Toyota Motor Corp. has agreed to settle a shareholder class-action lawsuit related to its sudden acceleration problems for $25.5 million.
The settlement would put to rest allegations that the company hurt the value of its stock by hiding defects and other safety problems as well as by not acting swiftly to address vehicles that accelerated out of control.
Those problems came to the surface in late 2009 following a horrific San Diego County accident that killed a family of four in a Lexus. In the months following, Toyota recalled more than 10 million vehicles worldwide, faced multiple congressional investigations and eventually paid record fines of almost $50 million.
Plaintiffs in the class-action suit, led by the Maryland State Retirement and Pension System, had claimed damages in excess of $100 million dollars. Overall, Toyota’s total market value fell by as much as $30 billion at the height of the crisis.
“We are pleased to be turning the page on this legacy legal issue, pending court approval, and believe this is a reasonable outcome,” Toyota spokesman Mike Michels said of the settlement, which was revealed in court documents filed Tuesday.
The first shareholder lawsuit prompted by the sudden acceleration claims was filed in early 2010, and since then the cases have been narrowed to holders of Toyota stock traded on the New York Stock Exchange. The claims were consolidated in U.S. District Court in Los Angeles. Judge Dale Fischer has yet to approve the settlement.
In settling this case, Toyota removes another legal obstacle from its path. Last year, Toyota settled a wrongful-death case with the parents of the family killed in San Diego for $10 million.
But the Japanese automaker still faces numerous – and potentially far more costly -- lawsuits related to sudden acceleration and other alleged safety problems.
Among them are multi-plaintiff state and federal cases alleging personal injury and death due to Toyota vehicles, as well as cases brought by consumers who contend that the value of their vehicles was diminished because of safety defects.
Those cases are set for trial starting early next year.