Toyota to pay $1.1B in 'unintended acceleration' case

7:04 PM, Dec 26, 2012   |    comments
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(USA Today) -- Toyota announced a $1.1 billion settlement Wednesday to resolve lawsuits alleging "unintended acceleration," instances in which throttles jammed open.

As part of the settlement of the U.S. District Court case that was seeking class-action status, Toyota will create a fund for additional retrofitting of up to 3.2 million Toyota and Lexus cars with technology to make them easier to stop in a panic situation. For models that can't be retrofitted, there will be cash payouts to owners or former owners.

A Toyota spokesman says the company feels good about the settlement for having shown that the vast bulk of unintended acceleration cases were due to floor mats that jammed underneath accelerators, not because of electronic defects in the cars' engine computers. A jammed floor mat won't necessarily make the car go faster, but it can make it hard to stop because it keeps moving even when a foot is off the accelerator.

"We felt we achieved our objective, to defend the safety of the product," says spokesman Mike Michels. That having been done, the settlement is "a business decision and we turn the page on a lot of this."

Toyota says it is setting aside $1.1 billion for its costs to settle the lawsuits. Steve Berman, who was co-lead counsel for plaintiffs in the cases consolidated in Orange County, Calif., said in a statement that he believes the value of the settlement is between $1.2 billion and $1.4 billion.

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

The settlement comes about three years after the fatal crash of a Lexus that killed an off-duty California Highway Patrol officer and his family near San Diego erupted into a full-blown scandal for the automaker. At first, Toyota said only that floor mats could become trapped under acceleration pedals, giving drivers the impression that their cars were trying to run away on them. Then, held a series of worldwide recalls involving millions of cars, including one for potentially defective accelerator assemblies.

Toyota executives were called to congressional hearings about the issue. Last week, the National Highway Traffic Safety Administration levied a $17.35 million fine - the maximum currently allowed for a single violation - for waiting too long to report the issue that led to just one of the series of recalls, one involving 2010 Lexus RX 350 and RX 450h crossover SUVs.

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