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As a result of the New-Jersey-led “lemon law” investigation, Toyota has agreed to pay a total of $29 million to 29 states and one U.S. territory, and to make changes in both its corporate culture and corporate chain of command designed to help avoid such situations in the future, state Attorney General Jeffrey S. Chiesa announced today.
The company also is restricted under the settlement from promoting the safety of its vehicles without sound engineering data to support such claims.
“This is an important settlement not only because of the dollars, but because the terms are designed to help make Toyota more accountable, responsive and vigilant regarding vehicle safety issues,” Chiesa noted.
A statement was also released by the popular international car manufacturer:
“Resolving this inquiry is another step we are taking to turn the page on legacy issues from Toyota’s past recalls in a way that benefits our customers,” said Christopher P. Reynolds, group vice-president and general counsel of Toyota Motor Sales, U.S.A, and the chief legal officer of Toyota Motor North America.
“Immediately after this inquiry was launched in 2010, Toyota began cooperating fully with the Attorneys General and implementing ‘customer-first’ initiatives to address their concerns and those of our customers,” Reynolds said. “Today, we are pleased to have reached a cooperative agreement that reflects the commitment of Toyota’s 37,000 North American team members to put customers first in everything we do.”
A complaint filed today along with a Final Consent Judgment documenting the settlement alleges that Toyota engaged in unfair and deceptive practices by failing to report a known safety issue — namely a tendency of certain Toyota and Lexus models to accelerate unexpectedly.
Lead state New Jersey, as well as other states involved in the multi-state investigation, determined that poor communication between Toyota’s corporate nerve center in Japan and Toyota’s operations in the United States was partially responsible for Toyota’s failure to report the safety problem in a timely manner, Chiesa said.
“Going forward, the corporate changes to which Toyota has committed should go a long way toward averting similar problems in the future, and the requirement that safety-related advertising claims be supported by sound engineering data will provide an added layer of consumer protection,” he said.
As part of the settlement, Toyota has agreed to significantly change the safety culture within the company’s stateside operations.
Toyota also agreed to make sure that officials and officers of its U.S. operations have timely access to information, as well as the authority to fully participate in all decisions affecting the safe operation of Toyota vehicles advertised and sold in this country.
The requested changes are also expected to improve safety-related communications between Toyota’s holdings in the U.S. and Toyota’s other global holdings.
Under terms of the settlement, Toyota is:
- Prohibited from reselling a vehicle it reacquired with alleged safety defects without informing the buyer about the alleged defects and certifying that the reacquired vehicle has been fixed;
- Prohibited from misrepresenting the purpose of an inspection or repair when directing consumers to bring their vehicles to a dealership for inspection or repair;
- Required to exclude from its “Toyota Certified Used Vehicles” or “Lexus Certified Pre-Owned Vehicles” categories any vehicle acquired through “lemon law” proceedings or voluntarily repurchased by Toyota to ensure customer satisfaction.
In addition to New Jersey, lead states in the Toyota investigation included Connecticut, Florida, Louisiana, Michigan, Nevada, Ohio, South Carolina and Washington.
Deputy Attorneys General Jeffrey Koziar, Alina Wells and Jah-Juin Ho of the Consumer Fraud Prosecution Section within the Division of Law represented New Jersey. Investigator Todd Applegate of the Lemon Law Unit assisted with the investigation.
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