Toyota Motor Corp. (7203) won dismissal of most claims by Florida and New York car owners who contended the company drove down the value of their vehicles by failing to disclose or fix defects related to sudden acceleration.
Florida plaintiffs can’t sue Toyota for economic loss if they didn’t experience an actual “sudden unintended acceleration” event, said U.S. District Judge James Selna in Santa Ana, California, making final a tentative ruling from April. New York plaintiffs are cut out if they didn’t experience such an event or didn’t have a measurable loss when trying to sell or trade in their vehicles, Selna said.
Yesterday’s ruling will affect “most economic loss claims” in those states, said Carl Tobias, law professor at the University of Richmond in Virginia. “It might also make assembling a class more difficult as there would be significantly fewer eligible parties.”
The decision may eliminate millions of vehicle owners from the litigation, lawyers for Tokyo-based Toyota and the plaintiffs said at an April 23 hearing. Selna had earlier decided that California plaintiffs could sue over economic loss even if they didn’t experience an episode of unintended acceleration. Selna also ruled in June that vehicle owners in other states couldn’t use California law to pursue their claims.
‘Ticking Time Bombs’
“We are disappointed that Judge Selna requires class members to drive ticking time bombs before they can sue,” Steve Berman, a lead lawyer for plaintiffs claiming economic loss, said in an e-mail yesterday. “Given the thousands of crashes, hundreds of deaths, Toyota’s inability to fix the cars, we don’t believe courts in New York or Florida would agree. They have not been presented with this issue and we intend to present it to the highest courts of these states.”
A Toyota representative had no immediate comment on yesterday’s ruling.
The decision doesn’t affect claims by plaintiffs in other states or those alleging personal injuries or deaths caused by sudden-acceleration episodes.
Selna, who is overseeing most federal sudden-acceleration claims, has set three trials in 2013 in his court.
The first, set for Feb. 19, 2013, will cover claims by the families of two people who were killed in a crash in Utah in 2010. He also scheduled the first trial over claims of economic loss tied to unintended acceleration for July 2013 and a second wrongful-death case for November 2013.
Selna said in June that he probably would limit the economic loss trial to claims from car owners in three states. Plaintiffs’ lawyers were seeking to include cases from California, New York and Florida, which, according to arguments before the judge, have more liberal consumer laws. The Toyota City, Japan-based company’s lawyers were seeking to include cases from states with less consumer-friendly laws, such as Georgia, Ohio and Illinois.
Toyota, the world’s largest automaker, recalled at least 8 million U.S. vehicles starting in 2009, after claims of defects and incidents involving sudden unintended acceleration. The recalls set off hundreds of economic-loss suits and claims of injuries and deaths.
The three cases were selected for bellwether trials, which will be used by the court and lawyers for both sides to test evidence and liability theories before moving on to other trials, limiting future litigation and helping the judge decide whether to grant the cases class-action status. Selna has been overseeing the lawsuits for evidence-gathering and pre-trial rulings.
Toyota lawyer Cari Dawson argued at the April 23 hearing that New York, Florida and a majority of the states in the U.S. have laws that require that there be “a manifestation of defects” claimed in lawsuits.
“Courts have held that being compensated for defects that are not manifested is speculative, unfair and bad economics,” Dawson told the judge, who heard oral arguments over his April 20 tentative ruling. She said that plaintiffs do not have a right to sue “for a harm that may never occur.”
The cases are combined as In re Toyota Motor Corp. Unintended Acceleration Marketing, Sales Practices and Products Liability Litigation, 8:10-ml-02151, U.S. District Court, Central District of California (Santa Ana).
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