7.4 Million Toyota Vehicles Recalled for Power Window Control Fire Hazard

On October 10, 2012, Toyota Motor Corp. announced a worldwide safety recall of over 7.4 million vehicles, including approximately 2.5 million vehicles sold in the U.S., for a fire hazard associated with the power window controls. The recall is the result of an investigation launched in June 2012 by the United States National Highway Traffic Safety Administration (“NHTSA”).  Furthermore, this action by Toyota, which follows shortly after its 2009-2010 recall of several million vehicles concerning unintended acceleration issues, represents one of the largest recalls in the company’s history.

Approximately a dozen of Toyota’s models are impacted by the recall, affecting model years ranging from 2007 to 2009. According to Toyota, the driver’s side power window controls in the recalled vehicles may experience a “notchy” or sticky feel during operation. Furthermore, Toyota advises that this condition “may be caused by an uneven application of the grease” used to lubricate the window controls during the supplier’s switch assembly process. Attempts by individuals to alleviate the issue by applying commercially available lubricants can cause smoke and/or fire due to the overheating and/or melting of the switch assembly.

Toyota models affected by the recall include noted brands such as the RAV4, Camry, Camry Hybrid, Highlander, Highlander Hybrid and the Corolla. Additionally, between 2006 and 2009, Toyota produced a number of Pontiac Vibes for General Motors (“GM”) under a production agreement. Given the fact that the Pontiac Vibe shares the same body and component parts manufactured for the Toyota Matrix, it is expected that additional action will be taken by GM with respect to this vehicle.  Yesterday, it was reported that GM will be sending notifications to the owners of over 47,000 Pontiac Vibes affected by this issue. If you have a vehicle fire case involving a Toyota or Pontiac Vibe, you should consult Toyota’s recall notice or contact Pontiac Customer Care at: 1-800-762-2737.

 

MOVING UNINTENDED ACCELERATION CLAIMS FORWARD: SUBROGATION POTENTIAL FOR TOYOTA'S 8.1 MILLION RECALLED VEHICLES

Toyota’s unprecedented recall of some 8.1 million vehicles will impact consumers, businesses, and their insurance carriers all over the country.  Since 1999, an estimated 2,000 complaints of sudden unintended acceleration in Toyota and Lexus vehicles have been reported to the National Highway Traffic Safety Administration ["NHTSA"].  On February 9, 2010, Toyota issued a global recall of its 2010 Prius hybrid after over 100 complaints of “delayed brake performance” were filed with the NHTSA.   [See, timeline of recalls.]

Damages to persons and property as a result of these apparent defects will result in numerous insurance claims scattered throughout the fifty states.  The breadth of this recall presents significant subrogation and recovery potential.  But the potential complexity and fragmentation of claims raises obstacles to efficiently and effectively prosecuting many separate cases. 

Mutual cooperation agreements allow carriers to maximize recovery while minimizing and sharing expenses.  Cooperation allows for the appointment of review masters and experts to determine liability and damages related to prior, existing, and future claims.  These claims may include payments to insureds for property damage, personal injury, worker’s compensation benefits, business interruption, and loss of goodwill.

It is anticipated that the insurance industry will act quickly and expediently to review past and existing claims related to matters that involve Toyota vehicles.  Given the expanse of the recall effort by the automaker and the efforts directed by Toyota to rectify manufacturing and design defects, it is possible that the automaker will also seek a forum for cost effective and expedient resolution of claims related to the defective vehicles. 

The availability of multi-district litigation modules and mutual cooperation agreements combined with the efforts of the automaker will effectively endow both the insurance industry and the automaker with a viable alternative to multiple forum litigation.