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Toyota accepts record $16 million fine for safety reporting delay

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

[JURIST] Toyota Motor Corporation on Monday accepted a record civil penalty of $16.375 million imposed by the National Highway Traffic Safety Administration (NHTSA) for a four-month delay in notifying the agency about a problem with "sticky" and "slow to return pedal" gas pedals in various car models. US Department of Transportation Secretary Ray LaHood announced that Toyota has acknowledged responsibility for violating its legal obligations to report any defects promptly. The fine, the largest ever assessed against a car maker, is based on a preliminary review of extensive corporate documents attained through an investigation launched by the NHTSA in February. Toyota declined to appeal the fine, and, if further defect-related violations are discovered, the NHTSA may increase the penalty. 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. Earlier this month, the US Judicial Panel on Multi-District Litigation (MDL) consolidated more than 150 pending lawsuits against Toyota and transferred them to the US District Court for the Central District of California where Judge James Selna ordered a May 13 pre-trial conference. 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. Toyota has been under federal scrutiny since December 2009, and has conducted three recalls.

Full post as published by JURIST - The Paper Chase on April 19, 2010 (boomark / email).