Thursday, March 25, 2010

Toyota Faces The Lawyers

In San Diego, 150 attorneys gather to plot strategy for what could be a deluge of lawsuits to come against the automaker.
By Tony Perry

March 25, 2010

Reporting from San Diego

First came the reports of sudden acceleration, then the recalls. And now, inevitably, the lawyers. Lots of them.

With Toyota Motor Corp. already facing scores of lawsuits stemming from alleged sudden acceleration incidents, about 150 lawyers gathered Wednesday for an all-day event to discuss litigation strategy over claims of deaths and injuries in accidents as well as the loss of resale value of used Toyota vehicles.

Those attending, including veterans of class-action litigation, didn't shy away from portraying the situation as an opportunity of historic proportions.

"We've got a wonderful opportunity to fight a multifront war," said W. Mark Lanier of the Lanier law firm of Houston, flashing on a screen a map suggesting the Allies' assault on Nazi Germany during World War II.

How much money is involved?

"A hell of a lot," said San Diego lawyer Kerry Steigerwalt, whose firm already has Toyota clients.

Indeed several lawyers at the event, hosted by HarrisMartin Publishing, a Pennsylvania-based publisher and website operator specializing in the legal and insurance industries, have clients suing Toyota. Others there were hoping to attract such clients.

A seven-judge panel known as the U.S. Judicial Panel on Multidistrict Litigation is currently weighing whether to combine the disparate class-action suits and, if so, where to send the mega-case. But other suits will fall outside that category, raising a raft of issues.

Toyota declined to comment on the lawyer event.

"It regards pending litigation," spokesman Mike Michels said.

One of the themes of the event, held at the Westin Hotel in downtown San Diego, was that Toyota has erred repeatedly in dealing with the situation. Among the claimed missteps: stalling on fixing problems, stonewalling customers seeking help, and issuing a late and unsatisfying apology.

Toyota's strategy, said Jimmy Faircloth of the Faircloth law group in Alexandria, La., was classic old-school: hope the bad news goes away. When it didn't, a carefully parsed apology followed.

"I don't care if it's Tiger Woods, Bernie Madoff, or Toyota, if an apology comes late it's going to be seen as phony," Faircloth said.

Toyota's approach, said Ken Seeger of the Seeger, Salvas law firm in San Francisco, has been "purely market-driven, cold-hearted, insincere."

"They tried to declare they had the problem solved when they really didn't know what the problem was," he said.

If the engineering issues involved in the Toyota cases are complex, so too are the legal ones. Lawsuits have been filed in at least 19 legal jurisdictions.

The lawyers weighed whether or not the cases should be lumped together and if so, where and with what judge?

Different states have different takes on damage limits, statutes of limitations, and warranties.

"That's going to be a hot issue," said Elizabeth J. Cabraser of Lieff, Cabraser, Heimann and Bernstein of San Francisco, a veteran of numerous major cases, including litigation over breast implants.

Not every judge has the time or the skills to deal with a case of such complexity that involves multiple jurisdictions and mountains of technical and legal documents, the lawyers agreed.

"This needs a smart, creative judge to do this, preferably one who has done it before," said Shawn G. Foster of Davis, Bethune and Jones of Kansas City, Mo.

Lanier, who recently won $54-million jury verdict for a paralyzed heavy-equipment operator, said he already has a former Toyota employee ready to testify that the corporation lies as a matter of strategy "and he's got documents to back it up."

He charged that Toyota didn't put enough back-up systems in its vehicles.

"The commode in my home has more redundancy than their cars," he said.

With the possibility looming of hundreds of lawsuits, one tactic might be what is called a bellwether approach -- several cases bundled together. The verdict can goad litigants to settle other cases without trial.

"I'm a major fan of bellwether cases because I think it leads to global settlements," said Dawn Barrios of Barrios, Kingsdorf, and Casteix of New Orleans.

The session was held just a few miles from where two of the most highly publicized incidents involving Toyota vehicles occurred: the deaths of an off-duty CHP officer and his family in the crash of a speeding Lexus, and the case of a driver who said he had to struggle to stop his runaway Prius on Interstate 8.

Toyota has issued more than 10 million recall notices recently because of supposed accelerator pedal and floor mat problems and other safety issues. The conference "will help us all be on the same page," said Steigerwalt. "What we don't want is all of us fighting different battles with Toyota."

Although the session was open to all, no Toyota lawyers were known to have attended. Some of the lawyers who were there felt that Toyota, after an initial case or so, would settle other cases. But other lawyers predicted years of litigation, with Toyota concerned about how losing or settling cases will affect its stock price.

"It's not going to be just resolved," Lanier said. "It's going to be tried, tried and tried."



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