Judge To Approve $1.6 Billion Toyota Settlement
SANTA ANA (CBSLA.com) — A federal judge is expected to formally approve a $1.6 billion settlement Friday in the class-action lawsuit against Toyota over sudden-acceleration problems.
U.S. District Judge James Selna is expected to sign off on his tentative ruling, which found the proposed settlement to be "fair, adequate and reasonable."
The settlement is believed to be the largest of its kind in value and number of customers affected, according to Steve W. Berman, one of the lead attorneys for the plaintiffs.
The lawsuit alleges that Toyota owners lost money in the resale of their vehicles because of bad publicity surrounding the acceleration issues.
Executives with the Torrance-based automaker are reportedly so eager to repay customers that Toyota's attorneys asked Judge Selna to finalize the settlement by Friday, rather than waiting until August as originally proposed. Toyota attorney John Hooper said about 500,000 Toyota owners are expected to file a claim.
Under the terms of the settlement, checks will be sent to those customers covered in the class-action suit, with first priority going to those customers who have already filed a claim. Executives plan to provided payouts to customers who do not file claims, though the terms and amounts are unknown.
In addition to payouts, Toyota customers will also receive brake-override systems for their car, Berman said.
Plaintiffs alleged that the car maker was aware of problems with its electronic throttle-control systems and failed to address them by installing brake-override systems. The car maker had previously maintained that sticky gas pedals and ill-fitted floor mats were to blame in incidents of sudden acceleration.
The $1.6 billion settlement includes an estimated $406 million plan to install brake-override systems for some Toyota owners, and another $250 million available for current owners who are ineligible for the brake system. The car maker has also agreed to a $250 million fund for owners who lost money on their vehicles from Sept. 1, 2009 to Dec. 31, 2010 due to negative publicity surrounding acceleration issues.
Attorneys fees and expenses, which could total an estimated $227 million, are expected to be approved as part of the settlement Friday.
Negotiations for the settlement took about two years, according to J. Gordon Cooney, an attorney for Toyota.
Cooney said that while the company maintains that Toyota vehicles are "safe, properly designed" and have "robust" systems in place to override sudden acceleration, the company sought to avoid a lengthy litigation process and felt it best to "put this behind" them.
Wrongful death and personal injury cases have yet to be decided, according to Attorney Mark Robinson, who is the lead attorney on those cases.
One case is set to go on trial before Judge Selna in November, and another to go before a Michigan jury the same month. A third case is schedule to be tried in Los Angeles County Superior Court this summer.
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