Toyota faces a deadline today to file a contest to the nearly $16.4 million fine issued by the Department of Transportation over evidence it knew about sticking gas pedals in September but did not issue a recall until January. Under federal law, automakers are required to notify the government within five business days when they find a potential safety defect.
The fine, announced by the Transportation Department April 5 is the largest civil penalty ever against an automaker. Toyota Motor Corp. is expected to agree to pay the fine, the largest government penalty ever levied against an automaker, for Toyota’s four-month delay in telling federal authorities about defective gas pedals on its vehicles. If Toyota does not file a contest, then it must pay the fine within the next 30 days. However, even if Toyota pays the fine, it is not agreeing that the payment of the fine constitutes and admission of liability over these problems.
Transportation Secretary Ray LaHood said early this month that documents obtained from the Japanese automaker showed that Toyota knew of the problem with the sticking gas pedals in late September 2009, but that Toyota did not issue a recall until late January, 2010. The sticking gas pedal recall involved approximately 2.3 million vehicles. “We now have proof that Toyota failed to live up to its legal obligations,” Secretary LaHood said in a statement. “Worse yet, they knowingly hid a dangerous defect for months from U.S. officials and did not take action to protect millions of drivers and their families.” The National Highway Traffic Safety Administration (NHTSA) said documents provided by Toyota showed the automaker had known about the sticky pedal defect at least since September 29, 2009, when it issued repair procedures to distributors in 31 European countries to address complaints of sticking pedals, sudden increases in engine RPM and sudden vehicle acceleration. The documents also showed that Toyota knew that owners in the United States had experienced the same problems. For those reasons, LaHood said, the government is a seeking fine of $16.375 million, the maximum penalty possible.
The government has linked 52 deaths to crashes allegedly caused by accelerator problems in Toyotas. The recalls have led to congressional hearings, a criminal investigation by federal prosecutors, 100 personal injury and wrongful death cases in federal courts lawsuits as well as 138 potential class action lawsuits, and an intense review by the Transportation Department. The company has been named in 138 potential class-action lawsuits over falling vehicle values and about 100 personal injury and wrongful death cases in federal courts. Federal prosecutors and the Securities and Exchange Commission are conducting investigations related to the recalls.
Transportation officials have not ruled out additional fines. The department is reviewing whether Toyota also failed to comply with notice requirements by delaying for about six weeks before issuing the January, 2010 recall of the 2009-2010 Venza in the United States to address floor mats that could entrap the accelerator pedal after making a similar recall in Canada. Toyota recalled the Venza in Canada in December and reported to the U.S. government on December 16, 2009 that the floor mats could move forward while the vehicle is in use and “may interfere with the accelerator pedal.” Toyota told U.S. authorities at the time that the floor mats in question were not imported into the U.S. but the Venza was added to the floor mat recall in late January.
Obviously, this chapter in Toyota’s history is far from over as it continues to face mounting scrutiny of its products and its disclosures to consumers and to federal officials. There is no dispute that historically, private lawsuits have been a major positive influence in forcing manufacturers to make safer products. Even when the government is conducting its own investigation, as it is in this case, private lawsuits often uncover even more evidence and facts that the manufacturer was aware of the defects and the dangers of its products. As a result, the individual lawsuits against Toyota pose a real threat to Toyota if it has not fully and truthfully disclosed all of the information it has. We will continue to monitor the developments and periodically update you on some of the significant events.
Montes Law Group, P.C.
Attorneys: Rachel Montes
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