A federal judge in Los Angeles has declined a request by plaintiffs lawyers in a shareholder class action to force attorneys for Toyota Motor Corp. to turn over documents that were provided to Congress, which has been investigating vehicle recalls associated with sudden unintended acceleration defects.
Instead, U.S. District Judge Dale Fischer of the Central District of California on Monday ordered the parties to reach a discovery agreement on their own within a week.
The suit, filed on Feb. 8, is the first shareholder class action to allege that Toyota’s executives and directors made false and misleading statements to shareholders regarding the defects. The recall caused Toyota’s stock price to drop from $90.42 on Jan. 21 to $71.78 on Feb. 4.
In court documents, lawyers for the plaintiff, Harry Stackhouse, had asked Fischer to lift a stay on discovery and instead order that documents relevant to the case be preserved or turned over. Under securities law, discovery is stayed in a shareholder case if a judge has yet to rule on pleading motions, such as a motion to dismiss.
To support their argument, the lawyers pointed to “serious allegations” that Toyota failed to disclose the defects. They specifically mentioned a $16.4 million fine that the National Highway Traffic Safety Administration imposed after finding that Toyota waited four months to report the defects.
via Law.com – Parties in Toyota Securities Suit Told to Resolve Discovery Fight.
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