Toyota Motor Corp. won dismissal of 26 of 33 claims in a stockholder lawsuit over alleged sudden unintended-acceleration problems leading to a 20 percent drop in the carmaker’s shares in January and February of last year.
The suit raised claims under Japanese securities law, over which the U.S. court didn’t have original jurisdiction, U.S. District Judge Dale Fischer in Los Angeles ruled in an 11-page memorandum dated July 7. Those claims involve investors who purchased their stock on foreign exchanges, Fischer said.
Respect for foreign law “would be completely subverted if foreign claims were allowed to be piggybacked into virtually every American securities fraud case,” the judge wrote.
The investors, led by the Maryland State Retirement and Pension System, said in their complaint that internal documents show the Toyota City, Japan-based company, Asia’s largest carmaker, deliberately hid the acceleration problems and knew about defects as early as 2000.
“We are pleased that the court has granted Toyota’s motion to dismiss most of the claims in the federal securities case,” Celeste Migliore, a Toyota spokeswoman, said in an e-mail. The company believes it’s important that the judge rejected the shareholders “attempted end-run around” a Supreme Court decision to pursue claims under Japanese law, she said.
The judge allowed the case to proceed on seven of the 33 misrepresentations Toyota is alleged to have made to investors about the sudden-acceleration problems.
“We respect the judge’s decision, but we plan to move forward and collect significant damages,” David Paulson, a spokesman for Maryland Attorney General Douglas F. Gansler, who represents the retirement system, said in a telephone interview.
The case is In re Toyota Motor Corp. Securities Litigation, 10-00922, U.S. District Court, Central District of California (Los Angeles)