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Lawsuits Could Cost Toyota in Excess of $3 Billion

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Miami, FLAccording to the Associated Press (AP), lawsuits related to the massive Toyota recall could cost the world's largest automotive maker $3 billion or more. As of yesterday, more than 89 class action lawsuits have been filed across the country on behalf of disgruntled Toyota owners who claim that their vehicles have suffered a loss in value since the recall for sudden acceleration.

There is the potential for more than six million Toyota to file cases claiming lost value. On March 25 a panel of federal judges will meet in San Diego to consider whether or not to consolidate a tidal wave of cases into a single jurisdiction.

The New York Times reported this morning that AP conducted interviews with experts and looked at the lawsuits as well as legal precedent. The estimate does not include potential payouts for wrongful death and injury lawsuits, which AP suggests could each reach into the tens of millions of dollars.

Tom Baker, a law professor at the University of Pennsylvania, says that even in spite of large awards for personal injury, the stakes surrounding class action lawsuits could be much higher for Toyota—and the financial consequences much more intense. ''A super-big injury case would be $20 million," says Baker. "But you could have millions of individual car owners who could (each) be owed $1,000. If I were Toyota, I'd be more worried about those cases.''

The various lawsuits began appearing at both the state and federal level when Toyota began to roll out the recalls last fall. This month, Kelly's Blue Book—the bible for used-car valuations—decided to lower the resale value of recalled Toyotas an average of 3.5 percent.

Until this point, Toyotas have been known for excellent resale value, prompting many car buyers to choose Toyota over other brands.

Tim Howard, a law professor at Northeastern University, told AP that the number of Toyota owners claiming economic damages due to the recall could reach six million. If each were awarded a conservative $500, the bill to Toyota would total $3 billion.

The National Highway Traffic Safety Administration claims 52 people have died in accelerator-related crashes so far.



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