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Toyota's $1.2B Settlement to Resolve Criminal Probe

By Brett Snider, Esq. on March 19, 2014 | Last updated on March 21, 2019

Toyota is slated to pay $1.2 billion to resolve a criminal probe by the U.S. Department of Justice over safety issues.

The car manufacturer admitted it concealed and misled consumers regarding safety defects in its vehicles, two of which caused unintended acceleration, reports Reuters. The acceleration defect was blamed for the deaths of a California Highway Patrol officer and his family -- allegedly caused by unintended acceleration in his Lexus.

How does this new settlement square Toyota with its customers and the federal government?

With Settlement, Toyota Avoids Criminal Penalties

Much like the criminal probe that is now facing General Motors, Toyota has spent the last four years dealing with the DOJ regarding safety issues it likely should have revealed to consumers and to federal regulators. Under federal law, it's a crime to intentionally mislead federal safety officials with regard to car-safety issues, and it can mean up to 15 years in prison.

The DOJ probe focused on whether Toyota had "provided false or incomplete statements to the National Highway Traffic Safety Administration," reports USA Today. More specifically, federal investigators were looking into how the company communicated with NHTSA regulators regarding "sticking" accelerators and floor mats which trapped gas pedals. Both of these defects prompted massive recalls beginning in 2009.

Christopher P. Reynolds, Toyota's Chief Legal Officer, stated that while the company has worked to address these safety issues, the record-setting $1.2 billion settlement is key to "putting this unfortunate chapter behind us."

More Civil Suits Linger

This settlement with the DOJ only hopes to resolve any criminal investigation into the company for the safety defects, it does not foreclose its civil liability.

In the case of the California Highway Patrol officer, Toyota paid $10 million to settle his case but did not admit fault for the crash which killed him and his family. Toyota also paid $1.1 billion to settle purely financial claims with customers who claimed that the safety defects decreased the value of their Toyota, Lexus, and Scion vehicles.

Yet with all these settlements, there are still civil cases pending for Toyota. Having settled the economic damage claims, Toyota still must address the more than 300 lawsuits relating to the acceleration defect -- some of which deal with physical injuries and deaths.

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