Court Dismisses First Sudden Acceleration Case Against Toyota Over Technicality

The sudden acceleration issue is still troubling Toyota, which has already paid $50 million in fines and recalled almost 8 million vehicles in the US alone in 2009 and 2010. The Japanese carmaker still has to face the lawsuits brought about by citizens and their families affected by the issue which, according to estimates, could cost the company as much as $10 billion.

However, the first sudden acceleration lawsuit lawsuit was dismissed by a federal judge who ruled that it should have been filed in Utah instead of California. The case is about Paul Van Alfen and passenger Charlene Lloyd, who were killed in 2010 when a 2008 Camry driven by Van Alfen hit a wall in Utah.

The judge ruled that the warranty claim didn’t meet the required $50,000 USD threshold for damages as the plaintiffs couldn’t count potential personal injury or punitive damages in this case.

“Plaintiffs are unable to reach the jurisdictional threshold of $50,000 in damages,” said U.S. District Court Judge James V. Selna. “The case is dismissed for lack of jurisdiction.”

“We are pleased this jurisdictional issue has been resolved and that the court agrees with Toyota that the proper forum for this case is the Utah state court”, said the company's spokeswoman Celeste Migliore.

The dismissal due to the lack of jurisdiction does not mean it's the end of the case. Mark Robinson, an attorney representing the plaintiffs, said: “I am drafting a new complaint right now in which the dealer will not be named as a defendant and everything will be cured and the suit will go forward seeking punitive damages and everything else.”

Story References: Bloomberg

 

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GM Refuses to Repair 400,000 Chevrolet Impalas, Says it's “Old GM's" Responsibility

On June 29, a woman named Donna Trusky filled a class-action lawsuit against General Motors in Detroit. The subject was a defect in the suspension rods of the 2007-2008MY Chevrolet Impala, which caused the tires to wear prematurely – in Trusky’s case, after only 6,000 miles. As it turns out, GM had warned police departments about the issue and fixed the defective rods, but it did not do the same on the civilian cars.

General Motors seeks to dismiss the lawsuit, which could cost it millions of dollars as it potentially affects more than 400,000 cars. The company's argument is that the warranty claim was honored by its predecessor, General Motors Corp, which is now called Motors Liquidation Co – or “Old GM”, after its 2009 bankruptcy and the subsequent bailout by the US government.

The “New GM”, the company claims, didn’t assume responsibility to recall the Impala, only to make repair “subject to conditions and limitations stated in express written warranties”.

In other words, the “New GM” says that Trusky is after the wrong company: the one she should be after is the now bankrupt “Old GM”. This argument held in court earlier this year in a case about the OnStar navigation system.

John Penn, former president of the American Bankruptcy Institute and currently a partner at Haynes and Boon in Texas, comments: “The question of successor liability is common for companies that go through bankruptcy.” He is also not surprised by Trusky’s predicament: “This type of issue was widely discussed during GM’s bankruptcy. The court will need to evaluate the claims to see if they fit within any cubbyhole of liability that New GM assumed”.

Story Source: The Chicago Tribune

 

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