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Toyota to Begin Settlement Talks Over Sudden Acceleration

Toyota Motor Corp. (7203) and lawyers pursuing claims alleging the company’s vehicles suddenly accelerated, causing deaths or injuries, will begin an “intensive settlement process” to resolve the lawsuits, a judge said.

U.S. District Judge James V. Selna in Santa Ana, California, yesterday issued an order halting the suits after Toyota and the lawyers asked for time to try settling the cases. Selna was scheduled to hear the first trial in March of about 200 federal claims consolidated before him.

“Participation in the intensive settlement process is open to all plaintiffs,” Selna said in the order. “Cases that do not resolve during the initial settlement conference shall be set for a formal mediation.”

The move toward settlement comes less than two months after Toyota lost its first trial in a lawsuit claiming an electronic defect can cause its vehicles to speed up uncontrollably. Toyota settled after an Oklahoma City jury ordered the company to pay $3 million.

Selna set a hearing for Jan. 14 for any comment on the settlement process. Settlement conferences would begin in February, he said.

The carmaker recalled more than 10 million vehicles for problems related to unintended acceleration in 2009 and 2010, starting with a September 2009 announcement that it was recalling 3.8 million Toyota and Lexus vehicles because of a defect that might cause floor mats to jam accelerator pedals. The company later recalled vehicles over defects involving the pedals themselves.

Economic Loss

The recalls led to lawsuits claiming that defects harmed the value of Toyota vehicles or caused accidents leading to death and injury. Toyota settled suits brought by car owners who claimed economic losses for about $1.6 billion.

Carly Schaffner, a spokeswoman for the Toyota City, Japan-based automaker, didn’t immediately respond to a call and e-mail seeking comment on settlement talks.

Toyota won the first three sudden-acceleration claims that reached jury verdicts after the recalls, before losing in Oklahoma City. The defense verdicts include injury cases in New York in 2011 and in Philadelphia in June. A Los Angeles jury in October cleared Toyota of fault for the death of a 66-year-old woman.

In many of the death and injury lawsuits, including the one in Oklahoma City, plaintiffs claim that loose floor mats and sticky pedals don’t explain all episodes of sudden acceleration and fault the electronic throttle control system.

Accelerator Sensor

Lawyers suing Toyota say that reports of unintended acceleration increased after Toyota began equipping vehicles with its ETCS-i system, whereby the engine’s throttle is controlled electronically, not mechanically. Signals are sent from a sensor that detects how far the gas pedal is pressed to a computer module that opens and closes the throttle.

The federal 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 reporter on this story: Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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