Toyota faces new challenges in court

Posted By The Carlson Law Firm || 31-Jul-2012

Following months of massive recalls, millions in fines levied by the Department of Transportation (DOT) and possible investigations by the Securities and Exchange Commission (SEC), automotive giant Toyota is facing new challenges – in court.

After vehicle recalls linked to acceleration and pedal defects, the Japanese automaker is before the United States District Court in Santa Ana as the result of various lawsuits claiming deaths and personal injuries. The new twist in the litigation is that Toyota is facing allegations that the automaker knew about the defects for years and failed to notify the Federal government and consumers in a timely manner.

Counsel for the world’s largest automaker attempted to have the suits dismissed, but U.S. District Judge James V. Selna denied Toyota’s requests. Judge Selna was selected by the United States Judicial Panel on Multidistrict Litigation to hear the various suits alleging the Japanese automaker’s failure to disclose known defects.

Reports have surfaced that employees of some of Toyota’s dealers were aware of the acceleration issues. Additional claims have been made that Toyota might have entered into confidentiality agreements with vehicle owners who had complained of similar issues. These allegations are bolstered by a number of internal documents provided by Toyota as part of this year’s Congressional inquiry. Thousands of complaints, some lodged 10 years ago, identify acceleration issues, including floor mat and gas pedal problems.

Automakers and parts manufacturers have a legal obligation to make sure that their products are functional and safe before they are introduced into the marketplace. If they are negligent, manufacturers can face product liability claims for a vehicle’s accident-related injuries and damages.

Toyota has been one of the most trusted names in the automotive industry since the company’s founding in 1937. This auto giant has taken hits to its reputation and profit margins as a result of ongoing recalls and continuing consumer complaints. Struggling to rebuild its international reputation, Toyota will not only have to face continuing governmental scrutiny, but also public scrutiny while these contested legal matters play out.

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