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February 4, 2010 12:20 PM

The Toyota Rat Race Is Underway

Posted by Zach Lowe

GettyImages_96386356 The flood of litigation against Toyota in the wake of its faulty accelerator recall is going to be nearly impossible to track, as plaintiffs firms line up to file suits on behalf of injured drivers, shareholders, and owners who have seen the resale values of their cars plummet. 

A team of 15 plaintiffs firms has already filed a $1 billion suit seeking class action status in federal court in Florida, and that team plans to file about three dozen more suits in the next week or two in 25 states, according to The National Law Journal, an Am Law Daily sibling publication. Those suits will be filed in the name of consumers who say Toyota should cover car payments or compensate for lost resale value, the NLJ says. They will likely be consolidated into a massive multidistrict litigation, and Alston & Bird may have the inside track to represent Toyota. The firm recently surpassed King & Spalding as Toyota's go-to litigation counsel, and recently represented the automaker on some prior faulty accelerator suits, according to The Am Law Litigation Daily, another of our sibling publications. 

And all of this doesn't begin to cover the pile of suits coming from consumers who claim they or their relatives were injured or killed in crashes linked to the bad gas pedals. (Many of these suits--if not all of them--will also name CTS Corp., the company that manufactured the key components of the gas pedals.) On top of that, the New Orleans plaintiffs firm Kahn Swick & Foti is investigating a possible action on behalf of shareholders who stand to lose as Toyota's stock price continues to plummet, according to the NLJ. 

Bad times all around for Toyota. And it might stay that way for a while, at least if Audi's experience with faulty accelerator issues is a guide, according to Bloomberg. Audi went through this in the 1980s and saw its domestic sales fall by more than 80 percent through the late 1980s and into the 1990s, Bloomberg says. Sales didn't return to the early 1980s level until 2000, and a class action case related to the bad gas pedals is pending to this day. 

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