Toyota Hit With Record $16M Fine

WASHINGTON (CN) - The U.S. government seeks a record $16.4 million fine against Toyota for allegedly hiding the "sticky pedal" defect that forced the recall of 2.3 million vehicles in late January. U.S. Department of Transportation Secretary Ray LaHood announced Monday that the agency was seeking the maximum civil penalty against the Japanese automaker for ignoring the potential risk to millions of customers with sticking accelerator pedals.

LaHood said Toyota knew about the sticky pedal problem for at least four months before it told the National Highway Traffic Safety Administration, which monitors auto safety in the United States. Toyota was required to tell the agency about the safety defect within five business days of discovering it.

According to company documents, Toyota knew about the defect since at least September 29, 2009, the government said. The company instructed distributors on making repairs that day, but did not issue a recall until January 21, 2010.

In mid-February, the NHTSA launched an investigation into the massive recalls issued by Toyota, including a September 2009 recall for 3.8 million vehicles due to floor mats causing accelerators to stick. Toyota provided 70,000 pages of documents for the investigation.

"We now have proof that Toyota failed to live up to its legal obligations," LaHood said in a statement. "Worse yet, they knowingly hid a dangerous defect for months from U.S. officials and did not take action to protect millions of drivers and their families. For those reasons, we are seeking the maximum penalty possible under current laws."

In response, Toyota said, "While we have not yet received their letter, we understand that NHTSA has taken a position on this recall. We have already taken a number of important steps to improve our communications with regulators and customers on safety-related matters as part of our strengthened overall commitment to quality assurance."

The company appointed a chief quality officer for North America on March 25 to oversee safety concerns in the region.

The government has linked 52 deaths to accelerator problems in Toyota vehicles.

The agency is still investigating whether Toyota could face additional fines for other violations. The $16.4 million penalty relates only to the sticky pedal defect.

The penalty being sought against Toyota would be the largest civil penalty ever assessed against an auto manufacturer by NHTSA, the agency said.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit