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Toyota accelerator lawsuits go to US court
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Toyota accelerator lawsuits go to US court
AFP - Friday, March 26
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Toyota accelerator lawsuits go to US court
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SAN DIEGO, California (AFP) - – Toyota was Thursday to face a first US courtroom challenge as lawyers press for angry car owners to be able to bring a multi-billion-dollar suit against the Japanese automaker.
A group of law firms from 20 US states, dubbed the Toyota Action Consortium, is suing to recoup losses in the resale value of Toyota vehicles due to deaths and injuries blamed on accelerator pedal malfunctions.
Tim Howard, a Northeastern University law professor who is leading the charge against the world's biggest automaker, said the case could cost Toyota 40 billion dollars or more.
The suit does not take into account motorists who have been injured and is expected to be the largest legal battle of its kind against a single automaker.
"This is the worst malfeasance in the car industry since its inception in the 1890s," Howard said. "This is like Tiger Woods destroying his reputation."
The panel of federal judges hearing the case on Thursday will make no determination about the merit of the claims.
Instead, their role will be to decide whether the mushrooming cases can be grouped together in one specific courthouse and where.
The judges will not deliver their decision until about a week later, according to Jeffrey Luthi, clerk of the panel.
A spokesman from Toyota's US headquarters in Torrance, California headquarters, said: "We refuse to comment on pending litigation."
Toyota has enjoyed a stellar reputation as the world's top global auto seller and ranked among Forbes' leading companies.
But in recent months, Toyota has had to recall more than eight million vehicles worldwide due to problems with sudden acceleration, which have been blamed for 58 deaths.
"This is a problem everywhere for Toyota," Howard said. "People have lost thousands in value for doing nothing that was their fault."
In addition to a myriad of class-action lawsuits over plummeting car values, the consortium of lawyers has added new charges of racketeering under a federal law that was enacted in 1970 to bring down the mafia.
In civil litigation, the law can be used against an organization that knowingly conspired to commit fraud, and the consortium is alleging that Toyota knew their cars were faulty, but sold them anyway.
"Since 2002, Toyota has made more than 600 billion dollars in revenues and 25 billion dollars in operating profits from North American operations," the lawsuit states.
"Unlike any other automobile manufacturers operating in the United States, these sales and profits were built on a reputation for quality, reliability and resale value.
"But this reputation was an illusion: in reality, Toyota sales in recent years were actually based on a willful pattern of deceptive trade practices, fraud, breach of express and implied warranty, and racketeering."
Among the lawyers seeking to sue Toyota is W. Mark Lanier, a Houston lawyer who told the Los Angeles Times he has already found an ex-Toyota employee who will testify that the automaker "lies as a matter of strategy 'and he's got documents to back it up.'"
The attorneys claim the faulty pedal design was initiated in 2002 and to date, Toyota has done nothing to fix the problem.
Toyota first blamed the problems on faulty floor mats, adding shims to the accelerator pedal as a solution. But attorneys argue the problem still persists.
Toyota meanwhile Thursday announced the creation of a North American "quality task force" as it struggles to repair its reputation in the wake of the mass recalls.
The task force will answer to Toyota chief executive office Akio Toyoda, the grandson of the company's founder.
"We are making fundamental changes in the way our company operates in order to ensure that Toyota sets an even higher standard for vehicle safety and reliability, responsiveness to customers, and transparency with regulators," said Steve St. Angelo, a top executive at Toyota's North American manufacturing unit who was appointed chief quality officer for the region.
Toyota has fought claims that electronics problems are to blame for unintended acceleration problems and says that mechanical fixes it has developed are sufficient to make its vehicles safe.
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