Toyota: withheld records, class actions, document reviews, and more

As we reported yesterday (along with 8 gazillion other media reports) ABC News had reported a few weeks ago that a former Toyota product liability lawyer had accused Toyota of hiding information in product liability suits.  The House Oversight Committee subpoenaed his documents and found that they showed Toyota hid internal data recording Toyota testing data, collected in an electronic “Books of Knowledge.”   The chairman of the committee (Ed Towns) had written the president of Toyota Motor Company US (Yoshimi Inaba) for more information. 

Note:  a hat tip to Posse List members Lisa Krause and Peter Catania who were in attendance at the House hearings, plus “Mr X”, a Capitol Hill staffer and long-time Posse List member who provided much of the information herein but prefers anonymity. 

All but one of these documents pertain to rollover suits, not the accelerator problem which triggered the fury. But given that Toyota hasn’t given Congress records from all the extensive testing that, it claims, prove that Toyota’s accelerators don’t have electronic or software issues the exposure of these “Books of Knowledge” are going to cause Toyota some big headaches going forward.

The document in question were from attorney Dimitrios Biller.   The committee reviewed the documents and found evidence that Toyota “deliberately withheld relevant electronic records that it was legally required to produce in response to discovery orders in litigation”.    Biller was a Managing Counsel in the Product Liability Group of Toyota Motor Sales (USA) from April 2003 to September 2007.   As the committe letter noted “this was a very senior position, in which he led the defense of some of the largest tort cases filed against Toyota, particularly “rollover” cases involving seriously injured victims, including quadriplegics”.

As Marc Lee commented on his blog following the Toyota imbroglio “how helpful for the plaintiff lawyers preparing to sue Toyota that Mr. Biller has made it clear that these Books of Knowledge can be searched by vehicle and component part”.   And Lisa and Peter reported the hearings were packed with the plaintiffs’ bar.

So this week’s congressional hearings on Toyota’s safety problems were a lot more than the mere public shaming we’ve come to expect from recent corporate floggings on Capitol Hill.  They yielded crucial insights that determined how Toyota’s recall crisis developed, and will affect how Toyota digs itself out.   Favorite tidbit:  internal documents that show Toyota boasted of saving $100 million by limiting a 2007 floor-mat recall to just 55,000 vehicles.

Obviously Toyota says it’s fought to keep the documents sealed because they contain information protected by attorney-client privilege, but also confidential trade secrets.  

As far as work for e-discovery vendors, staffing agencies and contractor attorneys — it sure looks like work is coming for both the plaintiffs and defendants sides.   We suspect the Toyota case(s) will follow the pattern of previous product liability cases that employed legions of contract attorneys such as the Bridgestone/Firestone tire case (the treads on tires mounted on Ford Explorers, Mercury Mountaineers, and Mazda Navajos were separating from tires and causing rollovers if the SUVs were moving quickly),  the Vioxx case (Merck launched its signature arthritis drug in 1999, and Vioxx proved to be a blockbuster.  Unfortunately, it also later proved to cause elevated chances of heart attack or stroke in its users), and the Guidant implantable defibrillators case (flaws in electronic devices installed in patients’ chests to control irregular heart activity).

On the Toyota side, everybody seems to be banging on the door of  Alston & Bird, King & Spalding — and maybe Morgan Lewis.  Alston & Bird and King & Spalding have been Toyota’s go-to firms for major pieces of litigation over the last two years, with Alston recently overtaking King & Spalding as the company’s preferred counsel.  But it was King & Spalding that Toyota turned to when facing Congress, specifically Theodore Hester, a partner in the firm’s D.C. office  …  who was in all the photos and sitting just in front of Peter.  The firm has a long history of representing corporations under congressional investigation.  Hester is also registered to lobby for defense contractor Lockheed Martin Corp., pharmaceutical companies and others.  And Hester was involved in another inquiry into auto safety when he helped counsel Bridgestone/Firestone after the company recalled 6.5 million tires, the case we cited above.

The Morgan Lewis connection?  Christopher P. Reynolds, group vice president and general counsel for the Legal Services Group of Toyota Motor Sales (TMS), U.S.A., Inc., was a partner and trial lawyer at the firm’s New York City office.

Then there is the plaintiff’s side.  In a nutshell:

1.  Northeastern University School of Law professor Tim Howard is the coordinator of something called Attorneys Toyota Action Consortium, an umbrella group of attorneys from two dozen firms in 16 states (and counting) that’s preparing a monster class action against Toyota.   The group will ask a federal judge for permission to consolidate its cases into one class action at a hearing on March 25 in San Diego.  

2.   A team of 15 plaintiffs firms has already filed a $1 billion suit seeking class action status in federal court in Florida, and that team plans to file about three dozen more suits in the next week or two in 25 states.  Those suits will be filed in the name of consumers who say Toyota should cover car payments or compensate for lost resale value.  

3.   And all of this doesn’t begin to cover the pile of suits coming from consumers who claim they or their relatives were injured or killed in crashes linked to the bad gas pedals. (Many of these suits–if not all of them–will also name CTS Corp., the company that manufactured the key components of the gas pedals.)

4.   On top of that, the New Orleans plaintiffs firm Kahn Swick & Foti is investigating a possible action on behalf of shareholders who stand to lose as Toyota’s stock price continues to plummet.

Other “fun facts” on the Toyota Feeder Fest:

1.   Audi’s experience with faulty accelerator issues:   Audi went through this in the 1980s and saw its domestic sales fall by more than 80 percent through the late 1980s and into the 1990s.   Sales didn’t return to the early 1980s level until 2000, and a class action case related to the bad gas pedals is pending to this day.

2.  Coming soon: “The Toyota Defense”.   Now, every time a Toyota is involved in an accident, the defense attorneys will attempt to “prove” that the driver was not at fault because the accelerator overrode the brake system. Blood alcohol content? Circumstantial. Distracted by texting or cell phone conversation? Circumstantial.  

Example:  ever since his 1996 Toyota Camry shot up an interstate ramp, plowing into the back of an Oldsmobile in a horrific crash that killed three people, Koua Fong Lee insisted he had done everything he could to stop the car.  A jury didn’t believe him, and a judge sentenced him to eight years in prison. But now, new revelations of safety problems with Toyotas have Lee pressing to get his case reopened and his freedom restored. Relatives of the victims — who condemned Lee at his sentencing three years ago — now believe he is innocent and are planning to sue Toyota. The prosecutor who sent Lee to prison said he thinks the case merits another look.  Lee’s accident is among a growing number of cases, some long resolved, that are getting new attention since Toyota admitted its problems with sudden acceleration were more extensive than originally believed. Numerous lawsuits involving Toyota accidents have been filed over the recent revelations, and attorneys expect the numbers will climb.

So that’s the Toyota story so far, in a nutshell.   We’ll have more as the situation develops.  A couple of points:

1.  There will be a spike in domestic requests for Japanese fluent attorneys (duh).   Anything we receive will post to our Japanese language list (to register click here) and our master language list (to register click here).

2.  We have already been asked about contract attorneys available in Asia and those positions will post to our Posse List sia list (to register click here).

3.  We won’t deluge you with emails about the Toyota case unless there is a significant development/movement.   But we will continue to post Toyota developments on our Twitter page here http://twitter.com/PosseList  and we’ll post significants stories on our Totota Litigation page which you can access here.  We will also post background info/resources on that page.

Any questions/issues/comments, email us at manager@theposselist.com