In the recent hubbub of General Motors’ recall lawsuits, one may be forgiven for forgetting that Toyota Motor Corp. has undergone its fair share of investigations and lawsuits as well related to claims of sudden car acceleration.
However, those investigations will soon be coming to an end — at a heavy cost for Toyota. The Department of Justice (DOJ) announced on March 19 that it has reached an agreement with the car company to pay $1.2 billion to end a criminal probe into the sudden acceleration issue.
At a press conference announcing the penalty, U.S. Attorney General Eric Holder called the settlement the largest criminal penalty imposed on an automaker in the U.S. Through the terms of the agreement, Toyota will also fully admit wrongdoing, be subjected to a “rigorous” review by an independent monitor, and be charged with wire fraud, with the prosecution deferred three years pending good behavior.
“Toyota intentionally concealed information and misled the public,” said Holder at the news conference. The company “confronted a public safety emergency as if it were a simple public relations problem.”
Before Toyota entered into talks with the DOJ, trials were set for February in Michigan and March in California. In California alone, Toyota faced nearly 200 claims related to its cars’ sudden acceleration. Due to the acceleration issues, the company recalled more than 10 million Toyota and Lexus vehicles beginning in 2009.
“In the more than four years since these recalls, we have gone back to basics at Toyota to put our customers first,” said Christopher P. Reynolds, chief legal officer for Toyota Motor North America, in a statement. “We have made fundamental changes across our global operations to become a more responsive company — listening better to our customers’ needs and proactively taking action to serve them.”
While this settlement ends the government’s criminal probe into the company, Toyota has separately engaged in settlements with Toyota customers who suffered loss from vehicle malfunctions. In late 2012, Toyota paid $1.1 billion to settle a host of lawsuits stemming both economic loss and wrongful death.
For the full story on how we got here, read these InsideCounsel stories: