Toyota braces for racketeering claims
Lawyers seeking civil damages against Toyota Motor Corp on behalf of US consumers for diminished resale value of recalled vehicles are broadening their cases to add racketeering claims against the automaker.autos Updated: Mar 18, 2010 22:02 IST
Lawyers seeking civil damages against Toyota Motor Corp on behalf of US consumers for diminished resale value of recalled vehicles are broadening their cases to add racketeering claims against the automaker.
Using federal racketeering laws to amend the consumer class-action complaints, which have grown in number to more than 80 suits in at least 40 states, exposes Toyota to much greater potential liability.
Under the Racketeer Influenced and Corrupt Organization Act, a commercial enterprise can be found liable for triple the damages for any harm caused by its fraudulent activities.
As a result, litigation that originally stood to reap more than $2 billion in damages for Toyota owners could end up costing the cash-rich Japanese automaker in excess of $10 billion, said Tim Howard, lead counsel for a team of law firms handling about half the cases.
Each of the revised lawsuits is “a much more robust and thorough complaint than the first rounds because of how the evidence has evolved since then,” Howard said.
A Toyota spokesman could not be immediately reached for comment on Wednesday. The automaker has declined to comment on pending litigation.
The updated complaints draw on numerous documents and congressional testimony by Toyota executives to make the case that the company was aware of unintended acceleration problems in its vehicles for several years, even as it continued to promote defective cars as safe and reliable.
First Published: Mar 18, 2010 22:01 IST