Toyota to Pay $1.2 Billion to Avoid Prosecution
GM isn’t the only car maker in deep trouble with federal regulators lately–Toyota recently announced that it would pay $1.2 billion to avoid prosecution for its role in 37 deaths caused by safety problems in some of its 2009 and 2010 vehicles. Specifically, Toyota’s crimes stem from a sudden acceleration problem and stuck pedals in 2009 and 2010, and recent investigation has uncovered that Toyota knew about the problem for a while prior to issuing a recall of affected vehicles. In addition, Toyota appears to have misled the National Highway Traffic Safety Administration as well as consumers about the scope and true nature of the problem.
Penalty Largest Ever Imposed on Auto Company
Toyota’s payment of $1.2 billion is the largest ever imposed on an auto company from U.S. regulators. Toyota agreed to pay the fine to settle a 4-year criminal investigation into whether it properly reported safety complaints to regulators. The agreement, which was reached with the U.S. Department of Justice, barely makes a dent into Toyota’s estimated worth but is a warning to other automobile manufacturers not to make the same mistakes. Overall, federal regulators and legal authorities say that Toyota placed its profits over consumer safety.
Toyota Attempts to Clean Up Its Act
Since the recalls and subsequent fine agreement, Toyota appears to be trying to clean up its act, at least according to company executives. Christopher P. Reynolds, chief legal officer of the North American branch of Toyota, recently stated that the car maker has made significant operational changes to improve quality control, respond to customer service complaints quicker, and strengthened regional autonomy such as decision-making. Safety regulators say that they want Toyota and other car manufacturers to learn one important thing from this large fine on Toyota: that while a recall might damage a company’s short-term reputation, lying to authorities and consumers will do far worse and longer-lasting damage.
recently named in the 2009 edition of Best Lawyer's In America, David Mittleman has been representing seriously injured people since 1985. A partner with Church Wyble PC—a division of Grewal Law PLLC—Mr. Mittleman and his partners focus on medical malpractice, wrongful death, car accidents, slip and falls, nursing home injury, pharmacy/pharmacist negligence and disability claims.