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Toyota agrees to fund a settlement valued up to $1.4 billion for unintended acceleration cases

27 December 2012

Toyota has agreed to a settlement valued between $1.2 and $1.4 billion in a class action suit by Toyota vehicle owners who claim that their vehicles are prone to sudden, unexplained acceleration. The estimated settlement is the largest of this type in US history in terms of dollars paid out and number of vehicles involved. The settlement includes direct payments to consumers as well as the installation of a brake-override system in an estimated 3.25 million vehicles.

The case was filed in 2010 after drivers across the country began reporting that Toyota vehicles suddenly and unintentionally accelerated. Toyota has long maintained that the vehicles were free from electronic flaws causing the acceleration.

Neither the National Highway Traffic Safety Administration (NHTSA), nor the National Aeronautics and Space Administration (NASA) was able to find any defects in Toyota’s source code that could cause these events.

After a flurry of lawsuits were filed against Toyota, Judge James Selna consolidated the cases (Case Nº 8:10-ml-02151-JVS-FMO) in US District Court in California and appointed attorney Steve Berman, managing partner of Hagens Berman Sobol Shapiro as co-lead counsel on 14 May 2010, placing Berman in charge of directing the class litigation and leading settlement discussions with the Japanese auto manufacturer.

After two years of intense work, including deposing hundreds of engineers, pouring over thousands of documents and examining millions of lines of software code, we are pleased that Toyota has agreed to a settlement that was both extraordinarily hard-fought and is exceptionally far-reaching.

—Steve Berman

Terms of the proposed settlement include:

  • Toyota will install a brake-override system in vehicles subject to floor mat entrapment recalls. Brake-override systems cut power to the throttle under certain circumstances when the car receives simultaneous signals to accelerate and to stop.

  • The settlement establishes a fund of $250 million to be paid to former Toyota owners who sold their cars during the period from 1 Sept. 2009 through 31 Dec. 2010, to compensate those owners for an alleged reduced value as a result of publicity concerning unintended acceleration.

  • A separate fund of $250 million will be established to compensate current owners whose vehicles are not eligible for a brake-override system (BOS). The amount consumers receive depends on the model and year of their Toyota, and the state in which the car was purchased.

  • The settlement also provides that all 16 million current owners will be eligible for a customer care plan that will warranty certain parts that plaintiffs allege are tied to unintended acceleration for between three and 10 years.

  • The agreement also provides $30 million in education grants to independent academic institutions to further the study of auto safety and to enhance driver education.

Judge Selna is expected to review the proposed settlement on 28 December 2012, and if he agrees with its fairness, will grant preliminary approval. More information on the details will be available if the court gives preliminary approval to the settlement.

Current and former Toyota owners will receive information about the settlement and instructions on filing a claim in the coming months.

In a statement, Christopher P. Reynolds, Group Vice President and General Counsel, Toyota Motor Sales, U.S.A, and Chief Legal Officer, Toyota Motor North America, said:

This agreement marks a significant step forward for our company, one that will enable us to put more of our energy, time and resources into Toyota’s central focus: making the best vehicles we can for our customers and doing everything we can to meet their needs.

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. 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.

Toyota will take a one-time, $1.1 billion pre-tax charge against earnings to cover the estimated costs of the economic loss settlement and possible resolution costs of civil litigation brought in California by the District Attorney of Orange County and an investigation by a multi-state group of Attorneys General stemming from previous recalls.

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December 27, 2012 in Market Background, Safety, Vehicle Manufacturers | Permalink | Comments (19) | TrackBack (0)

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"Neither the National Highway Traffic Safety Administration (NHTSA), nor the National Aeronautics and Space Administration (NASA) was able to find any defects in Toyota’s source code that could cause these events." = $1.4 billion fine.

Meanwhile, the Feds are too corrupt to properly budget our government or defend the Constitution, but they sure took code, fined the unproven, and cashed their unearned checks, benefits, lobbyist perks, and "contributions".

Kelly,

The fact that NHTSA and NASA did not find code problems is a long way from proving that there are or were not code problems that had a low probability of occurring. I am sure most of the problems were either rug related (which was not a design that Toyota should be proud of) or driver error but some of the occurrences could not be easily explained. As I explained once before, NASA did not find the code problems with Apollo 11 and neither did I although at the time it was my job to test the code on the lunar lander simulator at the MIT Instrumentation Lab. The Instrumentation Lab (later renamed Draper Lab) was the prime contractor for the Apollo guidance system. Anyway, this code was at least 1000 times simpler that the code in a typical modern car. If you wish to read more about the Apollo software problems, type TALES FROM THE LUNAR MODULE GUIDANCE COMPUTER into a google search. The people responsible for this code were some of the smartest people I have know.

Anyway, it is not smart to design a vehicle that does not have a way to easily kill the engine when the brakes will not overpower the engine. On old cars before anti-lock brakes, you could stomp the brakes and lock the drive wheels but not anymore.

I am currently working on a relatively slow speed Ag machine that is all drive-by-wire including the steering so I am not completely unknowlegable on the subject. We have a number of kill switches on the vehicle that will completely kill all drive functions.

Also, this was a $1.2-1.4 billion was a legal settlement not a fine.

Sorry sd - kelly is absolutely correct on this one.

I agree with Kelly. Suing for money has become widespread in this country

Toyota is making most reliable cars and if somebody has to be sued that is GM. (I repaired GM cars and know what I am talking about). I own Prius 2001 for 9 years, bought it with 13k miles, now 169k and I never did any repair to it just regular maintenance and changed traction battery. I never even had to replace break pads still original with about 30% pads left. Fuel consumption went up from about 48mi/g to 42-45mi/g which is still very good for that mileage. Plan to buy Prius again, this time plug-in.

I was not implying that I am a fan of our litigious society or in favor of class action lawsuits. I would seriously favor some form of tort reform. I was trying to point out that having NHTSA or NASA not find code problems does not mean that they do not exist. When you have multiple processes occurring simultaneously, there are often very small windows of opportunity for unexpected results. It is extremely difficult to test for all possibilities.

I have not followed Toyotas UA (Unintended Acceleration) fiasco very closely but as I recall (no pun intended), the ON - OFF buttons on "keyless" cars require more than just a quick tap to turn the car OFF (and maybe the Camry and Prius require a bit longer push than others?).

However some of the UA "killer cars" had typical ignition keys which, like everything else in the car, worked perfectly (to turn the car OFF) after the alleged event.

There was some suggestions that if the car DID stick at WOT and driver did nothing but apply the brake moderately to limit speed, the vacuum in the brake booster could soon run out and the brakes could fade.

I think Toyota might have originally sought to duck or limit their responsibility by implicating the carpet and the throttle pedal instead of admitting they sold cars to people that should not be allowed outside without professional supervision.

The "killer Audi" of the late1980s, was a case of driver error (pedal misapplication) aggravated by CBS 60 Minutes footage of an Audi 5000 they had secretly modified to “mimic” unintended acceleration.ALL autos now provide enough distance between the brake and throttle and require press the brake pedal before shifting out of park.

Litigation, unrehabilitated tort and sleazy “news” are legitimate concerns.

sd has a valid point - but I would point out that many of us work with software and having NASA not find cheese on the surface does not mean that the center of the moon is not solid cheddar.

The whole episode looks rather fishy and looks like a legal scheme to black mail/rob Toyota out of $1.1B.

What a great democracy we have?

My point is that over a thousand million dollars ($1.1B) changing hands should require concrete proof.

Government Motors resented Toyota developing a 'double their mileage' hybrid car and becoming the world's biggest and best automaker.

GM and oil may have tried stopping the hybrid/electric MPG improvement surge with every pre/post bailout dollar they could politically buy, but that is not engineering or legal proof - just corporate DNA in typical ongoing corrupt activity.

What does "millions of lines of software code" mean"

Do they mean "in the controller" or does it include auto-code code, compilers, SVCP code etc?

sd may have a really good point; "having NHTSA or NASA not find code problems does not mean that they do not exist."

Still we all appear to agree that this is very unfair to Toyota; but it is risky to fight the media - most of which are tabloid class.

I see a silver lining behind this $1.1 B dark cloud:

--That computers are not to be trusted and must always be backed up by a human being. A lesson for those who are making autonomously-driven vehicles. There would be 100x-1000x more computer codes than the simple engine computer, plus cameras and sensors...just imagine the potential for litigation!!!

--That anything that is dependent on a computer must have double to triple redundancy, preferrably by a human within the loop, for example, to push on the brake pedal that is wired to shut off the fuel supply to the engine.

One small step backward for Toyota...a giant leap forward for humanity!!!

Yes RP...more redundancy and automatic and/or emergency cut off mechanism will probably be incorporated into future autonomously-driven vehicles.

Multiple future, very powerful, very fast, very light, low cost micro-computers and sensors will be used to multiply performance and safety well beyond the often imperfect, limited, easily distracted/impaired human brain.

I doubt that human back up will be required for more than 10 to 15 years. Highways could have a dedicated lane (or side roads) for human 'no so perfect' drivers?

Sooner or latter, USA will have to legislate limits to what 'not so honest' lawyers can 'black mail' individuals and organisations for. The $75,000/passenger used in civil aviation is a good example to follow. However, it could be updated with increase in cost of living?

Irrespective of any Science or Engineering, the Lawyers ALWAYS get their one third...

"Sooner or latter, USA will have to legislate limits to what 'not so honest' lawyers can 'black mail' individuals and organisations for. The $75,000/passenger used in civil aviation is a good example to follow. However, it could be updated with increase in cost of living?"

Remember that legislators are mostly lawyers with friends and supporters who are trial lawywers. Good luck!

Concidering most of the money is to put in the override and pay people who cant get it... id say they knew full well they would have to do that part anyway no matter what. Now what toyota has to do is find out what causes it and if its a part tghey didnt make sue whoever made it to recover thier costs.

RP...whenever a group, may they be the !% or 3%, lawyers or others go too far, legislators have the obligation and duty to do whatever is required to put an end to it. Legislators have but one single tool...i.e. to legislate to correct what has gone astray. Failing to do that is to betray the people who voted them in.

I thought that NASA had found problems with "tin whiskers." These created shorts in the drive-by-wire throttle. Not a "software problem" granted, but a real problem nonetheless.

There are several other issues that fall squarely on Toyota's shoulders:
- Braking systems that do not have enough safety margin. Drivers would gently touch the brakes when their cars sped-up. By the time they noticed that the car wasn't slowing-down, the brakes had over-heated and were no longer effective.
- A bad/confusing UI for their keyless start system. There was no obvious way for drivers to stop the engine. Pressing the Start button for 10 seconds isn't obvious, nor is it even doable if you need both hands to wrestle your car through traffic at crazy speeds.
- Lack of software error handling. The car knew that it was going 90+mph with full brakes. That should trigger a "safe mode".

I think that Toyota reviewed these facts and decided to settle. A billion four is cheap compared to what they would have paid in a jury trial, and they got to minimize the bad publicity. Toyota remembers the Pinto gas tank issues. They don't to have want expert witnesses explain how dangerous their cars are, day after day, for months on end. They would have lost billions in sales even if they "won."

" Drivers would gently touch the brakes when their cars sped-up. By the time they noticed that the car wasn't slowing-down, the brakes had over-heated and were no longer effective."

Not buying that one. You can ride your brakes quite a bit before you heat brake fluid to boiling. Only then do you loose braking ability.

" Lack of software error handling. The car knew that it was going 90+mph with full brakes. That should trigger a "safe mode"."

This is the change that Toyota needed to make in their system. As I understand it they have added this feature which was lacking. And because it was lacking they likely decided that it would cost too much to litigate the trials and settling was cheaper. And it got the bad publicity behind them.

I believe the actual injury and death cases were not part of the settlement.

Bob,

Passenger car brakes are designed to work efficiently from a very low temperature, unlike "race compound" pads that need to be warmed-up.
The reasons for this are obvious, you want your brakes to work right away, even when it's cold out.
The downside is that the maximum temp at which the brakes work efficiently is lower. The pad material just doesn't have as much friction at high temps, and it may actually "outgas," which creates a layer of pressurized gas between the pads and rotors.

Toyotas tend to have very lightweight brake rotors and small pads. That's not usually a problem. People don't do two panic stops in a row. The Prius has especially lightweigth aluminum brake components, and it can't use energy recovery when the battery is topped-up (which would happen quickly in a runaway situation).

One other issue that would come-up in court (even if it wasn't relevant) is that Toyota products tend to score mid-pack or worse in crash tests. Any good lawyer would mention this in order to establish a pattern of negligence and penny-pinching.

None of these facts/allegations are damning, and most are "within industry standards," but it's very clear to me why Toyota would rather cut a check than take their chances in court.

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