Toyota Settlement May Signal Future Legal Strategy

As Toyota Motor Corp. chips away at settling lawsuits claiming its vehicles suddenly accelerate, the question remains whether attorneys who sued could prove to a jury there was a design flaw.

The company maintains stuck accelerator pedals, faulty floor mats and driver error are the reasons for vehicles unexpectedly surging, while plaintiffs’ attorneys contend Toyota’s electronic throttle control system is to blame.

Recent settlements totaling more than $1 billion by Toyota to resolve numerous lawsuits involving economic loss and a few involving wrongful death claims may signal that the automaker doesn’t want to risk coming out on the losing end of a potentially costly court decision.

“A bad loss in a jury trial would inflict lasting damage to Toyota in loss of public confidence,” said Los Angeles-based attorney Christine Spagnoli, who has won several multimillion-dollar verdicts against automakers over safety defects. “I believe Toyota will continue to look for better opportunities to get a win.”

The company said Thursday it settled a lawsuit with the family of two people killed in a Utah crash that was set to go to trial next month and serve as a test case for hundreds of others that are pending.

Terms of the agreement weren’t released, but it comes just weeks after Toyota agreed to pay more than $1 billion to settle lawsuits where vehicle owners said the value of their cars and SUVs plummeted after the company recalled millions of vehicles because of sudden-acceleration issues.

In the Utah case, Paul Van Alfen and his son’s fiancee, Charlene Jones Lloyd, were killed when their Camry slammed into a wall near Wendover, Utah. in 2010. The Utah Highway Patrol concluded based on statements from witnesses and the crash survivors that the gas pedal was stuck.

It was the first so-called “bellwether” case, before a federal judge in Orange County, California, chosen to help predict the potential outcome of other lawsuits making similar allegations.

Wayne Mason, a product liability attorney in Dallas, doesn’t believe Thursday’s settlement portends poorly for either side going forward.

“This is like taking an aspirin when you have a migraine,” Mason said. “Each of these cases has to be weighed on their own merit. I will be surprised if some don’t get tried.”

Toyota continues to be dogged by sudden-acceleration issues that arose four years ago. Last month the U.S. government hit the company with a record $17.4 million fine for failing again to quickly report problems to federal regulators and for delaying a safety recall. More than 150,000 2010 Lexus Rx 350s and RX 450h models were recalled because the driver’s-side floor mats can trap the gas pedal and cause the vehicles to speed up without warning.

Toyota has recalled more than 14 million vehicles globally to fix sticky gas pedals and floor mats. The company also paid a total of $48.8 million in fines for three violations in 2010.

While the recalls have soiled the company’s sterling reputation for reliability, Toyota has regained its position as the world’s largest automaker and saw sales increase 27 percent last year.

The automaker also has received some vindication Both the National Highway Traffic Safety Administration and NASA were unable to find any defects in Toyota’s source code that could cause acceleration problems.

In 2011, a federal judge found that Toyota wasn’t liable for a 2005 crash involving a Scion that the driver blamed on the electronic throttle or a floor mat.

A second bellwether trial is slated for later this year, but it’s unclear if a resolution will be made before then. Plaintiffs’ attorneys have reviewed thousands of internal Toyota documents, reviewed data and deposed employees, but most of that material has been kept under seal in court records.

In a statement announcing the Van Alfen settlement, Toyota said there will be a number of other chances to defend itself in a court of law, although the company may “decide from time to time” to settle select cases.

“It would seem that Toyota did not want a public airing of the evidence that has been gathered in the lawsuits, so that it can continue to say that there is not a problem,” Spagnoli said. “If Toyota felt it could have successfully defended its products in these cases, it would have welcomed a public trial.”