Toyota settlement may set bar for sudden-acceleration payouts
For $10 million, Toyota Motor Corp. managed to resolve what was seen as one of the most serious legal challenges in company history.
Yet the amount, less than 1% of the titan’s last quarterly profit, could set the tone for the wave of litigation Toyota still faces after problems with sudden acceleration in its vehicles garnered worldwide attention.
The automaker agreed to pay the money, a figure disclosed Wednesday, to settle a lawsuit filed by the relatives of four people, including California Highway Patrol officer Mark Saylor, killed in a fiery crash near San Diego in August 2009.
The accident, captured on a chilling 911 phone call, set off a string of massive recalls, congressional investigations and federal fines, a series of events that experts said cost the world’s largest automaker far more than $10 million.
Citing disappointment that the amount was revealed, Toyota said in a statement that it had forged the deal with the families of Saylor; his wife, Cleofe Lastrella; their daughter, Mahala; and his brother-in-law Chris Lastrella so they could “move on from this difficult period.”
“We are disappointed that the amount of this settlement has now been made public against the express wishes of these families and Toyota,” the automaker said.
Toyota’s effort to prevent the amount from being made public — which was rejected this week by a Los Angeles County Superior Court judge — also speaks to its concern that the number could set a bar for the scores of other sudden-acceleration suits in state and federal court, lawyers said.
“Ten million dollars is a strong indication of admission of liability by Toyota,” said Edgar Heiskell, an attorney representing the family of a Michigan woman killed in a crash that they blame on sudden acceleration.
Heiskell and other attorneys with cases against the automaker said that similarly large amounts for their clients could be sought in trial, even though Superior Court Judge Anthony J. Mohr was emphatic in stating that it would not be admissible as evidence in other suits.
The settlement was disclosed in September but the amount was sealed under court order until Mohr removed the seal Monday. Larry Willis, attorney for a Lexus dealership that is also being sued in the Saylor case, disclosed the figure Wednesday.
Toyota, for its part, has said that the Saylor settlement was not an admission of liability.
Instead it has strongly suggested that the San Diego accident was the fault of Bob Baker Lexus, which lent the vehicle to Saylor the day of the crash.
“Mr. Baker now wants the amount publicized in an apparent effort to shift the focus away from his dealership as he continues to litigate this case,” Toyota said.
Its statement included detailed allegations, noting, for instance, the Lexus dealership installed the wrong floor mat in the sedan.
Baker’s lawyer countered that Toyota is at fault because of what he called defects with the Lexus ES, and suggested that the same questions would be raised in other courtrooms.
“We intend to show that there are problems with Toyota vehicles that would have prevented the wreck in the first place,” Willis said.
John Gomez, an attorney for the Saylor and the Lastrella families, said he was pleased with the settlement. But he also underscored the idea that the costs of further litigation could be far higher.
“It’s clear that at a trial, we’d have asked for a whole lot more than $10 million,” he said, adding that he now intends to be “more aggressive” in the case against Bob Baker Lexus.
He declined to put a number to the damages he would seek.
Despite the settlement, Gomez said that “Toyota had some responsibility” in the case and that many of the remaining suits against Toyota appeared to have merit. He said court verdicts could be much larger than $10 million.
Settlements in personal injury cases have run as high as $32 million in California. Jury verdicts have gone much higher. In 1999, a jury awarded $4.9 billion to six people burned in a crash involving a General Motors Corp. vehicle.
Toyota and the Saylor-Lastrella families had asked Mohr to seal the settlement amount on grounds that it could draw unwanted attention to the victims’ families, color the opinion of future juries and risk irreparable damage to the automaker’s reputation.
After rejecting their motion Monday, Mohr granted the parties 48 hours to seek an appeal.
“This case contains allegations against one of the world’s largest automakers, and there are a lot of people that drive its cars. What about their right to know?” Mohr said.
He reasoned that by the time any of the other pending cases got to trial, few potential jurors would remember the size of this settlement.
The Times and other media joined Baker Lexus in arguing that the details of the agreement should be disclosed.
“The court’s review of the settlement of a public-safety case that has drawn international attention should not be shrouded in secrecy,” argued Jean-Paul Jassy, the media’s lawyer. “Public confidence demands openness.”
Orange County Dist. Atty. Tony Rackauckas also opposed the effort to keep the amount secret. Last spring, he filed a state lawsuit against Toyota alleging, among other things, that it unlawfully sold defective vehicles.
In arguments Monday, Anne Hanna, a Toyota lawyer, raised the concern that revealing the size of the settlement would do little for public safety and much to fuel future litigation against the company.
“You cannot unring the bell,” Hanna said. “Once that amount is out there, everyone will hear about it.”
