Legal News

Internal Toyota Document Could Become Smoking Gun

By Nathan Koppel

Does the Toyota acceleration matter have its first smoking-gun document?

The U.S. House Oversight and Government Reform Committee, which is investigating the Toyota recalls and plans to hold a hearing Wednesday, has obtained a document from a Toyota executive, which may have some plaintiffs' lawyers licking their chops.

The document, from an internal presentation in July 2009 by Yoshimi Inaba, chief of the Japanese auto maker’s North America operations, notes that Toytoa saved money by lobbying federal officials to limit recalls tied to sudden-acceleration complaints, characterizing the lobbying effort as a key company achievement in 2009. Here's a WSJ article about the document.

Inaba said that Toyota saved more than $100 million by negotiating an agreement with U.S. safety regulators that led to a limited “equipment” recall of Camry and Lexus ES350 vehicles. “Saved 100M+, w/no defect found,” the document states under a section labeled “Wins For Toyota-Safety Group.”

The company blamed incidents on floor mats, instead of a potentially more costly defect with the car itself. The power point also lists among “wins” the National Highway Traffic Safety Administration’s decision to close safety investigations of the Toyota Tacoma truck without ordering recalls, and delays to new safety rules that saved the company hundreds of millions of dollars.

Toyota has since recalled about 6 million U.S. vehicles for sudden-acceleration and gas-pedal problems.

Inaba is scheduled to testify before the House Oversight committee, along with Toyota President Akio Toyoda.

Plaintiffs' lawyers have already made noise about how they will try to portray Toyota as putting profits over safety, possibly in support of a claim for punitivce damages. It's too early, of course, to say whether this document would bolster such a claim or whether it would ever even be admissible in a case.

A spokesman for California Rep. Darrell Issa, the senior Republican on the House Oversight committee, said the document raises questions about how Toyota responded to years of concerns of sudden acceleration of vehicles.

There are questions "whether Toyota was lobbying for less rigid actions from regulators to protect their bottom-line,” said spokesman, Kurt Bardella. “If anything but the safety of America’s drivers influenced the decision-making process, the entire purpose of NHTSA will be undermined.”

Olivia Alair, a Transportation Department spokeswoman, all called the document “very telling.”
“It’s the responsibility of auto makers to come forward when there is a problem,” she said.

But Toyota said in a statement: “Our first priority is the safety of our customers and to conclude otherwise on the basis of one internal presentation is wrong.”

Full post as published by Law Blog - WSJ.com on February 22, 2010 (boomark / email).