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.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV