Fate of Toyota Suit in Local Judges' Hands

Many Toyota owners feel the recalls have slashed the value of their cars.

By Susan Taylor
|  Thursday, Mar 25, 2010  |  Updated 9:16 AM PDT
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More than 150 lawyers have gathered in San Diego to plot the course for thousands of Toyota owners who could one day be part of a huge lawsuit against the automaker.

A special panel of federal judges is being asked to consolidate before a single court dozens of proposed class-action lawsuits filed by Toyota owners who say the value of their vehicles has plummeted after millions were recalled for safety fixes.

The decision, expected in about two weeks by the seven-member U.S. Panel on Multidistrict Litigation, will set the stage for eventual trial or settlement of the roughly 100 cases filed nationwide, which could potentially cost Toyota billions of dollars in damages.

"Somebody is going to get this thing. It is going to be a ton of work," said attorney David R. Cohen of Cleveland, who has been appointed frequently as a "special master" to assist judges in similar cases.

The judge who is chosen will make several key decisions, including whether all Toyota owners affected by the recalls should be treated as a single class that could be paid for the vehicles' lost value. Toyota also is expected to ask for dismissal of the case.

Before that, however, the panel must decide where to send the lawsuits. Toyota favors Los Angeles federal court, near its U.S. headquarters in Torrance, but 18 other jurisdictions have been suggested including Florida, Kentucky, Ohio, New Jersey, and even Puerto Rico.

Los Angeles attorney Mark Geragos, best known for representing Michael Jackson and actress Winona Ryder, thinks the case will stay in California.  “If I were handicapping it, odds are Orange County is the most likely. Kentucky is a close second and Lousiana is in the mix.” he said.

He believes the Toyota lawsuits could set a new standard for corporate litigation. 

"This is probably the greatest opportunity to change, or at least expose, corporate malfeasance that I've seen in my lifetime," Geragos said. "It's going to be a lot of money, maybe. But you're going to be remembered for doing something."

“There are a lot of people affected by this including some of the judges,” Gerragos said. “This is going to be something that will happen rather quickly.”

 

The U.S. The National Highway Traffic Safety Administration has linked 52 deaths to the accelerator problems, including a family from San Diego's east county. Toyota is blaming floor mats for the sticky accelerators.  

Nineteen jurisdictions, including, New York, Florida and  California, which is home to Toyota's U.S. headquarters  are looking at class action status. Toyota is looking at losses in the billions of dollars.

The lawsuits have been popping up in court dockets nationwide following Toyota's recalls involving some 8 million vehicles, including about 6 million in the U.S. There are also separate lawsuits filed by crash victims and family members, as well as by investors who blame Toyota stock losses on the recalls.

Toyota, which declined comment before Thursday's hearing, has blamed the sudden acceleration problems on floor mats and accelerators that sometimes stick. Most of the owner lawsuits, however, trace the incidents to faulty electronic throttle controls that they say Toyota has been aware of and covered up for nearly a decade.

Toyota has repeatedly denied its electronics are the cause.

Similar lawsuits filed in different locations are frequently centralized in one place. Currently, about 92,000 lawsuits -- 48,000 of them involving cancer-causing asbestos -- have been consolidated by the Multidistrict Litigation panel before 240 federal judges, according to the panel's web site.

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