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A federal judge has ruled that class claims for economic damages against Toyota Motor Corp. in the sudden, unintended acceleration multidistrict litigation can go forward based on the injuries alleged. U.S. District Judge James Selna issued his final order on May 13 in the MDL, which involves more than 200 lawsuits brought on behalf of consumers. The ruling mirrored a tentative order Selna issued on April 29. Selna also issued a tentative ruling against Toyota on the issue of whether California law, which is being asserted by plaintiffs across the nation in the consolidated complaint, can be applied to both Toyota and its subsidiary, Toyota Motor Sales USA Inc., which is based in California, without depriving the company of its due process rights. Selna scheduled a late hearing on May 16 regarding that issue. The dismissal ruling marked the second time that Selna refused to dismiss the economic-loss master consolidated complaint, a nationwide action filed on behalf of consumers who allege economic losses due to sudden acceleration defects. On Nov. 30, Selna denied a motion to dismiss the complaint, ruling that consumers who overpaid for their vehicles, made lease payments that were too high or sold their vehicles at a loss had established sufficient economic injuries. But he dismissed claims by some consumers who failed to assert sufficient injuries beyond the fact that they had purchased a Toyota vehicle that was later recalled. In his May 13 order, Selna allowed those claims to proceed based on the amended claims that the consumers had relied on advertising materials promoting the safety of Toyota’s vehicles and that the vehicles lacked a fail-safe mechanism that would have prevented them from accelerating out of control. “We believe – and intend to prove – that Toyota was aware of the defect, and chose not to take action to protect consumers,” said Steve Berman, managing partner of Seattle’s Hagens Berman Sobol Shapiro and co-lead counsel on the plaintiffs’ steering committee for the economic loss class actions, in a prepared statement on May 16. “Aside from the overall victory in allowing the case to move forward, Judge Selna agreed with many of our underlying arguments in the case, including our contention that Toyota owners who did not attempt to sell their vehicle could still bring a claim because they overpaid for their vehicles, buying cars that were not worth as much as a car free of these defects.” Toyota spokeswoman Celeste Migliore also issued formal statement: “Although Toyota is confident that no defect exists in its Electronic Throttle Control System, at this early stage of the litigation the Court is required to accept as true all of the factual allegations made by plaintiffs’ counsel in ruling on Toyota’s Motion to Dismiss. The burden is now squarely on plaintiffs’ counsel to prove their allegations, and Toyota is confident that no such proof exists.” The ruling did not address claims of personal injuries or wrongful deaths caused by accidents allegedly caused by sudden acceleration. Selna refused to grant Toyota’s motion to strike consumer claims based on violations of the Transportation Recall Enhancement, Accountability and Documentation Act, which imposed stricter reporting requirements on manufacturers following the Ford/Firestone recalls. “The fact that Toyota had a duty to disclose to [the National Highway Traffic Safety Administration] rather than consumers does not exonerate the statutory duty to disclose material facts to consumers,” he wrote. He also refused to take judicial notice of a Feb. 8 report by the NHTSA and the National Aeronautics & Space Administration concluding there was insufficient proof of electronic defects in Toyota vehicles. Rather, the agencies concluded that mechanical defects – specifically, faulty floor mats and accelerator pedals – caused the sudden acceleration. Toyota has recalled nearly 10 million vehicles because of the problems and has paid $48.8 million in related civil penalties. But Selna dismissed some warranty claims, as well as revocation claims and claims of unjust enrichment. On the choice of law issue, plaintiffs have argued that California law should dictate the consolidated complaint. “Nearly all of the economic loss claims arise from statements and omissions made by [Toyota Motor Sales] on behalf of itself and [Toyota Motor Corp.],” they wrote in court documents. They noted that all of the company’s marketing and advertising is directed by Toyota Motor Sales. Toyota has argued that California law should not dictate the economic loss claims for 148 lawsuits filed outside the state. Migliore noted that about 70% of the economic loss cases in the MDL were originally filed outside California in states with different consumer laws. “We believe applying California law to plaintiffs who purchased, drove, and maintained their vehicles outside the state would fly in the face of Supreme Court precedent and trample on each state’s right to create and enforce its own laws,” she said. “Just as important, California simply was not the epicenter of the events in these lawsuits.” She noted that most of the vehicles in the litigation were not designed or manufactured in California. In a May 16 memo, Selna temporarily ruled against Toyota on the due process argument but said the issue was a “complex undertaking” that is “subject of more recent elucidation.” Amanda Bronstad can be contacted at [email protected].

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