Toyota Settles With AGs for $29 Million Over Safety Issues
The National Law Journal
Toyota Motor Corp. and its U.S. subsidiaries agreed on February 14 to pay $29 million to resolve investigations by attorneys general in 29 states into whether it misled consumers about the safety of its vehicles.
The investigations followed recalls of more than 10 million vehicles for defects associated with sudden acceleration. They focused on whether Toyota had misled consumers about safety problems in models including the Camry, Lexus, Tundra, Tacoma and Prius hybrid.
The states and the U.S. territory of American Samoa will split the money. The settlement sets aside an additional $5 million for customers who had to pay for rental cars or taxi fares while their cars were being repaired.
Toyota agreed to notify new buyers about defects in vehicles that it had purchased from previous owners. It also agreed not to designate any vehicle with alleged safety defects as "Toyota certified" or misrepresent why a dealer has inspected or repaired a vehicle.
Toyota also agreed to improve communications between its Japan headquarters and its U.S. subsidiaries about how to handle safety problems.
"This is an important settlement, not only because of the dollars, but because the terms are designed to help make Toyota more accountable, responsive and vigilant regarding vehicle safety issues," said New Jersey Attorney General Jeffrey Chiesa, who led the multistate investigations in cooperation with the attorneys general of Connecticut, Florida, Louisiana, Michigan, Nevada, Ohio, South Carolina and Washington.
The deal does not involve the states of California or New York, where hundreds of lawsuits are pending against Toyota over accidents attributed to sudden acceleration defects. Both states reached agreements in 2010 with Toyota to provide special accommodations for owners of vehicles affected by the recalls, such as picking up and returning their vehicles from their homes or reimbursing them for alternative transportation costs.
Christopher Reynolds, group vice president and general counsel of Toyota Motor Sales U.S.A., a division of Toyota Motor Corp., said in prepared statement: "Resolving this inquiry is another step we are taking to turn the page on legacy issues from Toyota's past recalls in a way that benefits our customers. Immediately after this inquiry was launched in 2010, Toyota began cooperating fully with the Attorneys General and implementing 'customer-first' initiatives to address their concerns and those of our customers. Today, we are pleased to have reached a cooperative agreement that reflects the commitment of Toyota's 37,000 North American team members to put customers first in everything we do."
The settlement was the latest move by Toyota to resolve claims associated with unintended acceleration. On December 26, the company agreed to pay $1.3 billion to resolve a nationwide class action alleging the company's advertising and marketing materials misled consumers about the safety of its vehicles. Toyota has paid fines totaling $48.8 million to the U.S. National Highway Traffic Safety Administration for failing to timely inform regulators about defects tied to its initial recalls, plus $17.5 million in additional fines associated with its recall of nearly 155,000 Lexus RX models last June for floor mat entrapment problems.
Several attorneys general praised the latest agreement. Florida Attorney General Pam Bondi said her state would receive $2 million, including attorney fees. Chiesa said New Jersey would receive $1.9 million. Connecticut Attorney General George Jepsen and Nevada Attorney General Catherine Masto said their states would receive about $1.4 million each.
Also participating were Alabama, Arizona, Arkansas, Colorado, Illinois, Iowa, Kansas, Maryland, Minnesota, Mississippi, Nebraska, New Mexico, North Carolina, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Virginia and Wisconsin, as well as American Samoa.
Several of those states estimated their share of the settlement:
Illinois: Nearly $1 million.
North Carolina: Nearly $810,000
Arkansas: More than $575,000
Iowa: More than $580,000
New Mexico: $546,000
Rhode Island: $510,000
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