http://www.insideline.com/toyota/federal-judge-drastically-limits-claims-against-toyota-in-sudden-acceleration-litigation.html

Federal Judge Drastically Limits Claims Against Toyota in Sudden-Acceleration Litigation

Published Jun 10, 2011

Just the Facts:

    In a major victory for Toyota, the federal judge overseeing the multidistrict litigation over alleged acceleration defects in Toyota vehicles has drastically limited the number of claims against the automaker.

    The ruling says that only California car owners  not those in other states  can take advantage of the state's favorable consumer-protection laws.

    Toyota told Inside Line that approximately 70 percent of the economic-loss cases in the litigation were originally filed outside of California.


SANTA ANA, Calif.  In a major victory for Toyota, the federal judge overseeing the multidistrict litigation over alleged acceleration defects in Toyota vehicles has drastically limited the number of claims against the automaker.

The ruling says that only California car owners  not those in other states  can take advantage of the state's favorable consumer-protection laws. The action drastically cuts the size of a potential class action against Toyota filed on behalf of consumers and calls into question speculation that the Toyota litigation could cost the automaker upward of $3 billion if it lost the federal case.

Toyota told Inside Line that approximately 70 percent of the economic-loss claims in the litigation were originally filed outside of California.

U.S. District Judge James V. Selna ruled on June 8 that consumers who relied on Toyota's guarantees of reliability and safety should not be allowed to pursue economic damages under California's state law if they lived or purchased their vehicles in another state. California laws could conflict with those of other states, said the ruling. In addition, California's statute of limitations for the economic-loss claims is more generous than many other states.

The suits stem from a recall of more than 8 million vehicles worldwide, mainly related to complaints of sudden acceleration. Toyota has used a NASA and National Highway Traffic Safety Administration study to argue that the lawsuits are without merit.

On May 13, Selna refused the automaker's request to dismiss the litigation, saying that Toyota owners had alleged enough facts establishing overpayment, loss in value or loss in usefulness with regard to the vehicles in question.

Toyota said it was gratified about the June 8 ruling.

"We're gratified the court has recognized that allowing a few handpicked plaintiffs to set the course for customers throughout the United States through this kind of 'procedural engineering' would go against established law, diminish Toyota's substantive rights and undermine the purposes of these multidistrict proceedings," said Toyota spokesperson Celeste Migliore in an e-mailed response to an Inside Line query. "Importantly, approximately 70 percent of the economic-loss cases in this litigation were originally filed outside of California, and many of those states would not allow the claims brought by customers whose vehicles have never manifested a defect."

Another hearing in the Toyota case is scheduled for today. The June 8 ruling did not pertain to the 100 personal injury and wrongful death cases filed against Toyota in the multidistrict litigation, noted The National Law Journal.

Inside Line says: Score one for Toyota, but the battle is far from over.  Anita Lienert, Correspondent

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