Orange County D.A. Suing Toyota
Jason Lancaster | Mar 12, 2010 | Comments 13
Orange County District Attorney Tony Rackauckas has announced his office will partner with a local private law firm to sue Toyota USA for selling defective vehicles and deceptive business practices. Here’s what Rackauckas is arguing:
1. Toyota knew about floor mat entrapment, over-sized accelerator pedals, and sticking pedals as far back as 2007 (and some data shows 2005). While Rackaukas will have to prove that Toyota hid this information from consumers intentionally, documents uncovered by congressional testimony seem to prove Toyota had known about some of these problems for at least the last 3 years.
2. It seems likely Toyota tried to hide these problems. It seems that Toyota’s culture of secrecy led managers and engineers to hide many of these problems, but Rackaukas will have to prove it in court. This is the rub – did Toyota hide evidence, or did their huge bureaucracy simply swallow the information on accident?
3. Orange County’s D.A. could be joined by other D.A.’s and State Attorney Generals across the country. This could be the opening of a flood gate of piggyback lawsuits, similar to the lawsuits against big tobacco a few years ago that alleged cigarette companies hid the dangers of smoking from their customers.
Toyota’s Next Moves
First, Toyota must argue that the Orange County D.A. has no legal right to sue. NHTSA has the responsibility of protecting consumers from automakers, and it seems that Rackaukas might be overstepping his bounds.
After all, it sets a bad precedent if any county D.A. can sue a major automaker for any reason he or she sees fit. NHTSA’s role is to protect the public – it would seem that their regulatory authority would superced the Orange County D.A. … but who knows.
Second, Toyota has to figure out how to keep this from spreading. Any Attorney General or D.A. is going to want to put his or her name in the ring simply because of the political benefits. Toyota will likely try to “drown” Rackaukas and his office in paperwork, which will help to dissuade other offices from joining in.
Third, Toyota has got to have a “come to Jesus” meeting in Toyota City and decide if it’s time to tell the truth. If Toyota really did hide evidence intentionally (the key is that it was intentional), then the smart move is to come clean and settle. Considering some of the comments that Akio Toyoda has made to congress, it seems Toyota will argue they weren’t trying to hide the problem…but who knows what evidence Rackaukas may have.
The irony here is that, in order for Toyota to prove they were following the rules and not trying to hide evidence of safety problems, Toyota must prove that NHTSA has been “in the loop” since problems started cropping up a few years ago. As part of that process, Ray LaHood (the head of the D.O.T., which manages NHTSA) is going to have to work closely with Toyota to prove his own agency is competent…which seems unlikely at best.
At the end of this whole thing, both NHTSA and Toyota could look pretty bad if it comes to light that they worked together to hide this problem.
The Silver Lining for Toyota
Toyota sales in March are very strong, with no sign that they’re letting up. The fact is, consumers are quick to forget and it seems like the news cycle on this whole issue is just about over. Unless the media gets really excited about following a lawsuit that will take 2-10 years to process, today’s announcement is probably the worst of it (in terms of P.R.).
Filed Under: Auto News
Orange County DA probably doesn’t have enough to do with cases over there. I’m glad you cleared some of this up with NHTSA. I still don’t see how a county DA can sue a manufacturer. Which Orange County FL or CA? I see one reason why he’s going after it. Is it linked to the NUMMI closing? Maybe trying to settle out with Toyota keeping the factory opened?
I don’t think the last few sentences stating Toyota sales in March are very strong. My local toyota dealer has salespeople twiddling their thumbs and they even told me February sales were one of the worst ever. I don’t think the whole issue is over anywhere close either. A fellow new 2010 toyota corolla owner I know had his gas pedal recall done and waiting in the car was a full unopened plastic bottle of water in the cupholder and a bar of fancy chocolate just to show the dealers’ customer appreciation. Wow, what about free oil changes for 3 years or free routine maintenance for 3 years?
I could go for that but don’t expect it. I didn’t get anything but heartaches on the other vehicles recalls. So why expect it here.
Toyota sales are strong for the month of March? Compared to what? How strong, numbers? If a DA doesn’t have a case do you think they would try it?
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MK your friend can purchase a maintenance plan if that is what he wants. So everyone who owns a Toyota with a recall deserves this as compensation? Let’s say oil changes for 1 year cost what $32 dollars what 3 times a year. So that’s about $100 dollars a year per vehicle that a dealer is getting, nothing exact. Now let’s say Toyota gave all recalled vehicles one oil change for 8 million vehicles . That’s only $256,000,000. Now let’s say Toyota gave everyone one year of free oil changes to every effected vehicle to say sorry. That’s only $768,000,000 million. See where this is going? You will have dealerships going out of business. This is a major source of income for the dealerships. How do think this would play out with 1/3 less dealers?
I hear ya Benny. I suppose a free water bottle and chocolate is good enough?
Mickey – California, and it could be linked to NUMMI. My guess is that it’s a good way to raise your profile in an election year.
mk – I’ve seen data that shows sales are up nationwide more than 30% over last year. The link below says 50%. I’ve been talking to dealers about it too and sales are good.
Benny – The case doesn’t actually have to be “legit” since it’s civil court. It’s perfectly legal to file a frivolous lawsuit, but most people don’t do so because of the likelihood of a counter-suit. Since Toyota is highly unlikely to counter-sue Orange County, this could be a win-win situation for this D.A. If his suit is legit, he’s a hero. If his suit is just political, he can duck retribution. The trouble is, I’m guessing Toyota it trying to drown them all in a sea of paperwork right now…so this D.A. might have bitten off more than he could chew. We’ll see…As for sales figures and numbers, we’ll have to wait until the end of the month, but you’ll find this enlightening: http://abcnews.go.com/Business.....d=10076776
Class action is ridiculous, lawyers make all the money. There would be more money if the lawsuits were filed individually.
Chosuke – That’s certainly true, but that’s also not very likely.
Jason as far as I know regulatory authority does not supercede tort or criminal cases. However, someone did say just because you file a lawsuit doesn’t mean you have a solid case…I totally agree with that. Intentional can lead to criminal and here’s where this thing could get interesting. If Toyota admits they intentionally did something that cost someone their life then you can bet the feds will file criminal charges. That’s why I feel Toyota will never come clean. At this point, there more at stake than just money.
I’ll agree that even though it’s not likely, it would still be more rewarding for people. Toyota is better off having all those people sueing as a group rather than dealing with numerous individuals. I imagine there will be many under table dealings going on to keep things off the front page, just as in the past. They will pay more under table than on the table but the results for them are better in the long run. Imagine if you seen the headlines that announced the findings against them, would you be more likely to sue for your self than if you never knew there was a settlement?
Rich – Good point. I think that NHTSA, however, might have a monopoly on penalizing automakers on behalf of U.S. consumers…but I don’t know that for sure. Generally speaking, however, you are absolutely correct – the presence of a regulatory authority doesn’t preclude a civil lawsuit. So, you’re probably right about the NHTSA thing…but I’m not convinced because of something I read. Anyways…
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As far as criminal charges, I’ve heard that mentioned before, but it’s highly unlikely. Not only would it be pointless (some low-level guy would likely take the fall), but it would be difficult to prove “beyond a reasonable doubt.” In civil courts, however, the threshold required to prove malicious intent is much lower, and therefore it’s likely that Toyota could lose money as a result of the Orange County D.A.’s suit…provided that Toyota doesn’t manage to have the lawsuit dismissed of course (cause of the whole NHTSA thing).
Chosuke – Yes that’s a good point too. Class-action is easier to defend. However, don’t forget that individuals have the right to opt-out of the settlement on their own if they feel they can do better.
Jason, I didn’t realize someone could opt out.