Toyota recall: landmark settlement may cover up to 22 million owners

Toyota-Recall

In what could be one of the last chapters in the infamous Toyota recall saga, a federal judge will decide whether or not he will grant final approval to a class-action settlement concerning the unintended acceleration cases, which may cover up to 22 million (registered) owners. A “fairness hearing” will be conducted on June 14 in California by U.S. District Judge James Selna.

The settlement, which may be decided upon next month, may be valued as much as $1.63 billion dollars.

According to a lawyer for the owners, Steve Berman, this could very well be “a landmark, if not a record, settlement in automobile defects class action litigation in the United States”.  Preliminary notices have already been sent out to the affected owners, detailing the progress and the approximate settlement date of the case. Generally speaking, no action will be required on the owner’s part, except the option to opt of the settlement.

Part of the massive settlement includes:

$30 million – Automobile safety research and education fund

$14.2 million – Campaign for driver education media

$15 million – Research for future active safety features

$800,000 – To conduct a consumer study on defense driving, as well as proper use of vehicle safety systems

Although Toyota is formally defending the agreement, citing (according to their spokesperson Celeste Migliore) that “this agreement is structured in ways that we believe provide real value to our customers and demonstrate that they can count on Toyota to stand behind our vehicles. We believe that approval of this settlement is in the best interests of all affected parties,” some safety advocates are objecting to the plan.

This settlement “would pursue long-discredited approaches for changing the behavior of drivers, rather than the safety performance levels of vehicles ‘rendered unsafe,” according to Benjamin Kelley, formerly with the Insurance Institute of Highway Safety (IIHS, in the capacity of being a U.S. auto safety and vice president). He further went on to say that “somehow ‘educating’ drivers will solve the problems brought on by Toyota’s misbehavior. Moreover, Clarence Ditlow has stated that it is “far better to cure unintended acceleration rather than targeting the symptoms of unintended acceleration.” The executive director for the Center for Auto Safety went on to say that he would like the research program to focus on “underlying issues of failures in electronic systems and controls in modern research.”

Currently, the opposing sides are placing the blame on different conclusions; lawyers for the plaintiffs are blaming the electronic devices in the vehicles for the accidents and injuries/fatalities as a result of the unintended acceleration. This has been backed up by Sen. Chuck Grassley (R-IA), who has called for the National Highway Traffic Safety Administration (NHTSA) to re-open the investigation, citing that the findings reached by the NHTSA were inconclusive.

Conversely, executives from Toyota are using the same investigation findings as evidence that driver error was to blame, with the NHTSA Administrator David Strickland validating the investigation as well. There hasn’t been any significant progress as to whether or not the investigation will be re-opened, and the evidence/reports will be re-examined, or if further investigations from independent sources (NASA conducted the last independent investigation) with be conducted.

Part of the $30 million fund will go to research at five different universities, including the University of Michigan. Berman stated that the program “will significantly advance vehicle and driver safety”.

The intent of the three-year project, which will be conducted at the University of Michigan’s Transportation Research Institute,  is to “provide new knowledge, models, and tools to enable improved designs of automotive crash avoidance systems and more effective deployment strategies.”

The payout from the settlement will include:

$200 million – Lawyers fees that Toyota will pay out to the owners

$27 million – Court costs

Roughly nine million owners are eligible for compensation, with payouts ranging from $37.50 to $125. Any money that is not claimed by the owners will go towards additional funding for the research at the participating schools.

This Toyota recall settlement does not include the wrongful death lawsuits currently pending against the Japanese automaker.

 

News Source: The Detroit News

 

 

 

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