Judge Won’t Transfer Toyota Oil Consumption Defect Class Action Lawsuit

Last week, Toyota lost its bid to transfer the class action lawsuit accusing the car maker of covering up defect in it that causes excessive oil consumption to the Central District of California.

Lead plaintiffs filed their class action lawsuit in April alleging a defect that causes excessive oil consumption in certain Toyota models and, ultimately, catastrophic engine failure. The plaintiffs claimed that the allegedly defective models would use up their oil supply well before Toyota’s recommended maintenance schedule indicated an oil change was necessary. The plaintiffs further alleged that engine failure did not occur until after the warranty period.

Allegedly defective models include Camry, Corolla, Matrix and Rav4. In their class action lawsuit, the plaintiffs claim six causes of action against Toyota, including a violations of the California Consumer Legal Remedies Act, and California Unfair Competition Laws, as well as violations of the unfair business practices statutes of Florida, Washington, New York, and New Jersey, breach of express warranty common law fraud, breach of the covenant of good faith and fair dealing, and breach of California implied warranty.

The class action lawsuit was filed in the U.S. District Court of Northern District of California, where one of the named plaintiffs, April Lax, resides. In their motion, Toyota argued that a transfer of the case to the Central District of California was appropriate both because the company’s headquarters are located in that district and the six other named plaintiffs reside there. U.S. District Court Judge William H. Orrick disagreed, stating, “The number of named plaintiffs living in the Central District is not so lopsided to undercut the significant connection Lax has in this forum or to support an inference that forum-shopping was at play in the selection of the Northern District.”

“That only one of the seven named plaintiffs has a connection to this forum, when two others have a connection to the Central District, does not undermine the weight to be given plaintiffs’ choice of forum,” Judge Orrick continued. “Perhaps if there were only three named plaintiffs in this case, the fact that two were in the Central District might be more persuasive and weigh heavier on the other factors.”

Additionally, Judge Orrick dismissed Toyota’s argument that it would be more convenient to the parties to litigate the class action lawsuit in the Central District explaining, “The convenience of the named plaintiffs is neutral. While two of the named plaintiffs live in the Central District, one lives in the Northern District, one lives in Washington State (which is closer to the Northern District) and the other four live across the country. Overall, the convenience of the defendants bears some, but little, weight in favor of transfer.”

The plaintiffs are represented by Joseph G. Sauder and Matthew D. Schelkopf of Chimicles & Tikellis LLP.

The Toyota Oil Consumption Defect Class Action Lawsuit is April Lax, et al. v. Toyota Motor Corp., et al., Case No. 3:14-cv-01490, in the U.S. District Court for the Northern District of California.