Judge gives Toyota 30 days to produce documents

SANTA ANA, Calif., May 28 (Reuters) - A U.S. federal judge on Friday gave Toyota 30 days to turn over the bulk of documents sought by class-action lawyers from previous investigations of complaints about its cars racing out of control.

The order by U.S. District Judge James Selna marked a defeat for Toyota, capping the company's first courtroom skirmish with plaintiffs lawyers since scores of personal injury and class-action consumer claims filed in federal court against the automaker were consolidated last month.

The Japanese automaker faces potential civil liability estimated at more than $10 billion as it struggles to overcome an auto safety crisis that has badly tarnished its image.

Complaints of runaway vehicles have led to the recall of more than 8 million Toyota vehicles worldwide for repairs of ill-fitting floor mats and sticking gas pedals the automaker blames for surging engines.

Many of the lawsuits assert that at least some of the acceleration problems are rooted in an as-yet unidentified electronic glitch, which Toyota has vehemently denied.

Two key U.S. lawmakers have said their preliminary review of internal documents turned over to Congress suggest Toyota "consistently dismissed the possibility" of electronic failures for years without thoroughly examining the issue.

Plaintiffs attorneys were seeking immediate possession of roughly 125,000 pages of internal documents already submitted to congressional panels and auto safety regulators.

Those papers have remained largely confidential, except for a relative handful cited in recent congressional hearings on Toyota's handling of complaints of sudden, unintended acceleration in its vehicles.

FIRST COURTROOM SKIRMISH

They could prove valuable to plaintiffs' attorneys trying to substantiate their claims of product defects, negligence, fraud and other wrongdoing against Toyota Motor Corp. (7203.T) (TM.N)

Under Selna's order, Toyota has 30 days to turn over any English-language documents it does not consider privileged -- those involving communications with its own lawyers.

Selna gave Toyota up to 60 days to produce Japanese-language papers among the documents, said by the automaker to number some 20,000 pages.

Any documents containing trade secrets or other information that might compromise Toyota's competitive position will be kept confidential under a protective order the judge said he would issue in the next 30 days.

Plaintiffs lawyers argued that swift disclosure of the documents would ease the task of drafting a newly consolidated version of all legal claims seeking compensation from Toyota for economic losses -- such as diminished resale value -- stemming from the acceleration problems and related recalls.

"We need all that material to form an educated complaint" against Toyota, lead plaintiffs attorney Steve Berman told a hearing before Selna.

But Toyota's lawyers countered that requesting such documents at this stage is premature and violates basic rules of pretrial discovery that govern the sharing of information between the two sides in litigation.

They also said more time was needed to sort through the documents to determine which were privileged.

In the end, the judge insisted that 30 days was sufficient for the bulk of documents already delivered to Congress and the National Highway Traffic Safety Administration.

Selna also rejected Toyota's recommendations for how the plaintiffs attorneys should structure their revised complaint.

"We're pleased with that," Berman said at the end of the hour-long hearing. The next hearing was set for June 23.

Toyota has said it is aware of nearly 230 federal lawsuits filed around the country for personal injury, wrongful death and economic loss claims stemming from acceleration issues -- all of them now wrapped together in the consolidated pre-trial proceedings overseen by Selna.

The company said it faces about 100 other lawsuits filed in various state courts around the country. About 40 of those are in California, where a state judge on Wednesday ordered them consolidated separately. He has recommended they be assigned to an Orange County court also.

NHTSA said this week that as many as 89 deaths could be linked to unintended acceleration in Toyota vehicles, up from a previous tally of 52 fatalities.

This article was written by Steve Gorman and was provided by Reuters.

http://www.reuters.com/article/idUSN2819146820100528

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Toyota faces $16M fine, accused of hiding defect

WASHINGTON — Federal safety regulators said Monday that they intend to fine Toyota Motor $16.4 million — the largest ever penalty against an automaker — for failing to disclose problems with sticky accelerator pedals quickly enough.

The National Highway Traffic Safety Administration said Toyota knew in September that it had a problem with accelerator pedals that required fixing, but failed to recall 2.3 million vehicles until January — four months later.

In taking the step, federal authorities are sending the strongest signal yet that they believe the automaker deliberately concealed safety information from them.

"We now have proof that Toyota failed to live up to its legal obligations," Transportation Secretary Ray LaHood said. "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."

Auto manufacturers are legally obligated to notify NHTSA within five business days if they determine a defect exists. NHTSA said it learned after reviewing Toyota's records that it had known of the pedal defect since at least Sept. 29, 2009.

NHTSA outlined its findings in a five-page letter to Toyota late Monday and gave the company until April 19 to respond in writing. NHTSA said it will go to court to impose the fine if Toyota raises objections.

A Toyota spokeswoman, Cindy Knight, said in a statement that the

company had not yet received a letter from the agency about the fine.

"We have already taken a number of important steps to improve our communications with regulators and customers on safety-related matters as part of our strengthened overall commitment to quality assurance," Knight said.

The $16.375 million penalty is the maximum NHTSA can levy under law. Congress increased the penalties in 2000. Previously, its largest fine was $1 million against General Motors in 2004 for failing to disclose a defect with windshield wipers in 600,000 vehicles for more than two years. Toyota could face more fines as the agency continues to investigate.

"We will continue to hold Toyota accountable for any additional violations we find in our ongoing investigation," NHTSA Administrator David Strickland said.

The fine against Toyota comes just six weeks after the NHTSA launched an investigation into the timeliness and scope of the automaker's three recent recalls. About 2.3 million vehicles were recalled in January for the sticky pedal defect. Toyota has separately recalled 5.4 million vehicles over issues with gas pedals becoming entangled with floor mats, with some covered by both.

Reviewing Toyota's records, NHTSA learned that the automaker issued repair procedures Sept. 29 to its distributors in 31 European countries and Canada to address complaints of sticky accelerator pedals and sudden acceleration. Documents show Toyota was aware that U.S. consumers were experiencing the same problems, the agency said.

NHTSA also obtained hundreds of e-mails from Toyota that support its conclusion Toyota knew of the issue last year.

The agency has received more than 3,000 complaints of runaway Toyota vehicles since 2000, alleging at least 51 deaths.

The penalty is a financial pittance for Toyota, which had revenue of $209 billion last year, but could add to its public relations woes. The company has endured congressional hearings and a torrent of bad publicity over the sudden acceleration problem.

Sid Shapiro, a law professor at Wake Forest University and vice president of the Center for Progressive Reform, a legal research organization, questioned whether the Toyota fine would be effective.

"It's good news that NHTSA is being an aggressive regulator, but you have to have doubts whether a $16 million fine is going to have a deterrent effect on automobile companies that are worth billions of dollars," Shapiro said.

But Mike Rozembajgier, director of recalls for Expert- RECALL, a consulting firm that helps manufacturers conduct product recalls, said the amount of the fine might be less important than the reasoning behind it.

Toyota reported strong March sales, helped by the generous incentives it introduced after the recalls. But Rozembajgier said its customers could be less supportive should it turn out Toyota tried to hide the defects, as the government contends.

"If it was done knowingly," he said, "then it certainly becomes a game-changer for consumers."

NHTSA, which came under harsh scrutiny for conducting eight investigations into sudden acceleration issues at Toyota since 2000 and doing little, is now taking a far more aggressive stance with automakers.

This article was written by David Shepardson of The Detroit News

http://www.mercurynews.com/breaking-news/ci_14826155?nclick_check=1

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