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Toyota to Pay $1.2 Billion Settlement

Tina Robinson3 years ago

The U.S. Department of Justice has announced that it has reached a $1.2 billion settlement with Toyota Motor Corp. The settlement concludes a four-year criminal investigation into Toyota’s response to vehicle safety issues.

Toyota and Justice Department Announce Settlement

Fox News is reporting that Toyota and the U.S. government have reached a $1.2 billion settlement in connection the company’s 2009 recall of millions of vehicles. The agreement requires Toyota to admit that it misled U.S. consumers by making deceptive statements about two safety issues in its vehicles.

The settlement is the largest penalty of its kind to be imposed on an auto company in the United States.

A statement made by Toyota noted that the automaker has “cooperated with the U.S. Attorney’s office in this matter for more than four years.” Toyota also added that it has “made fundamental changes to become a more responsive and customer-focused organization.”

About the 2009 Toyota Recall

“By the [Toyota’s] own admission, it protected its brand ahead of its own customers. This constitutes a clear and reprehensible abuse of the public trust.” – Attorney General Eric Holder as published by FOX News

In 2009, Toyota issued a massive recall of over 10 million vehicles due multiple issues including faulty brakes, gas pedals and floor mats which resulted in unintended acceleration issues.

Between 2010 and 2012 Toyota paid more than $66 million in fines to the National Highway Traffic Safety Authority (NHTSA) for delays in reporting the potential hazard.

In a statement made Wednesday by Attorney General Eric Holder, Toyota exhibited “a blatant disregard for systems and laws designed to look after the safety of consumers.”

Legal Action Against Toyota

According to Fox News, Toyota agreed to pay more than $1 billion to resolve pending lawsuits against the automaker at the end of last year. The lawsuits claimed economic losses on the recalled vehicles.

The agreement does not include lawsuits for wrongful death or injuries, which have been consolidated in California and federal courts.

In Oct. 2013, a jury awarded $3 million in damages for a fatal accident involving a 2005 Camry. A passenger in the vehicle was killed, and the driver sustained injuries after the vehicle unintentionally accelerated.  This decision was notable because it was the first unintended acceleration trial lost by Toyota.

Warning to Other Automakers

The $1.2 billion dollar settlement should be a warning to other automakers not to make the same mistake as Toyota, according to Holder.

This warning comes on the heels of GM’s announcement last month of a vehicle recall involving 1.6 million cars with faulty ignition switches.

GM is currently under several federal investigations to determine if GM delayed reporting a problem with the switches. 


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