Lawyers from around the country will descend on a San Diego federal courtroom today for a key early hearing in what is shaping up as a massive legal battle against the beleaguered Toyota Motor Co.
A panel of federal judges will hear arguments about whether to consolidate the more than 100 lawsuits filed against the carmaker nationally that allege Toyota is responsible for economic losses suffered by vehicle owners. The panel also will decide the crucial question of which judge should be assigned to preside over those cases.
Toyota owner Victor Andreone speaks during an interview at his home in La Mesa on Wednesday, March 24, 2010. More than 150 attorneys gathered at the “Toyota Recall Litigation Conference” Wednesday on the eve of a major federal court hearing on whether dozens of cases will be consolidated before a single judge.
A decision on where to hear the cases is important for logistic reasons and because law firms based near the selected federal court have a better chance to assume a prominent role in the litigation.
Background: More than 100 lawsuits have been filed around the nation against Toyota that claim vehicle owners suffered economic losses because of the carmaker’s massive recall campaign.
What’s happening: A panel of federal judges will hear arguments today about whether to consolidate the lawsuits, and if so, where in the United States the combined case would be heard.
What’s next: The judges are expected to make a decision within two weeks.
Toyota has been hit with a variety of suits, many seeking class-action status, from consumers who contend their cars have plummeted in value after the company recalled millions of vehicles over safety issues.
Those claims, which also now include one of civil racketeering against Toyota, could result in as much as $10 billion in damages, according to lawyers pressing the cases against the company.
Yesterday at the Westin hotel in downtown San Diego, more than 100 attorneys with lawsuits pending against Toyota gathered for a daylong conference covering issues to be raised at today’s hearing, as well as other matters in the burgeoning litigation.
The automaker also has been sued by individuals who say they have been injured or had relatives die because of sudden unexplained acceleration in some Toyota models.
Potential class-action lawsuits from shareholders, alleging that the company hid and covered up the extent of the problems in order to boost its stock price, have also been filed.
Today’s hearing in front of the little-known U.S. Judicial Panel on Multidistrict Litigation will focus on the suits alleging loss of vehicle value, although the judge who is assigned to hear the cases might end up hearing the other lawsuits against Toyota as well, according to several lawyers who have filed suits against the carmaker.
The litigation panel’s judges meet periodically in a regular rotation of cities around the country, and its session in San Diego is not related to any particular lawsuit.
Lawyers for Toyota and the plaintiffs have filed court papers identifying 19 sites, from Florida to California, where they suggest the cases should be heard.
The seven-member panel can send the case anywhere in the country. The judges weigh such factors as the caseload of a particular court, whether the location is efficient and convenient for all sides, and whether a judge with experience overseeing complex cases is available.
It is the last criteria that may be most important in the Toyota litigation, said Richard Arsenault, a New Orleans lawyer who has filed suits against the company in California, New York and Missouri.
“This is all about the judge and the qualification of the judge to handle these complex cases,” he said.
In court papers, Toyota said it wants the cases sent to federal court in Los Angeles, where the most lawsuits against the company have been filed and where the Japanese automaker’s U.S. headquarters is located. A spokesman for the company declined to comment on the upcoming hearing, citing Toyota’s policy not to comment during litigation.
In his brief to the panel, Arsenault suggests consolidating the cases in one of three places — the eastern district of Kentucky, New Orleans or Los Angeles.
The cases are not likely to be assigned in San Diego federal court, one of the busiest in the nation, even though Toyota’s problems emerged in tragic fashion here in August.
That is when a Lexus driven by California Highway Patrol Officer Mark Saylor accelerated out of control and crashed, killing the officer and his wife, brother-in-law and daughter. Relatives have filed a suit against Toyota, but it is in state court, not federal.
The crash was blamed on a floor mat that caught the accelerator in an open position. It led the company to recall 6 million vehicles in the United States and fed a cascade of complaints.
The place where these suits end up has other ramifications, said Nancy Stagg, a San Diego lawyer who has been involved in other mass-litigation cases. Law firms near the eventual destination could have an inside track on being the liaison counsel for all lawyers or could become part of the lead team spearheading the potentially lucrative legal fight.
“There is lots of jockeying going on for a specific venue among the attorneys,” Stagg said.
Another factor that lawyers weigh in advocating for a particular site is which appellate circuit would be involved as the cases move forward, said Tim Howard, a lead lawyer on the economic-loss lawsuits. Some appellate circuits are seen as friendlier to either plaintiffs or defendants in certain types of cases.
Whichever judge is picked will make critical pretrial decisions that will shape the cases, including determining whether to certify the cases as a national class action, and determining which state laws would apply to cases that are drawn from around the country. States have different laws on things such as product liability and punitive damages.
The panel is expected to make a ruling quickly, likely within two weeks. Most lawyers at the conference yesterday expected the court to agree to combine the cases, leaving the question of which judge will be assigned to oversee them as the crucial decision.