State of Connecticut v. Toyota Motor Corporation et al.: Connecticut is slated to collect $1.4 million as part of a $29 million settlement between Toyota and 29 U.S. states.
According to the Connecticut Attorney General’s Office, Toyota concealed safety issues related to unintended acceleration on certain Toyota and Lexus model cars, including the Camry, Tundra, Tacoma and Prius hybrid.
Attorneys general from the many states sued Toyota in 2010 after it recalled 14 million vehicles globally for accelerating without warning. The lawsuit accused Toyota of failing to notify customers promptly about the problems. Toyota has blamed sticky gas pedals, faulty floor mats and driver error.
During their investigation, the attorneys general found that poor communication between Toyota’s headquarters in Japan and its U.S. operations had contributed to the problem.
In the settlement, Toyota has agreed to notify new buyers about defects in vehicles that it had purchased from previous owners. It also has agreed not to designate any vehicle with alleged safety defects as "Toyota certified" or misrepresent why a dealer has inspected or repaired a vehicle.
Further, the company agreed to improve communications between its Japan headquarters and its U.S. subsidiaries about how to handle safety problems.
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.
"This is a good result for the nation’s consumers because Toyota has agreed to comply with all state laws prohibiting false and misleading advertising," Attorney General George Jepsen said in a statement. "In addition, Toyota agreed to comply with all state lemon laws, and all state and federal laws that apply to motor vehicles manufactured or sold by Toyota in the United States…"
Connecticut was part of a nine-state executive committee that investigated the unintended acceleration issues and negotiated the settlement agreement. The safety and design defects were investigated separately by the National Highway Traffic Safety Administration, resulting in $48.8 million in fines and penalties paid by Toyota in April and December 2010.
The multistate investigation focused on consumer disclosure issues and misrepresentations, such as: when Toyota was aware of the acceleration problem; whether it made timely disclosure to consumers; whether Toyota misrepresented the safety of vehicles to consumers through deceptive advertisements; and whether Toyota sold reacquired vehicles without disclosing that acceleration complaints had been made about them.
Connecticut Assistant Attorney General Matthew Fitzsimmons, who served on the national executive committee, said settlement negotiations began in January 2010 and that there were four sets of meetings, with the most recent taking place in Washington D.C., when an agreement was reached in principle.
"What we typically try to do is work out the non-monetary provisions before we even start talking about money," Fitzsimmons said. "It’s almost always more important to make sure any corrective action is worked out first before you start talking about an actual figure with the states. We were pretty intent to include somewhere in there that Toyota does a better job of sharing information."
Fitzsimmons said the committee viewed more than 100,000 Toyota documents during its investigation and negotiations. He said the smaller executive committee would report back to the larger group of 29 states about developments in the negotiations.
"It would be a bit unwieldy if every single conversation with Toyota included 29 states at the table," said Fitzsimmons, who was assisted by Phillip Rosario, head of the Consumer Protection Department of the Attorney General’s Office.
As part of the settlement agreement, Toyota has agreed to work harder to ensure that its U.S. executives have timely access to corporate information, as well as the authority to fully participate in all decisions affecting the safe operation of Toyota vehicles advertised and sold in the United States.
Specifically, Toyota has agreed to post owners’ manuals online in an effort to make sure vehicle information is easily accessible.
The company will also expand its rapid response teams, which respond within 24 hours to safety issues that are reported by customers. The teams draw from a group of 200 technical experts located across Toyota’s North American operations.
Under the agreement, most of the $1.4 million Connecticut will receive from Toyota will be allocated to the state’s general fund, Fitzsimmons said.
Christopher Reynolds, group vice president and general counsel of Toyota Motor Sales U.S.A., a division of Toyota Motor Corp., said in a 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."
In addition to the $48.8 million fine paid to the National Highway Traffic Safety Administration, the company agreed to pay $1.3 billion in December to resolve a nationwide class action alleging the company’s advertising and marketing materials misled consumers about the safety of its vehicles.
The latest $29 million settlement does not involve California or New York, where hundreds of lawsuits are pending against Toyota over accidents attributed to sudden acceleration defects. Toyota also continues to negotiate individual cases, including an undisclosed settlement reached last month with the families of two people killed when their Toyota Camry slammed into a wall in Utah in 2010. •