From the NLJ
Potential class members in the U.S. sudden acceleration litigation against Toyota Motor Corp. have filed objections to the proposed $1.6 billion settlement reached on behalf of consumers asserting claims for economic damages.
In documents and letters filed with the court, more than a dozen objectors raised various problems with the deal, including a proposed $30 million cy press award for automotive accident research; the $200 million in attorney fees sought; and the potential release of claims in companion litigation over anti-lock braking system defects in Prius vehicles.
The deadline to object to the settlement was Monday. U.S. District Judge James Selna in Santa Ana, Calif., has scheduled a final approval hearing for June 14.
The settlement, announced on December 26, has a total estimated value of $1.63 billion, according to plaintiffs’ attorneys. It includes $757 million in cash, of which $250 million would go to consumers whose vehicles lost value and $250 million to consumers whose vehicles are not eligible for installation of a brake override system, intended to correct potential sudden acceleration problems.
"These are excellent recoveries in any litigation and a truly exceptional recovery in a class action fraught with as much risk as this one," Steve Berman, managing partner of Seattle’s Hagens Berman Sobol Shapiro, and Marc Seltzer, of Susman Godfrey in Los Angeles, co-lead counsel of the economic loss cases on the plaintiffs steering committee, wrote in the final approval motion.
The rest of the settlement’s $875 million value is based on the estimated costs of installing brake override systems in a projected 3.5 million vehicles, and a customer-support program that would provide repairs and adjustments in a predicted 16 million vehicles. The claims deadline is July 29.
Several objectors took aim at the cy pres award the deal would channel to five universities for research associated with automotive safety and related issues. A cy pres distribution is established from unclaimed money remaining after class members have been paid.
"As the specific allegations of the complaint demonstrate, this lawsuit is not about defective drivers or driver error caused [unintended acceleration]," wrote Mark Chavez of Chavez & Gertler in Mill Valley, Calif., an attorney for two Maryland class members who filed an objection on May 10. "Indeed, driver error is Toyota’s defense to responsibility for the defects in its vehicles."Such components, he wrote, "would be an inappropriate use of cy pres funds, and should be rejected by the Court."
In a May 13 objection, attorney Paul Kiesel of Kiesel + Larson in Beverly Hills, Calif., interim liaison counsel for the plaintiffs in separate litigation against Toyota over anti-lock braking system defects in Priuses, said the settlement could improperly release Toyota from claims in his case.
Kiesel acknowledged that plaintiffs in the Prius ABS multidistrict litigation pending before U.S. District Judge Cormac Carney in Santa Ana assert distinctly different defects, but said the case involves the same Prius model years affected by sudden acceleration: 2004 through 2009. The underlying complaint in the sudden acceleration case also mentioned brake defects in Prius vehicles.
"It’s not our intention to derail this settlement in any way shape or form; it’s merely to have a clear statement from Judge Selna and/or the litigants themselves that the scope of the release is not intended to and does not resolve the claims we’ve asserted in our litigation," he wrote.
Carney is scheduled to hear class certification arguments in that case on June 17, Kiesel said.
Many class members complained that the amount they would receive pales in comparison to the costs they incurred, particularly if they experienced sudden acceleration. Others objected to the attorney fees. One Pennsylvania couple said the fee request reminded them of John Grisham’s novel The Litigators. "As a class member there is little else of value to methe pool of Finley, Figg & Zinc-type’ legal firms appear to be suckling at the bar on this case, leaving just crumbs for the class," Henry Senatore wrote on behalf of himself and his wife in a March 19 letter to the court. "It’s quite distasteful to need to be a member of the class in this obvious attempt to milk Toyota."
Berman and Seltzer argued that the fee request represents 12.3 percent of the estimated value of the deal. The leading firms, whose attorneys billed $150 to $950 per hour, spent more than $100 million litigating the case.
The class action, they underscored, was "fraught with risk." The U.S. National Highway Traffic Safety Administration, for example, had identified no electronic defect in Toyota vehicles, and plaintiffs’ software experts had been unable to replicate a sudden acceleration incident. Furthermore, had plaintiffs lost two interlocutory appeals before the Ninth Circuit, the case would have been "gutted," they wrote.
Berman and Seltzer acknowledged that 45 objections and 1,085 requests for exclusion have been filed. But the case, they added, consists of more than 22.6 million class members.
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