Toyota Class Action Moves Forward

Here’s some good news for Toyota owners whose car values took a hit by the massive Toyota recall issued this summer: A federal judge in California tentatively ruled last week that millions of Toyota vehicle owners can proceed with a consolidated class action lawsuit against Toyota for economic losses.

The Toyota class action lawsuit is the first major civil action in the United States against Toyota since the automaker recalled millions of vehicles this summer due to dangerous defects such as “sudden unexpected acceleration” and brake defects. The Toyota owners allege in the newly consolidated Toyota recall class action lawsuit that their vehicles lost significant value as a result of both the recall and federal investigations stemming from thousands of consumer complaints. The lawsuit alleges Toyota ignored evidence of sudden acceleration in its vehicles for nearly a decade and failed to install a brake override system it knew could have prevented accidents. In the past, Toyota has boasted one of the industry’s highest resale values for its vehicles, as well as an excellent record of safety and reliability.

U.S. District Court judge James Selna threw out Toyota’s attempt to dismiss the consumer class claims and tentatively ruled last week that he would leave in tact the bulk of the consumer class action lawsuit against Toyota seeking damages for economic losses. The crux of the economic damages claim is that Toyota customers overpaid for their vehicles, sold their vehicles at a loss or made lease payments that were too high once publicity of the safety defects saturated the news.

If the ruling is finalized this week, an estimated 40 million Toyota owners will be considered class members. Class status of the lawsuit, however, has not yet been certified.

If certified, the Toyota consumer class action will seek compensation to owners for lost resale value of their vehicles, regardless of whether they personally experienced sudden acceleration or brake defects. Selna said in his ruling, however, that he was inclined to bar plaintiffs from seeking full vehicle refunds for car owners.