If you watch the news about defective autos and auto parts as closely as our Missouri product liability lawyers do, you know Toyota was in a lot of trouble several years ago for alleged defects that led to episodes of unintended acceleration. Those cases are largely out of the news now, but I was interested to see another case involving an alleged defect in Toyota vehicles: anti-lock braking defects that increased stopping distances. In Kramer et al. v. Toyota Motor Corp., the Ninth U.S. Circuit Court of Appeals ruled that Toyota entities cannot compel a putative class of Toyota owners to arbitrate their claims that Toyota failed to warn them about the defect in the ABS or fix it, resulting in numerous consumer protection claims. The car manufacturer had argued that the case should go to arbitration. The plaintiffs are a class of people who own a 2010 Prius or a 2010 Lexus HS 250h. In February of 2010, their cars were recalled to update the ABS software to fix the braking problem. Their claims include violations of California’s consumer protection statute, unfair competition, false advertising, breach of contract and breach of implied warranty. Their purchase agreements with the dealerships where they bought the cars include clauses allowing either party to choose arbitration and requiring them to give up their right to participate in class actions, including class-action arbitration. After the Supreme Court ruled in AT&T Mobility v. Concepcion that class-action waivers may be enforceable, Toyota moved unsuccessfully to compel arbitration. The district court ruled that Toyota was a nonsignatory and therefore could not enforce the contracts, and also that it had waived arbitration by vigorously litigating the case. The Ninth Circuit upheld that decision. Toyota’s first argument was that the contracts required questions about the contracts themselves to be submitted to arbitration. The court rejected this, saying that the terms of that contract were expressly limited to signatories to the contract—who did not include Toyota. The court next rejected an argument that arbitration should be compelled because the plaintiffs should be equitably estopped from avoiding it, because they had enjoyed the benefits of the contract. To decide this, the court looked at California state law and ultimately decided there was no need for equitable estoppel. The claims against Toyota rely on the existence of the purchases, the court agreed—but it disagreed that the claims rely on the purchase contracts. Going through each claim, it found no reliance on the contracts in the claims’ representations about Toyota’s marketing, and not enough relation between the claims and the contract. As a St. Louis auto product liability attorney, I’m pleased to see that the court rejected this appeal. Large companies like Toyota spend a lot of money attempting to avoid class-action litigation, even to the point of filing long-shot appeals. By rights, they should be spending the same money correcting mistakes that make their vehicles unsafe. If the plaintiffs’ allegations are true, the company knew ahead of time that there was a problem with the brakes—a problem that makes the brakes less effective is a serious safety concern. It costs money to fix that problem, but as Toyota has discovered over the past few years, it costs a whole lot of money to defend lawsuits as well. As a southern Illinois car accident lawyer, I hope the company prioritizes safety the next time it has a defect concern. If you or a loved one suffered a serious injury in an accident caused by a defective car or car part, don’t wait to call Carey, Danis & Lowe for a free consultation. You can reach us through our website or call 1-877-678-3400 today. Similar blog posts: Product Liability Case Against Ford Ends When High Court Declines to Overturn Ruling – Stokes v. Ford Motor Co. South Carolina High Court Reaffirms Preemption in Defective Auto Glass Case – Priester v. Cromer Eighth Circuit Affirms Ruling in Seatbelt Defects Auto Product Liability Lawsuit – Nemmers v. Ford Motor Co.
