Toyota Motor Corp. (TM) has settled a lawsuit filed by relatives of a family killed in a car crash in August last year that triggered the largest-ever global recall of vehicles by the company.
The high-speed crash involved a 2009 Lexus ES350 that killed a California Highway Patrol officer and three members of his family near San Diego. Investigators with the National Highway Traffic Safety Administration had found out a rubber all-weather floor mat in the wreckage that was slightly longer than the mat and could have covered the accelerator pedal.
Later, the U.S. Government had revealed at least five deaths and two injuries to floor mat-related acceleration in the Toyota vehicles. In fact, the U.S. government had observed cases of more than 100 incidents in which the accelerator had possibly become stuck.
Toyota reacted by recalling 3.8 million vehicles in order to address problems with sudden acceleration in some of its U.S. models by replacing the gas pedals. The recall involved popular vehicles such as the Toyota Camry (2007–10 model year) — the top-selling passenger car in the U.S., and the Toyota Prius (2004–09) — the best-selling gas-electric hybrid, apart from Toyota Avalon (2005–10), Toyota Tacoma (2005–10), Toyota Tundra (2007–10) and Lexus (2007–10 ES350 and 2006–10 IS250/350).
Toyota has not disclosed the terms of the out-of-court settlement with relatives of the families. The settlement resolved product liability claims by the Saylor and Lastrella families against Toyota and the dealership, Bob Baker Lexus.
However, the settlement left out the co-defendant, Bob Baker Lexus. The California Highway Patrol officer, Mark Saylor, had borrowed the Lexus from the dealership. The lawsuit against the dealership had not been dropped and the families have separate claims against it.
Since September last year, Toyota has recalled about 11 million vehicles globally related to problems such as faulty accelerator gas pedals, slipping floor mats and defective braking systems.
The automaker still faces numerous personal injury and wrongful death lawsuits in federal courts due to their defective vehicles. The value of claims under the lawsuits has been estimated to reach about $4 billion.
The U.S. government has also imposed the highest-ever fine of $16.4 million on Toyota this year, accusing it of a deliberate delay in recalling the vehicles by hiding its flaws even though manufacturers are legally obligated to notify the U.S. safety regulators within five business days once they come to know of a safety defect.
TOYOTA MOTOR CP (TM): Free Stock Analysis Report
Zacks Investment Research
