Toyota Owners Set Back in Lawsuit Over Losses

June 10, 2011

A federal judge said Toyota owners outside California who seek to recover losses in their vehicles’ value resulting from unintended acceleration cannot pursue their claims under that state’s laws.

Wednesday’s ruling by U.S. District Judge James Selna is a setback for the owners, because California consumer protection laws would give them a better chance than most states’ laws to recover on their “economic loss” claims.

Toyota Motor Corp. has said roughly 70 percent of the economic loss claims were originally filed in states other than California.

Selna, who sits in Santa Ana, California, said applying California law would revive many claims that other U.S. states would not permit, violating principles set forth by the U.S. Supreme Court on which law to apply.

“Application of California law to a nationwide class, at least in some instances, would drastically expand the scope of relief available to plaintiffs (to the detriment of Toyota),” Selna wrote.

A lawyer for the plaintiffs did not immediately return call a seeking comment. Toyota in a statement said it is pleased the court decided not to allow “a few handpicked plaintiffs” to set the course of litigation through “procedural engineering.”

Toyota owners have argued that their vehicles lost value because the company failed to disclose and fix problems with electronic throttle control systems, causing the vehicles to surge forward unexpectedly.

The Japanese automaker has disputed this claim, and has said it expects to prevail in the litigation. Selna handles most of the resulting federal lawsuits.

Toyota has since late 2009 recalled several million vehicles for problems, including stuck gas pedals and floor mat flaws, that owners have linked to unintended acceleration.

The case is In re: Toyota Motor Corp. Unintended Acceleration Marketing, Sales Practices and Products Liability Litigation, U.S. District Court, Central District of California, No. 10-ml-02151.

(Reporting by Jonathan Stempel, editing by Gerald E. McCormick)

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