Potential Class-Action Lawsuit Leads Latest Legal Charge Against Toyota
Once again, Toyota is facing legal action from a group of disgruntled buyers tired of dealing with the brand's current safety recalls. In a move that echoes a similar strategy employed against Honda in recent years, a large number of current Toyota owners located in the state of Washington and the state of Arizona have banded together in order to form the basis for a class-action lawsuit. The goal? Each of these owners is demanding that Toyota take back possession of their vehicles and provide them with a full refund.
The fuel behind this legal fire is of course the anger surrounding the unintended acceleration issue that plagues millions of Toyota vehicles around the world. Specifically, the participants in this lawsuit are hoping to be able to expand its scope across the entire United States so that the owners of the vehicles involved in the recall can participate.
Not only do the proponents of the lawsuit claim that they no longer 'trust' the safety of their vehicles, but some are also frustrated by the significant drop in resale value experienced by Toyota automobiles as a result of the sticky accelerator and floor mat recalls. Some of those who belong to this second group would be content with receiving a payout making up the difference in this value. Adding to the confusion - and the nightmare for Toyota - are another group of lawyers called the Attorneys Toyota Action Consortium who have banded together in order to accuse the Japanese brand of racketeering. The source of their claim? Evidence that they say points to the automaker keeping quiet despite being aware of potential safety problems with its cars and trucks as early as the year 2000.
Clearly, the potential financial hit for Toyota if the courts rule against it and force it to repay the owners of the close to six million vehicles covered by the unintended acceleration recall would be measured in the billions of dollars. This is true regardless of whether the company is compelled to provide a full or even partial refund, given that some of its vehicles have seen as much as a 15% drop in their Kelley Blue Book value. The full refund lawsuits will be subject to a consolidation hearing next week in order to determine their eligibility for class-action status.
If all of these lawsuits seem merely like opportunism on the part of the legal community, or at the very least the actions of a small group of attorneys sensing the potential to profit from a huge corporation's well-publicized struggle, consider the Honda lawsuit mentioned above. In the past 12 months, Honda has had to settle with participants in a class-action suit comprised of Honda Civic Hybrid owners who were discontented with the fact that their real-world fuel mileage did not come close to matching what Honda had advertised. Not only was Honda forced to settle with its accusers, but a judge later re-opened the case based on the opinion that the company's offer to those involved was too stingy.
Even if Toyota chooses to take the least expensive path and compensate current owners in the form of a rebate or payment in the neighborhood of $500, the sheer volume of claims will quickly deplete the brand's treasure chest. It doesn't take a calculator to know that $500 multiplied by 6 million is a sum large enough to make a serious dent in the company's reputation and bank account.
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