Toyota Motor Corp. has agreed to pay more than $1 billion to settle multi-district litigation over financial losses associated with acceleration problems reported in some Toyota and Lexus vehicles.
The Japanese car maker and plaintiffs lawyers filed a copy of their proposed settlement Wednesday in federal court in Orange County.
Under the settlement, Toyota agreed to pay $250 million to compensate class members for economic losses suffered because they sold or traded in a vehicle or terminated a lease during a period when the car’s value was diminished due to negative publicity.
In addition, Toyota has agreed to provide free installation of brake override systems for many Toyota and Lexus models — a benefit expected to cover more than three million cars at an estimated expense of roughly $400 million. For car owners not eligible for the free system upgrade, Toyota agreed to establish a $250 million fund in lieu of the installation.
The settlement also provides for enhanced customer support to class members, such as extended warranties for vehicle repairs, and a $30 million program to fund automobile safety research at universities and driver education.
The settlement does not resolve pending personal injury cases.
Plaintiffs lawyers placed the total value of the settlement at roughly $1.3 billion, calling it “a landmark, if not record, settlement in automobile defect class action in the United States.”