Toyota ‘deliberately withheld’ evidence in safety lawsuits, House panel says

Toyota Motor Corp. “deliberately withheld” evidence in lawsuits related to vehicle safety, exhibiting a “systematic disregard for the law,” the chairman of a congressional committee said.

The firm created “secret electronic ‘Books of Knowledge’ ” that included information about design problems, yet never disclosed their existence in lawsuits, according to internal company documents released by the committee Friday.

The allegations, made by Rep. Edolphus Towns (D-N.Y.), who heads the House Oversight and Government Reform Committee, came two days after Toyota’s chief executive appeared before Congress to apologize for the automaker’s handling of the sudden acceleration issue.

In a three-page letter sent to Yoshimi Inaba, Toyota’s top official in the U.S., Towns details a review of company documents that the committee obtained from Dimitrios Biller of Pacific Palisades, a former Toyota lawyer who handled product liability lawsuits. The committee subpoenaed some 6,000 documents from Biller last week.

“We have to get to the bottom of this,” Towns said in an interview. “It is a situation that is just not going to go away if we ignore it.”

Toyota said in a statement that it “takes its legal obligations seriously,” but that it’s not uncommon “for companies to object to certain demands for documents made in litigation.” The automaker said it is “confident that we have acted appropriately with respect to product liability litigation.”

Biller said he felt vindicated by the committee’s allegations. “I finally felt that justice was going to be done,” he said.

Towns alleged that the documents spell out a concerted plan to hide potentially damaging internal documents from plaintiffs’ lawyers in personal injury lawsuits, particularly in rollover cases, which were Biller’s specialty.

“People injured in crashes involving Toyota vehicles may have been injured a second time when Toyota failed to produce relevant evidence in court,” Towns wrote, demanding a response from Inaba by next Friday.

Towns’ letter to Inaba, who also testified before the Oversight committee Wednesday, alleges a willful pattern of hiding electronic records in litigation and questions whether that reflects a companywide attitude to compliance. Towns said he did not yet know whether he would call on Inaba to testify again.

The Biller documents, Towns said, raise a “very serious question as to whether Toyota has also withheld substantial relevant information” from the National Highway Traffic Safety Administration, which regulates auto safety.

A spokeswoman for the Department of Transportation, which oversees NHTSA, declined to comment.

Although most of the Biller documents focus on rollover cases rather than unintended acceleration, they do speak to the company’s handling of safety disclosures in general, and potentially lift a veil on what Rep. Eleanor Holmes Norton (D-D.C.) referred to as a “culture of secrecy” at Toyota.

Transportation Secretary Ray LaHood acknowledged that federal regulators have “had some issues” getting information from the company.

The documents had previously been protected from public distribution by courts at the request of Toyota, which has called them privileged. Biller, who worked at Toyota from 2003 to 2007, is embroiled in several lawsuits with the automaker and had been seeking the right to release the documents to the Los Angeles Times. Toyota has maintained that Biller is a disgruntled former employee and that disclosure of the documents would violate a severance agreement he signed with the company.

Four of the documents -- internal memos and e-mails from 2005 and 2006 -- were posted on the House Oversight committee website Friday afternoon, but were later taken down.

In an interview, Towns said he removed them because “we wanted to give Toyota a chance to respond. We want to give them time. I want to give them the benefit of the doubt.”

The documents portray a corporate culture that sought to withhold crucial safety information from opposing attorneys in liability cases, despite warnings from an in-house attorney that the company was violating U.S. legal procedures.

One memo, written by Biller to Eric Taira, another Toyota attorney, describes a failed attempt by Biller to produce evidence in vehicle rollover lawsuits. Toyota “did not want the information produced in litigation in the United States,” he wrote.

“Frankly, it is simply not acceptable for a . . . company with 30 billion yen sitting in the bank to not take action and devote the resources to fulfill its discovery obligations,” Biller wrote.

Though most of Biller’s work involved rollover cases, a 2005 document dealt with a lawsuit alleging that Toyota’s electronic throttle system could cause sudden acceleration. Another Toyota attorney wrote to Biller, saying the company had made seven software changes to address the problem.

“The bad news is that this is very difficult, if not impossible, to fix,” attorney Webster Burns wrote.

Toyota contends that the case in question did not deal with sudden acceleration.

In a 2006 e-mail, Biller explained to other Toyota lawyers that he was forced to settle a rollover suit involving paralysis for $1.5 million because “frankly, plaintiff’s discovery efforts . . . were getting too close to requiring [Toyota] to produce the ‘Books of Knowledge.’ ”

The plaintiff’s attorney in that case had petitioned a Texas court to sanction Toyota for contempt in the matter. Biller was to testify in that matter last week, but before he could take the stand, Toyota secured an emergency order from the Supreme Court of Texas blocking the testimony.