April 19, 2010 — federal safety regulators said that Toyota agrees to pay a record $16.4-million fine for hiding safety defects related to sudden acceleration, but will stop short of accepting full legal responsibility for purposely withholding safety information. The National Highway Traffic Safety Administration announced April 5 that it would seek to penalize Toyota the maximum amount it is allowed by law to levy. This is by far the largest penalty ever levied by the NHTSA. The previous largest federal penalty paid by an automaker was $1 million, levied against General Motors in 2004 for delaying a windshield wiper recall.
The penalty is the largest the government could assess under a 2000 auto safety law enacted after a massive recall of Bridgestone/Firestone Inc. tires. Consumer advocates have pressed lawmakers to increase the penalties, arguing that they fail to act as a suitable deterrent. Without the cap, government lawyers said Toyota could have faced fines up to $13.8 billion.
“By paying the full civil penalty, Toyota is accepting responsibility for hiding safety defects from NHTSA in violation of the law”, a senior Transportation Department official said.
Even if Toyota does not formally admit guilt, federal officials said, paying the sizable fine would indicate that the automaker broke the law, and Plaintiff attorneys have said they plan to use the fine as evidence in litigation. Toyota faces scores of personal-injury and class-action lawsuits alleging that safety defects in its vehicles have caused crashes, injuries, and fatalities.
“In the court of public opinion, paying the fine speaks volumes. But at the end of the day, the fines are simply background noise in terms of the civil litigation,” said Richard Arsenault, a plaintiff’s attorney in Alexandria, La. “What’s really important are the facts that were the catalyst for the fines.”
Toyota said it agreed to the fine to avoid a lengthy legal battle but denied the government’s allegation that it broke the law. In a statement, Toyota acknowledged “that we could have done a better job of sharing relevant information within our global operations and outside the company, but we did not try to hide a defect to avoid dealing with a safety problem.”