Update: Judge Selna heard arguments on his tentative order during an afternoon hearing on April 23. Steve Berman, managing partner of Seattle’s Hagens Berman Sobol Shapiro, co-lead counsel in the consolidated class action, argued that Toyota’s line of reasoning would have plaintiffs “drive a ticking time bomb and wait till it explodes” before they bring a case. “I’m disappointed with the tentative,” he said later. “This is kind of a unique case where you have thousands of crashes, hundreds of deaths.”
Toyota spokeswoman Celeste Migliore issued a statement following the hearing: “We believe the law is clear plaintiffs from New York and Florida who continue to operate their vehicles and do not allege to have experienced unintended acceleration or incurred an economic loss have no legally recognizable claims against Toyota under these states’ laws.”
A federal judge has tentatively dismissed the economic damages claims of consumers in Florida and New York against Toyota Motor Corp. in the litigation over sudden acceleration by Toyota vehicles, on the ground that they hadn’t actually experienced the problem.
The April 23 tentative ruling by U.S. District Judge James Selna in Santa Ana, Calif., would not affect consumers in California or other states, but, if finalized, could wipe out a substantial number of claims in the master class action complaint against Toyota.
Selna was scheduled to hear arguments on his tentative order during an afternoon hearing on April 23.
Steve Berman, managing partner of Seattle’s Hagens Berman Sobol Shapiro, co-lead counsel in the consolidated class action, did not return a call for comment, and Toyota spokeswoman Celeste Migliore declined to comment.
If made final, the ruling would amount to a big win for Toyota, which is seeking to gut the claims that consumers in California, Florida and New York are entitled to economic damages because the company made false and misleading statements about the safety of its vehicles under the laws of their respective states. The plaintiffs claim that, as a result of Toyota’s alleged undisclosed defects associated with sudden acceleration, their vehicles lost value.
Such economic-damages claims represent 200 of the 300 cases in the multidistrict litigation. The rest would be unaffected because they were filed on behalf of individuals who were injured or died in accidents attributed to sudden acceleration.
The consolidated class action, filed on behalf of 27 named plaintiffs, is scheduled for trial on July 31, 2013.
On March 12, Selna rejected Toyota’s move to dismiss 20 of the named plaintiffs on the basis that their claims should be arbitrated. As for the 15 named plaintiffs in California, Selna concluded that Toyota had too aggressively pursued its defense in court and in any event had waited too long to pursue arbitration. Regarding the remaining five plaintiffs one in New York and four in Florida Selna found that the dealerships, not Toyota, had the right to enforce arbitration provisions signed by consumers in their purchase and lease agreements.
Toyota has petitioned the U.S. Court of Appeals for the Ninth Circuit for permission to pursue an interlocutory appeal of that ruling.
Selna’s latest ruling addressed a separate motion to dismiss in which Toyota argued that nine of the 14 plaintiffs in New York and Florida have not alleged a product defect under the laws of those states. Toyota also moved to dismiss six plaintiffs in California who experienced no defect, citing an Oct. 18 ruling by California’s Second District Court of Appeal in American Honda Motor Co. v. Superior Court, which found that a consumer must have experienced a defect or be “substantially certain” that a defect could occur.
Selna did not address the California plaintiffs in his tentative order.
He dismissed four of the five claims brought by Florida named plaintiffs, concluding that they had not experienced an acceleration defect as required under Florida law. He upheld the claims of the fifth named plaintiff, whose vehicle allegedly experienced the defect. Also regarding that remaining Florida named plaintiff, Selna upheld consumer claims under Florida’s Unfair & Deceptive Trade Practices Act.
He dismissed the claims of a New York couple whose vehicle had not experienced an acceleration defect. He upheld another couple’s claims because they had sufficiently alleged a defect and the claims of a third named plaintiff who had traded in her Prius for a reduced amount.
In so doing, Selna found that “the New York Class Representatives may not maintain their claims against the Toyota Defendants in the absence of allegations regarding a manifested defect or the actual or attempted resale of a vehicle that reflects a loss in value as a result of the defect.”
Regarding those named plaintiffs in New York whose cases he upheld, Selna ruled that claims under the New York Consumer Protection Act could go forward as long as consumers purchased their vehicles after November 2006 under the statute of limitations.
He upheld various other claims in both states, including fraudulent concealment, as long as consumers had vehicles with actual acceleration defects.
The case is the second consolidated consumer class action in the sudden acceleration litigation. The first one, filed on behalf of a proposed nationwide class under California law, fell apart after Selna ruled on June 8 that consumers who lived in states other than California could not pursue economic damages under that state’s law. On Sept. 20, the plaintiffs steering committee filed an amended class action limiting the case to consumers in California, New York and Florida.
Contact Amanda Bronstad at [email protected].