Toyota to pay $3B to pickup owners over rust
Washington — Toyota Motor Corp. has agreed to pay more than $3 billion to compensate owners of trucks with frames that are likely to rust through.
The payouts will go to approximately 1.5 million owners of certain Tacoma, Tundra and Sequoia trucks under the agreement approved by U.S. District Judge Fernando M. Olguin in a Los Angeles court on Wednesday. The proposed settlement includes Toyota Tacomas from model years 2005-2010, Tundras from model years 2007-2008 and Sequoia vehicles from model years 2005-2008.
Toyota is being tasked with paying between $1.75 million and $2.5 million to notify owners of the affected vehicles, as well as $9.75 million for attorneys’ fees and up to $150,000 in costs and expenses related to the court cases. The settlement also includes a proposed $2,500 incentive award for each class representative that is named in the case.
Toyota said the final amount of the settlement will be determined by attorneys for plaintiffs that are included in the settlement.
The Japanese automaker was accused of designing, manufacturing, distributing, advertising and selling “vehicles that allegedly lacked adequate rust protection on the vehicles’ frames that would allegedly result in premature rust corrosion,” according to the lawsuit that was initially filed by a Tacoma driver in Arkansas. The lawsuit initially focused on the Tacoma pick up, but it was later amended to include the company’s Tundra and Sequoia trucks by plaintiffs in California, Florida, Ohio and Louisiana.
Under the agreement, owners of the affected Toyotas will be able to have their frames inspected for up to 12 years from the first use of their vehicles and, if appropriate, have a frame replacement.
The settlement agreement states that the deal is not “an admission or concession of any liability or wrongdoing whatsoever” on behalf of Toyota.
Toyota said in a statement “we want our customers to have a great ownership experience, so we are pleased to resolve this litigation in a way that benefits them and demonstrates that we stand behind the quality and reliability of our vehicles.”
“The ultimate size of the settlement depends on a number of factors, including the valuation of the benefits offered under the settlement,” the company said. “Plaintiffs’ counsel will have to explain how they’re reaching their valuation numbers. More important to us is that the agreement will deliver that value to our customers.”