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The attorneys representing Toyota (NYSE:TM) owners who claim that their vehicles are prone to sudden, unexplained acceleration today announced that Toyota has agreed to a settlement valued between $1.2 and $1.4 billion, which includes direct payments to consumers as well as the installation of a brake-override system in an estimated 3.25 million vehicles.
The case was filed in 2010 after drivers across the country began reporting that Toyota vehicles suddenly and unintentionally accelerated. Toyota has long maintained that the vehicles were free from electronic flaws causing the acceleration.
Neither the National Highway Traffic Safety Administration (NHTSA), nor the National Aeronautics and Space Administration (NASA) was able to find any defects in Toyota’s source code that could cause these events.
After a flurry of lawsuits were filed against Toyota, Judge James Selna consolidated the cases in U.S. District Court in California and appointed attorney Steve Berman, managing partner of Hagens Berman Sobol Shapiro as co-lead counsel on May 14, 2010, placing Berman in charge of directing the class litigation and leading settlement discussions with the Japanese auto manufacturer.
“After two years of intense work, including deposing hundreds of engineers, pouring over thousands of documents and examining millions of lines of software code, we are pleased that Toyota has agreed to a settlement that was both extraordinarily hard-fought and is exceptionally far-reaching,” said Berman.
Under the terms of the proposed settlement, Toyota will install a brake-override system in vehicles subject to floor mat entrapment recalls. Brake-override systems cut power to the throttle under certain circumstances when the car receives simultaneous signals to accelerate and to stop.
In addition, the settlement establishes a fund of $250 million to be paid to former Toyota owners who sold their cars during the period from Sept. 1, 2009, through Dec. 31, 2010, to compensate those owners for an alleged reduced value as a result of publicity concerning unintended acceleration.