May 31, 2013
The $1.63 billion deal in the Toyota Unintended Acceleration economic damages multi-district litigation worked out between the lawyers for Toyota and Hagens Berman, Sobol, Shapiro, and Susman Godfrey the firms representing 22.6 million consumers is headed for a final approval hearing before U.S. District Judge James Selna on June 14, and really, who could complain?
Toyota gets to continue to claim that its electronics are just fine while funding research blaming drivers for runaway vehicles that it can stash in its back pocket for future unintended acceleration product liability lawsuits. Some Toyota owners – but not those of the most troubled model years will get a brake override system that sorta, kinda may work sometimes under select conditions (hint—don’t put your foot on the brake first).
There’s $250 million for consumers whose vehicles are ineligible for a brake override retrofit. The cash payouts for those folks range from $37.50 to $125. Let’s see. That ought to cover an oil change, a new set of windshield wiper blades, and a Vente Mocha Chip Frappacino at Starbucks to sip while you wait. Done!
There’s another $250 million in cash to cover owners’ economic losses incurred during sales or lease terminations while the crisis unfolded. Those folks have the potential to do a lot better. A 328-page matrix calculates the precise value of the loss by the owner’s home state, vehicle make, model and model year, the year and month of the sale. While the vast majority would receive nominal amounts – $37.50 is the lowest – some models and model years sold in 2010 could receive a few thousand in lost sale price potential. The largest such award would go to owners of 2007 Lexus LX vehicles who sold their cars March of 2010 – $5,977. Some of the other high-dollar-vehicles were the 2008 Lexus LX and LS, the 2008 Sequoia, the 2008 Highlander and Highlander Hybrid sold in certain months of 2010
Nonetheless, more than 200 Toyota owners and safety advocates, found a lot to object to. Their arguments ranged from complaints that the settlement remedies did not address the central problem Toyota identified – wandering floor mats – to the size of the lawyers’ fees, to the distribution of the cy pres money – any unclaimed funds after the class members have been paid. Some objections were brief and hand-written. Some were lengthy legal challenges with lots of citations.
One group of objectors protested the settlement’s potential to release the automaker from claims in a separate class action lawsuit over the Anti-lock Braking System in Prius vehicles which was headed for a certification hearing on June 17.
Many criticized the $200 million set aside for plaintiffs’ attorneys fees. Andrew Walter of Bloomington, Ill. and the owner of 2009 Toyota RAV4 was typical – he groused about the paltry award to each owner compared to the fees that would garnered by the attorneys. He wrote:
“The plaintiffs in the case (more than 16 million, according to Toyota’s records) are splitting $500 million. This amounts to just $31.25 per Toyota owner. This is a trivial amount, and it is not enough to even justify my time and costs incurred in writing this objection. Class action lawsuits such as this make a mockery of the American court system.”
He had lots of company among individual objectors who felt that their share of the settlement did not cover out-of-pocket expenses they occurred in repairs and lost sale revenue, particularly if they had experienced an Unintended Acceleration event. The most notable of these was Jeffrey Pepski, the owner of a Lexus ES350 who petitioned NHTSA in March 2009 to specifically investigate electronic causes of Toyota Unintended Acceleration. In February 2009, Pepski experienced a UA event while driving at high speed, in which the vehicle accelerated to 80 mph. Pepski tried pumping and pulling up the accelerator with his foot, but could not slow the vehicle. Pepski’s Lexus was equipped with a standard carpet mat, not the all-weather variety said to trap accelerator pedals. Toyota and NHTSA “investigated” his incident, which consisted of an uneventful drive in Pepski’s Lexus, and an unconvincing demonstration of carpet mat interference in which Pepski showed that the carpet could be easily dislodged. Toyota denied that anything was wrong with Pepski’s Lexus and succeeded in persuading NHTSA to shut down the investigation. NHTSA denied Pepski’s petition.
In his objection, Pepski argued that the settlement unfairly lumps individuals who experienced a UA event — and arguably suffered the greater loss — with all other owners. At the same time, the settlement gives preferential treatment to the individuals who acted as the class representatives in the suit. Further, he argued the settlement provided no special relief to those who experienced a UA and ignores altogether any owner who sold their vehicle before September 2009 and December 2010. “Many of these SUA events occurred long before September 2009 and undoubtedly impacted the proceeds received upon later disposition of the involved vehicle. The settlement further penalizes those same parties who morally feel an obligation to fully disclose their experience.”
Pepski traded his ES350 for a 2007 RX350 in June 2009.
Arguing against the plans for the cy pres funds — $30 million to be spread among five universities were Mark Chavez of Chavez & Gertler in Mill Valley, Calif., an attorney for two Maryland class members. The settlement requires Toyota to fund automobile safety research and education “related to issues in the litigation.” Unfortunately none of the proposed study topics actually covered the central defect issue: Unintended Acceleration. Instead, the settlement proposes funding a variety of studies – one focused on “driver attitudes, behaviors and levels of understanding concerning defensive driving techniques, and proper use of automotive technology.” Other studies would be centered on “the development of new active safety technologies and/or standards, as well as testing guidelines for emerging technologies,” and “general approaches to crash avoidance, human interface design, and lane departure warning/prevention and driver distraction.”
The complaints drivers have lodged about Unintended Acceleration with Toyota and the National Highway Traffic Safety Administration have nothing to do with driver distraction, lane departures or defensive driving techniques. Electronic throttle controls are not “an emerging active safety technology.” ETCS-IS-1 is an established technology that is not installed specifically as a safety feature. It is merely an alternative to a mechanical throttle cable – a means of relaying a driver’s intentions to the throttle. Not one of the topics described in the proposed settlement agreement relates to automotive design issues that may result in Unintended Acceleration caused by electronic faults. They do, coincidentally, lay the groundwork for industry financed and directed “scientific” studies that can be used in civil litigation against consumers and to cement the false notion that Unintended Acceleration events are solely caused by driver error or mechanical interference with the accelerator pedals.
Clarence Ditlow of the Center for Auto Safety, who filed an affidavit in support of the Chavez objection, points out that the Research and Education Program wouldn’t benefit the class members at all, and that driver education programs have historically been “dismal flops in improving vehicle safety.” After all, if Officer Mark Saylor, a 19-year veteran of the California Highway Patrol, with “hands on driver training” couldn’t avoid a fatal UA crash, the proposed media campaigns “will not deliver better drivers on the road,” Ditlow said. He suggested that Toyota should fix its vehicle problems instead:
“If defects in electronic throttle control systems are found and corrected, then the driver does not have to be trained for the emergency unintended acceleration event because it doesn’t occur,” he wrote. “It is far better to cure unintended acceleration rather than “targeting the symptoms of unintended acceleration.”’
Few concerns were raised about the efficacy of the countermeasure Toyota offered to some claimants. The Brake Override System will only be installed on vehicles from 2005 and later, despite the millions of other vehicles in the fleet also equipped with the automaker’s Electronic Throttle Control System Intelligent (ETCS-IS-1S-i). Left in the dust are some of the highest complaint-rate vehicles, such as the 2002 – 2006 Toyota Camry and the Lexus ES. While the extended warranty on a number of component parts may assuage some owners of earlier, ineligible models, they still face UA risks, with no remediation.
Even more frightening is the inadequacy of the Toyota Brake Override System. The primary purpose of a brake override system is to give the driver a way to limit the engine output when there is a simultaneous request to the ECM for throttle and braking. Unfortunately, the Toyota version doesn’t do that. According to Toyota, its Smart Stop Technology “automatically reduces engine power when both pedals are pressed at the same time under certain conditions.” Installed in some vehicles beginning in 2011, the override only intervenes when “the accelerator is depressed first, and the brakes are applied firmly for longer than one-half second at speeds greater than five miles per hour.” Further, “the feature doesn’t engage if the brake pedal is depressed before the accelerator pedal.” Toyota says that it designed this sequence to allow “vehicles starting on a steep hill to safely accelerate without rolling backward.” A significant percentage of Toyota consumer complaints allege UA events in parking lots that initiate at speeds less than 5 mph and when the brake is applied.
But then, the automaker didn’t design it as a fail-safe – Toyota has stated that its BOS feature is not a failsafe against Unintended Acceleration. No, Toyota’s BOS was designed to address the poor return of the accelerator pedal. It doesn’t not work in low-throttle situations – even though Toyota has acknowledged that its field experience with sticking accelerator pedals shows that this rare event occurred in very low-speed scenarios. Finally, the Toyota BOS does not work in two of the most common Unintended Acceleration scenarios and only provides a failsafe for a limited type of UA event.
Pity the poor Toyota driver riding the brake into a parking space, when the ETCS-i takes a notion to open that throttle real wide. In that very common scenario, the BOS is a POS.