LOS ANGELES: Toyota Motor Corp. said Wednesday it has reached a settlement worth more than $1 billion in a case involving hundreds of lawsuits over acceleration problems in its vehicles.
The company said in a statement that the deal will resolve cases involving motorists who said the value of their vehicles plummeted after a series of recalls by the Japanese automaker stemming from claims of sudden acceleration defects.
Lawyer Steve Berman, a plaintiffs’ attorney, said the settlement is the largest settlement in U.S. history involving automobile defects.
“We kept fighting and fighting and we secured what we think was a good settlement given the risks of this litigation,” Berman said.
The proposed deal was filed Wednesday and must receive the approval of U.S. District Judge James Selna, who was expected to review the settlement Friday.
Berman said the total value of the deal is between $1.2 billion and $1.4 billion. Toyota said it will take a one-time, $1.1 billion pre-tax charge against earnings to cover the estimated costs of the settlement.
The case was filed two years ago and divided into two categories: economic loss and wrongful death. Claims by people who seek compensation for injury and death due to sudden acceleration are not part of the settlement.
The first trial involving those suits is scheduled for February.
As part of the economic loss settlement, Toyota said it will offer cash payments to eligible customers who sold vehicles or turned in leased vehicles between September 2009 and December 2010.
The company also will launch a program for 16 million current owners to provide supplemental warranty coverage for certain vehicle components, and it will retrofit about 3.2 million vehicles with a brake override system. An override system is designed to ensure a car will stop when the brakes are applied, even if the accelerator pedal is depressed.
The settlement would also establish additional driver education programs and fund research into advanced safety technologies.
After a fiery crash of a Lexus, Toyota’s luxury brand, took four lives near San Diego in August 2009, the National Highway Traffic Safety Administration concluded that floor mats could entrap pedals in Toyota vehicles, leading the automaker to issue its recall.
Toyota has recalled more than 14 million vehicles worldwide due to acceleration problems in several models and brake defects with the Prius hybrid.
“This was a difficult decision — especially since reliable scientific evidence and multiple independent evaluations have confirmed the safety of Toyota’s electronic throttle control systems,” Christopher P. Reynolds, Toyota Motor North America’s chief legal officer, said in a statement. “However, we concluded that turning the page on this legacy legal issue through the positive steps we are taking is in the best interests of the company, our employees, our dealers and, most of all, our customers.”
Details of the settlement are available at www.toyotaelsettlement.com or by calling 877-283-0507. The Los Angeles Times contributed to this report.
