Authorities in Orange County, California today filed a consumer protection lawsuit on behalf of California owners of Toyotas, saying the company knowingly sold cars with safety flaws. The lawsuit claims people have been injured or killed because of the faulty vehicles, and owners and lessees of recalled vehicles have suffered economic and property damage. The case was filed by Orange County District Attorney Tony Rackauckas with help from a leading Orange County plaintiffs law firm, Robinson, Calcagnie & Robinson.
“Toyota has known about these defects but intentionally did not disclose them to California purchasers,” Rackauckas told Agence France Presse. ”Rather than halt the sales of products in California until the problem was fixed, they made a business decision to continue selling and leasing their defective products to Californians.” A Toyota spokesman said the company had not seen the complaint and could not comment.
Rackauckas said the lawsuit is the first consumer protection case filed by a government agency stemming from recalls of millions of Toyota vehicles. The company already faces more than 100 class-action lawsuits and at least three dozen individual lawsuits over sudden acceleration, according to Bloomberg news. accounting.
In addition, Toyota faces a federal criminal investigation, and inquiries by the Securities and Exchange Commission, the Connecticut Attorney General, a U.S. attorney in New York, and the city attorney for Los Angeles, which has a fleet of about 250 Toyota vehicles. And more scrutiny is likely.
Besides questions about whether the company concealed safety defects, issues include the company’s competitive practices and advertising claims, experts told the Los Angeles Times.
Allan J. Kam, a former attorney for the National Highway Traffic Safety Administration, told the Los Angeles Times that Toyota would face a civil penalty of up to $16.4 million if it’s found the company merely failed to make timely recalls.
From the Times story:
It’s a drop in the bucket compared to what a recall might cost,” said Kam, who now runs a regulatory consulting firm in Maryland. “However, the equation changes completely when executives say, ‘Hold on, I may go to jail.’ “
Federal regulators are also drawing flak. At a congressional oversight hearing on Thursday, vehicle safety regulators were grilled about their response to Toyota’s problems. From an AP report on the hearing:
David Strickland, head of the National Highway Traffic Safety Administration, said Thursday his agency will take a “hard look” at the power it has to set safety standards for automakers. Current authority, acquired in the 1960s and 1970s, may not be enough to oversee the technology used in modern vehicles, he said.
But one lawmaker at a House hearing said the agency’s problems seem to have more to do with “ineptitude” and lack of money than with insufficient powers. Rep. John Dingell, D-Mich., said the agency’s response to the Toyota recalls had been sluggish after “years of stagnation in funding.”
