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US DOT to impose record civil fine on Toyota for safety defect reporting delay

By Bernard Hibbitts (editor) and University of Pittsburgh School of Law students.

[JURIST] The National Highway Traffic Safety Administration (NHTSA) will seek a record civil penalty of $16.375 million against Toyota Motor Corporation for a four-month delay in notifying the agency about a problem with "sticky" gas pedals in various car models, US Department of Transportation Secretary Ray LaHood announced Monday. The fine, which would become the largest ever assessed against a car maker, was announced based on a preliminary review of extensive corporate documents attained through an investigation launched by the NHTSA in February. Toyota will have two weeks to appeal the fine, but, if further defect-related violations are discovered, the NHTSA may increase the fine. NHTSA statutes require that a vehicle manufacturer notify the NHTSA within five days of discovering a safety defect and launch a recall. The NHTSA has evidence that Toyota knew of the defect in late September, but notification and a recall were not launched until January. Toyota has been under federal scrutiny since December, and has conducted three recalls. The automaker has recalled more than eight million vehicles and is facing hundreds of private lawsuits. In March, the NHTSA enlisted the help of the National Academy of Sciences (NAS) and NASA to conduct a 15-month investigation into the sources of recent safety defects. The agency has faced a hearing before the House of Representatives Committee on Energy and Commerce and strong criticism regarding the effectiveness of its recent investigations into car safety defects. Previously, the largest fine assessed by the NHTSA was of $1 million against General Motors for failing to conduct a timely recall in 2004. At the time, the NHTSA was also criticized for appearing to be lenient on the American vehicle manufacturer.

Full post as published by JURIST - The Paper Chase on April 06, 2010 (boomark / email).