Toyota has settled one of the last remaining cases brought on behalf of consumers over sudden acceleration defects.
Toyota Motor Sales U.S.A. Inc. announced an agreement late Friday with Orange County, Calif., District Attorney Tony Rackaukus to resolve claims that Toyota concealed from consumers safety problems related to its vehicles in violation of California law.
Under the settlement, Toyota will pay $16 million — half to the district attorney’s office and half to a local gang prevention program.
“The possibility of experiencing an unintended acceleration event during Toyota’s recall crisis clearly scared many consumers,” Rackauckas said in a prepared statement, referring to Toyota’s recall of nearly 10 million vehicles during 2009 and 2010. “This settlement is an important step in holding Toyota accountable for the safety and security of their customers.”
The settlement does not resolve hundreds of cases pending in multidistrict litigation in federal court in California asserting that drivers were injured or died in accidents attributed to sudden acceleration. But it did mark the latest agreement by Toyota to resolve claims associated with sudden acceleration issues.
On December 26, Toyota agreed to resolve hundreds of consumer actions pending in multidistrict litigation in Santa Ana, Calif., for a figure plaintiffs’ attorneys have estimated at $1.3 billion. That litigation asserted economic damages claims on behalf of Toyota consumers — including those in California, for whom the Orange County district attorney had filed its suit. That litigation asserted economic damages claims on behalf of Toyota consumers.
At the time of that settlement, Toyota said it would take a $1.1 billion pre-tax charge against earnings to cover the economic claims and “possible resolution costs of civil litigation brought in California by the District Attorney of Orange County.” That charge included $29 million to resolve consumer claims by attorneys general in 29 states and one U.S. territory against Toyota.
Toyota has paid $25.5 million to resolve claims by shareholders and settled two individual cases just before they were expected to go to trial. The terms of both of those agreements were confidential.
“As we continue to turn the page on legacy legal issues related to our past recalls, we are pleased to have resolved these allegations in a way that supports the communities where our customers live and work,” Christopher Reynolds, group vice president and general counsel of Toyota Motor Sales U.S.A. Inc., said in a prepared statement. “We remain focused on continuously enhancing our quality assurance operations and strengthening our ability to meet customer expectations, and we are grateful for their continued support.”
About $4 million of the settlement fund will go toward the district attorney’s efforts regarding economic crimes. Another $4 million will go to costs and fees, including those charged by outside counsel, led by Mark Robinson of NewportBeach, Calif.’s Robinson Calcagnie Robinson Shapiro Davis Inc. Robinson, who took the case on a contingent basis, did not return a call for comment.
His involvement in the case raised the ire of the Civil Justice Association of California, which has opposed the practice of prosecutors hiring outside counsel to sue on the public’s behalf. In 2011, the tort reform group wrote a letter to Rackauckas demanding that the contingent fee agreement with Robinson’s firm be made public. Rackauckas did so within 24 hours, revealing that Robinson had agreed to resolve all disputes over fees with the district attorney’s office in arbitration.
The gang program, called the Orange County Gang Reduction Intervention Partnership, is a collaboration between the district attorney’s office, the Orange County Sheriff’s Department, police departments in Orange County cities, the state Department of Education and several private companies and churches including the Los Angeles Angels of Anaheim, Rick Warren’s Saddleback Church, Ford Motor Co. and Ralph’s grocery stores.
“We use team work and incentives with kids who are at risk of becoming gang members to keep them in school, give them incentives and steer them away from the gang lifestyle,” Rackackus said. “This has been a growing effort that is proving to help keep our community safe and create an environment of education and productivity for the good of the kids as well. This settlement with Toyota will benefit public safety by adding substantial momentum to this great movement.”
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