Added to a wave of personal injury lawsuits stemming from Toyota’s massive recall, the automaker faces a growing number of consumer class-action cases — more than 40 so far — over the shrinking resale value of its cars.
Consumer lawsuits seeking economic damages for diminished value or lost use of a recalled Toyota vehicle have been filed in at least 30 states, mostly in federal court, and could end up costing the car maker over $2 billion, Tim Howard, lead counsel for a team of law firms handling about half the cases, estimated.
All the federal suits would be consolidated into a single class action in the next three to four months, following a hearing before a panel of judges set for March 25 in U.S. District Court in San Diego, Howard said.
Toyota Motor Corp.’s U.S. operations are based in California. A company spokesman declined to comment.
Litigation against the cash-rich Japanese automaker has mounted quickly in the weeks since it began the biggest recall in its history for repairs to ill-fitting floor mats and sticking gas pedals it blames for instances of unintended, sudden acceleration in its vehicles.
This week a separate recall was announced for braking flaws reported in Toyota’s top-selling hybrid car, the Prius, and U.S. regulators say they are reviewing dozens of complaints of potential steering problems in new Toyota Corollas.
Toyota has recalled some 8.5 million vehicles.
Lawsuits related to injuries and death are the most obvious cases being brought against Toyota. Up to 19 U.S. crash deaths over the past decade may be linked to accelerator-related issues at Toyota, congressional officials have said. An unknown number of injuries also are likely to spur legal action.
A class-action suit was filed in Los Angeles on Monday on behalf of U.S. shareholders accusing Toyota of misleading investors.
Howard, a Northeastern University law professor, said the consumer class actions are based on the premise that for Toyota car buyers “if you went to sell your car today, it’s worth a lot less than it was two weeks ago.”
Major automobile valuation services like Edmonds and Kelley Blue Book have downgraded the resale value of Toyotas by as much as 3.5 percent, and further decreases up to 6 percent can be expected, Howard said.
Toyota has long boasted one of the industry’s highest resale values for its vehicles, as well as a superb record of reliability and safety — all major factors in the company’s success in the U.S. market .
Class-action lawsuits are predominantly a U.S. phenomenon, involving a large group of plaintiffs who bring similar claims to court collectively.
Toyota is not the first car company to face such legal actions. In 2008, Ford Motor Co. agreed to payouts of up to $500 per plaintiff, in the form of discount vouchers, to settle a diminished-value case on behalf of 800,000 customers after a tire recall prompted concerns about potential rollover crashes in its Explorer sport utility vehicle.
(Reporting by Steve Gorman, Editing by Dan Whitcomb, Leslie Gevirtz)
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