Toyota to settle acceleration case for more than $1b

DETROIT — Toyota Motor Corp. agreed Wednesday to pay more than $1 billion to settle a class-action lawsuit related to issues of unintended acceleration in its vehicles.

The proposed settlement, filed in US District Court in California, would be one of the largest of its type in automotive history. If the agreement is approved by Judge James V. Selna, Toyota would make cash payments for the loss of value on vehicles affected by multiple recalls and install special safety features on up to 3.2 million cars.

While there are still individual personal injury and wrongful death lawsuits pending, in addition to an unfair business practice case brought by the attorneys general of 28 states, the class action was the largest legal action related to economic losses by vehicle owners.


The suit was filed in 2010 after numerous complaints to regulators that Toyotas were accelerating suddenly without warning and causing accidents and injuries. Toyota has recalled more than 8 million vehicles in the United States for problems related to floor mats that could become entangled with accelerator pedals, or pedals that could stick with the throttle open.

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But the class action contended Toyota’s electronics systems were at fault. After a long investigation, government officials concluded there was no evidence that faulty electronics contributed to the acceleration issues. But a review of that inquiry by a branch of the National Academy of Sciences found that federal regulators lacked the expertise to monitor electronic controls in automobiles.

The company was fined more than $60 million by the National Highway Traffic Safety Administration for failing to inform regulators of internal information about the sudden acceleration, which Toyota mostly attributes to driver error. Recalls mushroomed into broader problems for Toyota, which had long had a pristine reputation.

‘‘This agreement marks a significant step forward for our company, one that will enable us to put more of our energy, time, and resources into Toyota’s central focus: making the best vehicles we can for our customers,’’ said Christopher P. Reynolds, chief US legal officer.

Toyota agreed to create a fund of $250 million to pay claims to former owners of cars affected by acceleration recalls, install brake override systems on cars whose pedals could stick or become trapped in floor mats, set up a support program for more than 16 million current Toyota owners who will be eligible for free repairs on certain parts, and contribute $30 million to finance auto safety research.


The lead law firm for the plaintiffs estimated the overall settlement could total $1.2 billion to $1.4 billion.

Toyota said it would take a one-time charge of $1.1 billion to cover costs.