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Suit: Toyota ignored defects

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Suit: Toyota ignored defects

Meanwhile, carmaker denies turning over internal documents

David Shepardson and Christine Tierney / The Detroit News

A California prosecutor filed suit against Toyota Motor Corp. on Friday, claiming the Japanese automaker knowingly sold millions of defective vehicles.

The first civil lawsuit of its kind in the United States came as Toyota told Congress that it has never turned over highly confidential internal company documents dubbed "Books of Knowledge."

The lawsuit also named Toyota Motor Sales USA and the automaker's Japanese and U.S. lending arms.

Orange County District Attorney Tony Rackauckas' action deals a fresh blow to Toyota, which is struggling to recover after recalling more than 8.5 million vehicles for sudden acceleration concerns worldwide. It seeks potentially millions of dollars in penalties and a court order blocking Toyota from selling defective vehicles.

"Rather than halt sales of products in California until it genuinely fixed the problem, (Toyota) made the business decision to continue selling their defective products," said the 18-page complaint, filed in Superior Court.

Toyota "ignored, omitted, obfuscated and misrepresented the evidence that was massive for many years" and showed "there was a serious safety defect in their vehicles."

Toyota also faces a criminal probe by a federal grand jury in New York and a civil investigation by the Securities and Exchange Commission.

Toyota had no comment.

At issue is when Toyota knew it had problems with pedal entrapment and sticky pedals.

In company documents last July, Toyota officials bragged about staving off a broader recall on sudden acceleration problems in 2007 that could have cost it more than $100 million.

The lawsuit against Toyota Motor Sales, the Japanese automaker's U.S. sales subsidiary, seeks "to enjoin them from continuing to endanger the public through the sale of defective vehicles and deceptive business practices."

Toyota could face up to $2,500 per vehicle sale, if found liable.

The automaker has recalled more than 6 million vehicles in the United States because of acceleration-related problems in several models; regulators have received more than 3,300 complaints and reports of 52 deaths since 2000 in connection with Toyotas.

The National Highway Traffic Safety Administration ordered Toyota to stop selling vehicles in January while it repaired pedals that could stick. That required it to stop selling 60 percent of its vehicles and forced the shutdown of six North American assembly plants.

Ed Higgins, co-head of the product liability practice group at Plunkett Cooney in Detroit, said Rackauckas would have to show that products sold by Toyota were so defective that they could cause irreparable injury.

Also Friday, Toyota said it has never produced confidential set of documents in any court case or to government regulators.

The existence of the Books of Knowledge was a closely guarded secret within Toyota, a former company attorney has claimed.

Toyota lawyer Theodore Hester told a congressional committee in an eight-page letter that the automaker has settled lawsuits before it was required to turn over information from the highly sensitive cache of company records.

Earlier this month, the House Oversight and Government Reform Committee obtained documents from former Toyota lawyer Dimitrios Biller.

The records included a memo, authored by Biller to his superiors at Toyota, noting that Toyota failed to produce e-mails or other electronic records in response to requests for information by plaintiffs' attorneys in liability cases.

Additionally, the committee found multiple references to secret, electronic Books of Knowledge in which Toyota engineers protected design and testing data for vehicles and parts.

Hester acknowledged the existence of the Books of Knowledge, or "BOK," and said Toyota has never turned them over to lawyers suing Toyota or to NHTSA. Hester said the Books of Knowledge are searched during civil lawsuits for any material the company is legally required to disclose.

From The Detroit News: http://detnews.com/article/20100313/AUTO01/3130317/1148/auto01/Suit--Toyota-ignored-defects#ixzz0i9yniyap

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