Reply #123: Toyota agrees to pay fine for delaying disclosure of gas pedal defects

[Demeter]

http://www.latimes.com/business/la-fi-toyota19-2010apr19,0,4894418.story

It's not clear whether the penalty includes an admission by Toyota that it violated the law.

By Ralph Vartabedian and Ken Bensinger

April 19, 2010

Reporting from Washington

Toyota will agree to pay a record $16.4-million fine for hiding safety defects related to sudden acceleration in 2.3 million vehicles but will stop short of accepting full legal responsibility for purposely withholding safety information, federal safety regulators said late Sunday.

Toyota failed to notify the National Highway Traffic Safety Administration for at least four months after learning that the accelerator pedals in some of its vehicles could stick and cause unwanted acceleration, regulators say. Under federal law, automakers are required to disclose defects within five business days.

NHTSA announced April 5 that it would seek the fine. Final details of the written agreement with Toyota were still unresolved Sunday night, although the agency said it expected Toyota to pay the maximum amount that NHTSA is allowed by law to levy.

"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.

Toyota officials could not be reached for comment late Sunday.

Toyota was given until Monday to pay the fine or contest it. Even as late as Sunday night, it was not clear whether the written agreement that governs the fine would include an admission by Toyota that it violated the law.

Such an admission would be important because Toyota faces scores of personal-injury and class-action lawsuits alleging that safety defects in its vehicles have caused crashes, injuries and fatalities.

Even if Toyota does not formally admit guilt, federal officials said, paying the sizable fine would indicate that the automaker broke the law.

Plaintiff attorneys have said they plan to use the fine as evidence in litigation.

The Japanese automaker issued a recall for the sticky-pedal problem in late January, acknowledging that the accelerator pedal assembly on some models could fail to return to the idle position in certain circumstances.

Several months before that, Toyota announced its largest-ever recall to address the risk that floor mats in some models could entrap the gas pedal and cause unwanted acceleration. That recall now includes 5.4 million vehicles. In addition, Toyota has launched recalls of several other models in recent months for safety issues related to braking and rust. In total, the automaker has issued roughly 10.5 million recall notices worldwide in the last seven months.

Toyota sent instructions to its European operations in September that explained how to fix accelerator pedals that could stick but decided not to similarly notify U.S. dealers and government regulators, according to an April 5 letter from NHTSA attorneys to Toyota.

The NHTSA letter indicated that Toyota may have known about the defect for at least three years.

It was not until Jan. 19 that Toyota notified NHTSA about the defect and then two days later issued its massive recall. Five days after that, Toyota halted sales and production of eight models because of the defect.

NHTSA said in its April 5 letter that it may seek additional fines related to the sticky-pedal recall.

Meanwhile, the agency has acknowledged it is investigating other Toyota disclosure practices that may have violated federal law and could result in further fines.

To date, the largest federal penalty paid by an automaker was $1 million, levied against General Motors in 2004 for delaying a windshield wiper recall.