toyota's stock price up. So some things, like a few lawyers' bonuses, would change, otherwise much has remained just the same...

Why everyone loses but the lawyers in Toyota's unintended acceleration settlement originally appeared on Autoblog on Mon, 31 Dec 2012 17:29:00 EST. Please see our terms for use of feeds.

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Toyota shares rise on smaller-than-expected settlement news

George Kennedy — Thu, 27 Dec 2012 18:00:00 EST

Filed under: Recalls, Safety, Toyota

Following news that Toyota has proposed a massive settlement to address the owners of vehicles effected by the unintended acceleration recall, shares for the automaker are up 2.6 percent. Over the course of this year, Toyota's stock has jumped 51.7 percent.

"My initiate reaction would be 'that's it'... $1 billion charge that covers recalls and everything else and you are looking at a $250 million compensation fund, that's nothing," said a senior trader at a foreign brokerage to Automotive News. This settlement has been set aside to cover class-action lawsuits from 16 million owners of Toyota, Lexus and Scion vehicles and is separate from other impending lawsuits - including one consumer protection suit in California and another unfair-business-practices case brought on by 28 attorneys general.

In other positive news for investors, the Japanese yen has weakened compared to the US dollar. That likely means improved financial performance from the big Japanese automakers, the largest of which is Toyota.

Toyota shares rise on smaller-than-expected settlement news originally appeared on Autoblog on Thu, 27 Dec 2012 18:00:00 EST. Please see our terms for use of feeds.

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Toyota proposes economic loss settlement worth up to $1.4 billion over unintended acceleration claims

John Neff — Wed, 26 Dec 2012 23:15:00 EST

Filed under: Government/Legal, Recalls, Safety, Toyota, Earnings/Financials

Toyota announced a proposal today worth over a billion dollars to settle civil claims of economic loss related to alleged cases of sudden unintended acceleration in its vehicles from 2009-2010. Estimates place the cost of the settlement between $1.1 billion and $1.4 billion, which would, according to lawyers for the plaintiffs, make it the largest of its type in US history.

US District Judge James Selna, who is presiding over the case in California, will review Toyota's settlement proposal as early as Friday.

The details of the settlement, as given by Toyota in an official statement and obtained from a press release issued by lawyers for the plaintiffs, are as follows.

Toyota will install brake override systems in all 3.25 million vehicles subjected to the floor mat entrapment recall.
A fund of $250 million will compensate former Toyota owners who sold their cars from September 1, 2009 through December 31, 2010 for lost value.
Another fund of $250 million will compensate current owners whose vehicles are not eligible for the free brake override system.
All 16 million current Toyota owners will be eligible for a customer care plan that warrants certain parts allegedly related to unintended acceleration for three to 10 years.
Education grants valued at $30 million will be made to independent academic institutions to further study auto safety and enhance driver education.

As mentioned above, the settlement relates only to claims of economic loss, and thus does not cover wrongful death claims, the first trail for which is slated to begin in February 2013.

Also worth noting is that investigations by the National Highway Traffic Safety Administration and NASA engineers concluded that electronics were not at fault in reports of unintended acceleration in Toyota vehicles, leaving only either those faulty floor mats or driver error as likely causes. Feel free to read through the entire press release below.

Continue reading Toyota proposes economic loss settlement worth up to $1.4 billion over unintended acceleration claims

Toyota proposes economic loss settlement worth up to $1.4 billion over unintended acceleration claims originally appeared on Autoblog on Wed, 26 Dec 2012 23:15:00 EST. Please see our terms for use of feeds.

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FIA, Briatore put an end to legal saga

Noah Joseph — Fri, 16 Apr 2010 08:01:00 EST

Filed under: Motorsports, Government/Legal, Renault

It's been a long, drawn-out affair extending back two years since the 2008 Singapore Grand Prix. That's when then-Renault F1 chiefs Flavio Briatore and Pat Symonds allegedly instructed their rookie driver Nelson Piquet Jr to crash on purpose and give the advantage to his world-champion wingman Fernando Alonso. The scandal erupted the following/last season when Piquet blew the whistle. Briatore and Symonds were summarily excommunicated from Formula One and any FIA-regulated racing series (which is pretty much all of them).

Briatore fought back and had the ruling overturned in court on procedural grounds. The FIA said it would appeal Flavio's appeal (and we're not talking about his famous supermodel-luring swagger here), but now the two parties have apparently reached an out-of-court settlement.

Both Briatore and Symonds will soon be cleared to return to F1 or other FIA-sanctioned series, beginning at the start of 2013 F1 season and the end of 2011 for other racing disciplines. In the meantime, the FIA is abandoning further legal recourse, citing the best interest of the organization and of motorsport as its motivation.

[Source: Autosport | Image: Paul Gilham/Getty]

FIA, Briatore put an end to legal saga originally appeared on Autoblog on Fri, 16 Apr 2010 08:01:00 EST. Please see our terms for use of feeds.

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Ford settling class-action lawsuits related to rollovers

Damon Lavrinc — Thu, 29 Nov 2007 08:03:00 EST

Filed under: SUV, Government/Legal, Safety, Ford

FoMoCo is on the brink of settling a class-action lawsuit brought by owners claiming that Ford's Explorer was prone to rolling over. The settlement covers approximately one million people in California, Connecticut, Illinois and Texas who've owned 1991 through 2001 Explorers.

Ford's spokesperson, Kristen Kinley, believes that "the settlement is fair and reasonable," but declined to given an estimate of how much Ford would be shilling out to slighted owners. However, vouchers are expected to be issued to owners in the four states that would allow them to put $500 towards a new Explorer or $300 for another Ford, Lincoln or Mercury product.

[Source: Detroit News]

Ford settling class-action lawsuits related to rollovers originally appeared on Autoblog on Thu, 29 Nov 2007 08:03:00 EST. Please see our terms for use of feeds.

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Odo Uh-Oh: Honda extending warranties on 6 million cars

John Neff — Mon, 19 Feb 2007 12:25:00 EST

Filed under: Government/Legal, Honda

Honda has decided to settle a class-action lawsuit that alleges its odometers were racking up miles too fast. The automaker says odometers on some 6 million Hondas affected by the suit were accurate to within 3.75% on the high side. The NHTSA doesn't regulate odometer accuracy, and the only industry standard is a voluntary one set by the Society of Automotive Engineers that says odos should be within +/-4%. While the car's affected by the suit fall within that range, Honda recognized that its customers expected their odometers "would be based on zero," and they weren't.

The settlement will lengthen the warranty mileage of affected vehicles by 5% and Honda will pay lease-mileage penalties incurred by owners, which is expected to cost the automaker around $6 million. If you own a 2002 to 2006 Honda or Acura bought between April 12, 2002 and November 7, 2006, then you're eligible for the benefits of the settlement.

The lawsuit also prompted lawyers to test the odometer accuracy of other vehicles. It was found that on average domestic vehicles were nearly perfect in their odo accuracy, while Toyotas actually racked up fewer miles on the clock than they did in reality. Nissans, however, didn't fare as well, and a new class-action suit has been filed on behalf of Altima owners who say their odometers are counting the miles 2.5% to 3% faster than they should.

[Source: USA Today]

Thanks for the tip, John!

Odo Uh-Oh: Honda extending warranties on 6 million cars originally appeared on Autoblog on Mon, 19 Feb 2007 12:25:00 EST. Please see our terms for use of feeds.

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CARFAX agrees to settlement in class-action lawsuit

Scott Davis — Thu, 18 Jan 2007 15:29:00 EST

Filed under: Car Buying, Etc.

CarFax is becoming an increasingly popular tool used by both buyers and sellers of vehicles as a way to verify a vehicle's history. Unfortunately, the internet-based service outfit has had to settle a class-action lawsuit that accuses the company of misleading customers into thinking that its reports contain more information than they really do. Despite the settlement, CarFax admits to no wrongdoing.

If you purchased a CarFax vehicle report anytime before October 27, 2006, you now have to decide weather or not you want to take advantage of the settlement offer from CarFax. It is offering eligible customers either free or reduced price reports or $20 towards a vehicle inspection at a technician of their choice.

Read the entire settlement letter after the jump

[Source: Consumer Reports]

Continue reading CARFAX agrees to settlement in class-action lawsuit

CARFAX agrees to settlement in class-action lawsuit originally appeared on Autoblog on Thu, 18 Jan 2007 15:29:00 EST. Please see our terms for use of feeds.

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DaimlerChrysler and insurers agree on settlement payout

John Neff — Tue, 02 Jan 2007 19:02:00 EST

Filed under: Government/Legal, Daimler

DaimlerChrysler has finally reached an agreement with its insurers that finally determines who is paying what in a settlement of a lawsuit filed by the automaker's investors over the nature of the merger that created company back in 1998. Chrysler stock holders originally argued that the Daimler-Benz deceived them when describing the joining of both companies as a "merger of equals" and sought an outrageous $22 billion in damages. The lawsuit quotes then DaimlerChrysler head honcho Jürgen Schrempp (shown at right) as saying in a 2000 interview that calling the deal a merger rather than a takovoer was for "psychological reasons" only. That slip of the tonght cost Schrempp and the company as a whole, which was counting on Schrempp's liability insurance to cover most or all of the $300 million settlement that was reached. Many of the company's insurer's, however, refused to pay.

Originally the insurers coughed up $25 million, forcing DCX to pay the rest. Of the remaining $228 million left to be payed on the settlement, the Associated Press is now reporting that insurers insurers have agreed to pay for over $223 million.

[Source: Associated Press via International Herald Tribune]

DaimlerChrysler and insurers agree on settlement payout originally appeared on Autoblog on Tue, 02 Jan 2007 19:02:00 EST. Please see our terms for use of feeds.

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