Toyota: Legal Implications

Everywhere you look there’s a story about Toyota and the gathering momentum behind a growing number of lawsuits filed against the company following its now three separate but related recalls of about nine million cars worldwide. An article in the L.A. Times today quotes a number of lawyers and legal experts discussing the legal implications for Toyota. For example, Richard Cupp, a professor at Pepperdine University School of Law is quoted as saying: “This has the potential to be the biggest product liability case in the automotive industry.† Others, like David Owen, a law professor at the University of South Carolina also quoted in the article, suggest that while litigation could tie up Toyota for a number of years the ensuing economic damages will be painful but manageable and the company will survive. Another article in the National Law Journal describes the growing number of lawsuits being filed. The cases appear to fall into three or more categories: personal injury cases filed by or on behalf of individuals injured or killed in Toyota crashes; class actions filed on behalf of consumers due to depreciation or decline in the value of their vehicles in the wake of the recalls; and securities class actions filed on behalf of shareholders who bought stock and are claiming a loss in share value. Time will tell how successful these cases will be. Out of interest, we typed “in defense of Toyota† into Google and came up with this post on the WalletPop blog where Bob Cesca reminds us of Ford Motor Co’s handling of safety concerns related to its Pinto hatchback vehicle in the 1970s and 1980s. It makes for an interesting read. Check out I.I.I. facts and stats on litigiousness.

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