Legal News

Toyota?s Legal Troubles Likely to Accelerate

By Ashby Jones

There’s a long-needed dose of good news out Toyota on Friday: the company seems to have solved its accelerator problem.

If approval of the fix is received, production of the part could begin next week and dealers would receive it within the next two weeks, the company said.

But that doesn’t mean Toyota is out of the legal woods, writes the WSJ’s Nathan Koppel on Friday.

Koppel writes that plaintiffs’ lawyers across the county are fielding calls from consumers who complain that they have been injured-or fear they will be-by unintended acceleration in a range of Toyota vehicles.

“We are investigating a number of fatalities and various injuries across the country,” said Fabrice Vincent, a lawyer with San Francisco’s Lieff Cabraser, which has fielded about two dozen calls from Toyota owners.

A handful of very serious accidents have been blamed on the brake problems. Mostly, though, consumers are complaining about minor injuries or, more commonly, a fear that they might be injured, according to attorneys.

So where do damages come from? Koppel writes that many owners who haven’t been injured are still claiming that they have been damaged by a drop in the resale value of their Toyota and Lexus vehicles. Attorneys are jockeying to bring class actions on behalf of potentially thousands of such owners.

Consumers also will seek to recover the costs of securing alternate transportation while they await repairs for the problem, said California attorney Michael Louis Kelly.

A key issue, as it so often is with product malfunctions, is whether judges will allow plaintiffs’ lawyers to file suits as class actions, which could represent thousands of consumers.

But class certification won’t be a slam-dunk. Ssince consumer laws vary, plaintiffs’ lawyers may have trouble persuading judges to allow suits to be brought on behalf of a nationwide class, said Richard Nagareda, a professor at Vanderbilt University Law School. “Since it will be hard to represent a nationwide class,” he said, “I don’t think this litigation will be a big moneymaker for plaintiffs”

Still, the mere prospect that a judge would approve a class action, which could claim millions in damages, will likely prompt Toyota to consider settling suits, lawyers said.

“I expect that the company will quickly try to settle any cases that appear related to the \[acceleration\] problem,” said James Dorr, a Chicago attorney who defends product liability suits but isn’t involved in the Toyota litigation. “This will likely be a sizable financial issue for the company to sort out.”

Photo: AP

Full post as published by Law Blog - WSJ.com on January 29, 2010 (boomark / email).