Toyota, Plaintiffs’ Lawyers Close to Agreement on Evidence

Toyota Motor Corp. (7203) lawyers and attorneys for plaintiffs suing the automaker over claims of unintended sudden acceleration told a judge today they are close to resolving a major hurdle in pre-trial evidence-gathering.

Company attorneys said they have come up with a new concept for providing the plaintiffs’ attorneys access to Toyota’s secret source codes for the electronic throttle-control system, which the plaintiffs have said in court papers is critical to determining whether the system played a part in sudden acceleration.

The concept was described during the hearing by the lawyers as a technological procedure in which the plaintiffs’ experts will be able to analyze the source code while Toyota monitors the procedure in a way that satisfies the company’s security concerns. Both sides told the judge they were optimistic this would resolve a dispute that has lasted more than 2 1/2 months.

“This seems to be an infinitely better idea from a lot of aspects,” U.S. District Judge James V. Selna in Santa Ana, California, said at a hearing today. Selna, who has been pushing to have the first cases go to trial in early 2013, scheduled a March 22 hearing to approve the final form of the proposal and iron out any disagreements.

Hundreds of Cases

Selna is overseeing hundreds of cases coordinated in multidistrict litigation. The federal lawsuits against Toyota alleging economic loss, wrongful death or personal injury from sudden unintended acceleration were consolidated before him in April.

Toyota, the world’s largest automaker, recalled millions of U.S. vehicles last year and in 2009, most for defects related to unintended acceleration. It paid a record $48.8 million in fines for how some of the recalls were conducted. The carmaker, based in Toyota City, Japan, said last month that it’s recalling another 2.17 million vehicles in the U.S. for carpet and floor- mat flaws that could jam gas pedals.

Toyota has disputed any flaws in its electronic throttle control system. Last month, NASA, the U.S. space agency, and the National Highway Traffic Safety Administration said their probe of possible electronics defects found no causes for unintended acceleration other than sticking accelerator pedals and floor mats that jammed the pedals. Those were the causes Toyota had identified.

Access to the source code, which is the programming for the throttle system, has been described by the judge as one of the key issues to be resolved in order to bring the first cases to trial on schedule. The judge has ruled that the plaintiffs’ lawyers have a right to review the code to allow their experts to determine whether the system caused the acceleration problems.

Sufficient Safeguards

Toyota lawyers have said they want sufficient safeguards to prevent the codes, which are trade secrets, from becoming public and available to their competitors.

“The source code is probably the most important part of the science aspect of this case,” Mark Robinson, one of the lead plaintiffs’ attorneys told the judge today. Robinson described the new proposal as a “brilliant idea.”

“We apologize to the court for the time it has taken but we’ve been working very hard and there’s been no foot- dragging,” Joel Smith, a Toyota attorney, told the judge.

“We want to get these cases to trial,” said Smith, who described the technical problems of providing access to the source code as “a huge hurdle.” Smith told the judge the concept still needs to be approved by Toyota officials. “This has to be taken up a higher chain,” he said.

Crown Jewel

“Toyota’s source code is the crown jewel of the company’s intellectual property and deserves the highest levels of protection and oversight during discovery,” Celeste Migliore, a Toyota spokeswoman, said in an e-mailed statement. “The plaintiffs’ convenience should not outweigh Toyota’s ability to rigorously guard the confidentiality of this code.”

“Toyota, in good faith, has continued to work with plaintiffs’ attorneys to address their concerns while maintaining necessary security for the source code and ensuring these cases can get to trial,” she said.

Selna has at several previous hearings pushed both sides to reach agreements over this matter.

“We’ve got to come to a resolution,” he said today. “This has to happen so we can move on. I take Toyota at its word that it wants to get these cases to trial and I know the plaintiffs want to do so, also.”

The cases are combined as In re Toyota Motor Corp. Unintended Acceleration Marketing, Sales Practices and Products Liability Litigation, 8:10-ml-02151, U.S. District Court, Central District of California (Santa Ana).

To contact the reporters on this story: Bill Callahan in San Diego at callahan@san.rr.com; Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

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