By Jon Hood
ConsumerAffairs.com
March 17, 2010
In the less than three months since Toyotas reputation for safety imploded, the company has been hit with dozens of class action lawsuits and personal injury suits from angry owners.
But on Monday, a group of consumers took litigation against the carmaker to a new level, demanding a full refund in separate cases filed in Washington state and Arizona.
When we talked with Toyota owners, they all voiced the same desire -- to drive the car back to the lot, hand them the keys and pick up a check, said Steve Berman, the lawyer handling the cases. Fortunately, we think the law allows for exactly that solution, and we are asking the courts to make it happen.
Many of the class actions filed so far have focused on the recalls devastating effect on resale values -- affected Toyotas have lost between six and 15 percent of their total value since the recall was announced in January. That plunge stands in contrast to values for other brands of used cars, which have actually increased in value. A number of suits against Toyota are demanding a cash payment equal to the amount of the decline.
Berman, of Seattle-based Hagens Berman Sobol Shaprio, takes issue with that relatively small-bore approach.
I don't know of any parent who would be willing to put their kids in a potentially unsafe car in exchange for a few hundred bucks, he said.
A statement by Hagens Berman reiterates that stance, asserting that Toyota produced vehicles so profoundly flawed with safety defects, and completely botched the recall process, that the only remedy is for owners to return the cars to Toyota.
The suits are being brought on behalf of all residents of Washington state and Arizona who own a recalled Toyota. The firm said it expects to eventually file additional cases in other states across the country.
Plaintiffs seek revocation
The plaintiffs seek to revoke their acceptance of the sales contract, and contend that Toyota breached its express warranty because the vehicles sold to Class Members were not fully operational, safe, or reliable. The class also asserts that Toyota exacerbated the breach by failing to provide safe automobiles after the problems were acknowledged.
Both suits allege breach of express warranty, breach of the implied warranty of merchantability, unjust enrichment, and violations of the warranty-governing Magnuson Moss Act. In addition to a full refund, the plaintiffs are seeking consequential damages, including the costs associated with purchasing safer vehicles, and an injunction prohibiting the sale of cars with a propensity for sudden acceleration. In the event that the full refund is not granted, the class is seeking damages equal to the diminution in value as a result of the defects.
The suits, if approved, would have a devastating economic effect on an already-battered Toyota. The decreased-value suits alone could put the carmaker on the hook for at least $3 billion. A San Diego court will decide next week whether to consolidate over 100 separate Toyota class-actions into a single case.
