Court Approves $1.1 Billion Class-Action Settlement by Toyota

On Friday, U.S. District Judge James Selna in Santa Ana, California, granted preliminary approval to Toyota’s $1.1 billion settlement of a class-action lawsuit over sudden and unintended acceleration in certain Toyota cars. Consumers filed the lawsuit claiming they had lost value due to uncertain behavior of the vehicles.

The deal, which would receive final approval in June provides $500 million in cash for the plaintiffs, makes for installation of break override systems and will put in place a customer support program valued at a combined sum of $600 million.

While granting preliminary approval to the settlement the judge wrote, “Settlement will likely serve the interests of the class members better than litigation.”

Steve Berman, the lawyer for the plaintiffs said he was pleased with the order. Julie Hamp, the spokeswoman of Toyota said the company was happy with court approval of the settlement and it “will provide value to our customers and provides an extra measure of confidence in their vehicles.”

The problems were apparent in about 16 million Scion and Lexus cars sold in the United States stretching from model years 1998 to 2010, as covered by the settlement. However, Toyota officials maintain that the electronic throttle control system was not at fault, but that the problems were caused principally due to poorly fitting floor mats and ungainly gas pedals.

Toyota’s claims were supported by a study by federal safety officials at the National Highway Traffic Safety Administration, and NASA, and none of the organizations could find or establish any connection between the reports of unintended acceleration and the electronic throttle control system used by Toyota.

While proposing the settlement, Toyota did not admit any fault on its part. The company’s shares and sales continue to grow in the U.S. market despite complaints by consumers.

Commenting on the rulings he had issued throughout the case, judge Selna said, “Some of these rulings have been favorable to plaintiffs, some have been favorable to Toyota … Were the parties to proceed to a fully litigated result, virtually any outcome would face the risk of uncertainty upon appellate review of these rulings.”

The settlement, which also received approval for $200 million in attorneys’ fees, does not cover the almost 300 wrongful death or injury lawsuits currently pending in courts against Toyota.