Toyota Agrees to Pay $1.2 Billion Federal Penalty Over Safety Issue that Killed Family of Four

United States Attorney General Eric Holder announced in March 2014 that Toyota Motor Corp. agreed to pay a $1.2 billion federal penalty for misleading the American public and regulators about a safety issue that killed a family of four. The penalty is the largest ever imposed by the United States on a car manufacturer. The settlement stems from an unintended acceleration issue in Toyota and Lexus vehicles. The issue is caused when a car’s floor mat pushes down on the accelerator, causing the vehicle to suddenly move forward at a high rate of speed. The issue is also caused by “sticky pedal,” when the accelerator becomes stuck in a partially depressed position.

In the settlement, the Japanese automaker admitted that it mislead the public and federal regulators when it stated that it had “addressed” the “root cause” of the accelerator problems in 2009. The company also agreed to have an independent monitor oversee their public statements and safety reports issued to regulators.

The issue came to light in August 2009 when a family of four was killed in San Diego after the accelerator of the Lexus they were driving became entrapped by the floor mat. According to a report released by the U.S. Department of Justice, “A 911 emergency call made from the out-of-control vehicle, which was speeding at over 100 miles per hour, reported, ‘We’re in a Lexus…and we’re going north on 125 and our accelerator is stuck…there’s no brakes…we’re approaching the intersection…Hold on…hold on and pray…pray.’ The call ended with the sound of the crash that killed everyone in the vehicle.”

The investigation which resulted in the $1.2 billion settlement was conducted by FBI agents in New York. The law enforcement agency began looking into Toyota’s handling of the safety issue in 2010. According to Attorney General Holder, one criminal charge alleging wire fraud was filed against the automaker. However, the charge will be dismissed if the company follows the terms of the settlement after three years.

Commenting on the case, FBI Assistant Director George Venizelos stated that Toyota’s fraudulent behavior cost people their lives. He stated, “Toyota put sales over safety and profit over principle. The disregard Toyota had for the safety of the public was outrageous. Not only did Toyota fail to recall cars with problem parts, they continued to manufacture new cars with the same parts they knew were deadly.”

Holder remarked that Toyota’s “conduct was shameful.” He further stated, “When car owners get behind the wheel, they have a right to expect that their vehicle is safe. If any part of the automobile turns out to have safety issues, the car company has a duty to be upfront about them to fix them quickly, and to immediately tell the truth about the problem and its scope. Toyota violated that basic compact.”

Justice Department Announces Criminal Charge Against Toyota Motor Corporation and Deferred Prosecution Agreement with $1.2 Billion Financial Penalty

Toyota to pay $1.2 billion federal penalty, criminal charges filed,

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