Will Toyota’s Woes Lead to Successful Suits?

Toyota’s vehicle recalls have been front-page news for some time now, and this spawned many lawsuits from Toyota owners. Some of these plaintiffs have been injured when their vehicles malfunctioned. But there are also many plaintiffs with recalled models who don’t have any personal injury or property damages to point to. 

To be successful, a plaintiff must show that the manufacture or design caused injury (Soule v General Motors Corp. (1994) 8 C4th 548, 560, 34 CR2d 607). So, the $64,000 question (more likely, $64 million) is whether the plaintiffs who have not been involved in an accident with their Toyota vehicle will be able to make the required showing of injury.

Plaintiffs in many suits are relying on the economic harm of decreased vehicle value. Kelley Blue Book has already lowered the resale value of Toyotas and it’s expected to drop more.  As quoted on Manufacturing.net’s blog, Tom Baker, a University of Pennsylvania law professor, called these class-action suits based on economic injury

“more scary for Toyota than the cases where people actually got injured…[because] you could have millions of individual car owners who could (each) be owed $1,000. “

Will these “economic damages only” cases succeed? And keep your eye on the next legal woe for Toyota — suits brought by shareholders seeking redress for the recalls’ disasterous effect on Toyota’s share price.

From a legal standpoint, we are seeing just the beginning of the fallout from the recall.

For more on potential tort causes of action that could be brought against Toyota, see California Tort Guide (3d ed Cal CEB 1996).

© The Regents of the University of California, 2010. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited.

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5 Responses

  1. Great post. I’ve been looking for this exact information for a while now. I’ll bookmark it in the public bookmarking sites to get you more clicks.

  2. MOst sates have adopted the economic loss rule which bars any action in tort for purely economic loss to a product. This would include loss of resale value. Doesn’t this rule apply?

  3. I have trouble coming up with a legal theory based on loss of resale value. Toyota doesn’t warrant a specific depreciation schedule, but that a product will be usable for its intended purpose. Any number of factors could effect resale value.

    What if a company’s reputation for quality increased and their cars’ resale value increased–would consumers have to pay additional money to the manufacturer?

  4. I just read a great post on how Toyota and its owners could approach resolving these cases in mediation. The post was about apologies, but also talked about mediating cases like this. It was at http://www.eyeonconflict.com. Any thoughts about this?

  5. Congress called for hearings and all the plaintiff’s attorneys flew into Washington and recorded the hearings (or took notes) to use against Toyota in cases they had filed against them.

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