Gov’t Fines Toyota $32.4 Million For Failing To Report Safety Defects

December 21, 2010

The US government fined Toyota $32.4 million dollars yesterday for failing to timely report safety defects related to brakes and steering. Last April, Toyota was fined $16.4 million related to its recalled vehicles. The latest fine comes less than two weeks after a federal judge tentatively allowed hundreds of lawsuits involving personal injury or wrongful death to proceed against Toyota.

The government’ April fine of $16.4 million against Toyota was issued when the automaker failed to promptly alert US regulators to safety problems concerning sticky accelerator pedals. Under federal law, automakers must notify the US government within five days of an automakers’ determination that a safety defect exists and immediately conduct a recall. Although Toyota refused to admit it hid a safety defect, it agreed to pay the April fine to purportedly avoid a lengthy battle with the government.

The latest fine of $32 million relates to two separate investigations. The first involves the recall of nearly 5 million vehicles with faulty accelerator pedals that can become stuck. Toyota claimed the recall of all weather mats, which it says could become entrapped with the gas pedal, addressed the unintended acceleration matter. However, the government subsequently found that simply removing the floor mats did not solve the safety problem. A fatal high-speed crash involving an off duty highway patrol officer and his family near San Diego prompted the government to conduct an investigation the recall. The family of four died after the officer reported his accelerator became stuck while driving a Lexus ES 350. Following a review of the crash and other data, the government concluded that Toyota failed to notify the government of the acceleration related defect in a timely manner, as required by law.

The second major governmental investigation involved Toyota’ initial recall of 2004 Hilux trucks in Japan regarding steering relay rods that could break and impair steering. Toyota first told the US government that the safety problem was limited to only vehicles in Japan and there had been no such problems in the US. However, a year later, Toyota admitted to the US government the steering defect also included US models leading to a recall of nearly 1 million US vehicles. The US government did not learn about the steering defects from Toyota, but from US consumers and lawyers.

While Toyota has agreed to pay US government fines, the company refuses to admit it has violated any US laws. The recall scandals have impacted US sales. The company has recently lost ground to both Ford and Hyundai. While Toyota’ US sales are reportedly flat this year, the rest of the car industry’ sales are up 13%.

Posted by: Chicago Personal Injury Lawyer Jason M. Kroot