Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Toyota Motor Corp. moved on Thursday to dismiss a consolidated lawsuit alleging that its shareholders suffered massive losses following a string of recent recalls associated with floor mats and accelerator pedals. The suits allege that Toyota issued false and misleading statements in conference calls with investors, filings with the U.S. Securities and Exchange Commission and in interviews with the press — all of which caused its shares to be artificially inflated. Many of those statements caused Toyota’s shares to drop. Toyota fired back in its motion, filed with U.S. District Judge Dale Fischer in Los Angeles, asserting that the lawsuit fails to prove that any of the statements were false or misleading. “Toyota believes this securities case is without merit,” said Steve Curtis, a Toyota spokesman, in a prepared statement. “While the Court is required to accept all of the plaintiffs’ allegations as true at this stage of the proceedings, Toyota believes the case should be dismissed for its flawed legal claims and failure to meet the basic pleading requirements under U.S. law.” Blair Nicholas, a partner in the San Diego office of Bernstein Litowitz Berger & Grossman, co-lead plaintiffs’ counsel in the case, referred a request for comment to his client, John Kuchno, assistant attorney general of the Maryland State Retirement Agency, who did not respond. The suit asserts claims for shareholders of American depository shares — Toyota shares sold on the New York Stock Exchange — under the U.S. Securities Exchange Act of 1934 and for a class of shareholders who bought common stock on the Tokyo Stock Exchange under Japan’s Financial Instruments and Exchange Act. The Japanese law claims were added following the U.S. Supreme Court’s decision in Morrison v. National Australia Bank, in which the justices found that investors who purchase a foreign company’s stock on a foreign exchange lack standing to sue in U.S. courts under federal securities laws. Toyota on Thursday claimed that the move to file under Japanese law “represents a transparent attempt by Plaintiffs’ counsel…to make an end-run around” the Supreme Court’s decision. The suit names Toyota, its subsidiaries Toyota Motor North America Inc. and Toyota Motor Sales USA Inc., and several officers and directors. Responding as part of Toyota’s motion were James Lentz, president and chief operating officer of Toyota USA; Yoshimi Inaba, president and chief operating officer of Toyota North America; Irving Miller, group vice president of environmental and public affairs at Toyota Motor Sales USA; Robert Carter, group vice president and general manager for the Toyota division of Toyota Motor Sales USA; and Robert Daly, senior vice president of Toyota Motor Sales USA. The class covers shareholders who owned shares between May 10, 2005, and Feb. 2, 2010. The suit alleges that despite making claims about safety and quality, internal communications at Toyota reflected a “high volume” of complaints and accidents associated with unintended acceleration since at least 2000. The problems led Toyota to recall more than 10 million vehicles for defective accelerator pedals and floor mats. Toyota said such claims didn’t belong in a securities action. “This class action is an attempt by Plaintiffs to mutate product liability, consumer and automotive industry regulatory claims into securities fraud,” wrote Toyota’s lawyer, Stuart Baskin, a New York partner at Shearman & Sterling. There are insufficient facts to prove that 26 of the 33 alleged statements were false or misleading, rather than mere “puffery,” or that any of the executives acted with knowledge that their statements were untrue, Toyota’s motion says. Toyota never restated its financials nor hyped forecasts, it adds. Furthermore, the individuals named in the case, “all senior executives in a massive corporation,” did not know anything about the “technical, engineering ‘sticky pedal’ issue when they made the statements at issue,” Toyota’s motion says. On the Japanese law claim, Toyota said those allegations belong in Japanese court, not U.S. courts. Toyota is being represented by a team at Shearman & Sterling that includes partners Patrick Robbins and Jeffrey Facter, as well as Gibson, Dunn & Crutcher’s Kay Kochenderfer. A hearing on the dismissal motion is scheduled for May 23. Amanda Bronstad can be contacted at [email protected].

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.