Toyota reaches settlement with Michigan

LANSING- Attorney General Bill Schuette today announced a $29 million national settlement with Toyota Motor Corporation and its related North America entities over allegations Toyota concealed safety issues related to unintended acceleration.
“This settlement ensures Toyota drivers can have confidence in the safety of the vehicles they drive,” said Schuette. “It is unfortunate that it took such massive recalls to implement the consumer safety protections and controls necessary to ensure this will never happen again.”

Under the terms of the settlement with Michigan and 28 states, Toyota will pay a total of $29 million to settle consumer protection claims. Michigan’s share of the settlement is $1,645,802.

The company must also provide additional restitution and incentives to vehicle owners affected by unintended acceleration safety recalls. In Michigan, 56,660 drivers were affected by floor mat recalls issued by Toyota from 2009 to 2010. As a result of the settlement, Toyota will be restricted from advertising the safety of vehicles without sound engineering data to back such safety claims.

In a complaint filed today along with the settlement agreement in Ingham County Circuit
Court, Schuette alleges Toyota engaged in unfair and deceptive practices when it failed to disclose known safety defects with accelerator pedals in a timely fashion. Beginning in 2010, the Michigan Attorney General’s office launched an investigation with other state attorneys general.

The investigation determined poor communication between Toyota’s headquarters in Japan and Toyota’s United States holdings were partially responsible for Toyota’s failure to timely report known safety issues.

During settlement negotiations, emphasis was placed on ensuring changes in the corporate culture and corporate chain of command to enhance Toyota’s responsiveness to regulatory agencies responsible for vehicle safety the United States. As a result, Toyota has agreed to significantly change the safety culture within the company’s United States operations.

Toyota will ensure that officials and officers of its United States operations have timely access to information and the authority to fully participate in all decisions affecting the safe operation of Toyota vehicles advertised and sold in the United States. The requested culture and chain of command changes will also improve safety issue related communication between Toyota’s holdings in the United States and Toyota’s other global holdings.

Schuette noted that the agreed changes in Toyota’s corporate communications and safety decision making chain of command will allow the company to move forward in a positive manner with improved responsiveness to consumer safety concerns.

In addition, the settlement provides that Toyota is: Prohibited from reselling a vehicle it reacquired with alleged safety defects without informing the purchaser about the alleged defect(s) and certifying that the reacquired vehicle has been fixed; Prohibited from misrepresenting the purpose of an inspection or repair when directing consumers to bring their vehicles to a dealer for inspection or repair; and, Required to exclude from the “Toyota Certified Used Vehicles” or “Lexus Certified Pre-Owned Vehicles” categories any vehicle acquired through lemon law proceedings or voluntarily repurchased by Toyota to ensure customer satisfaction.

If consumers have questions about their Toyota or Lexus vehicles or the recalls that resulted in this investigation and settlement, they can contact Toyota or Lexus directly. Consumers with questions about Toyota vehicles may call 1-800-331-4331. Consumers with questions about Lexus vehicles may call 1-800-255-3987. Both lines are staffed from 8:00A.M. to 9:00P.M. Monday through Friday, and from 10:00A.M. to 7:00P.M. on Saturday.

Michigan played a lead role on the Executive Committee of states that investigated the recalls. The following states and U.S. territory participated in today’s settlement: Alabama, American Samoa, Arizona, Arkansas, Colorado, Connecticut, Florida, Illinois, Iowa, Kansas, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Virginia, Washington and Wisconsin.