Dec 28, 2010

Recall Total: Toyota to Pay $32.4M Fine

Toyota will pay $32.4 million in fines over the company's bungled handling of recent recalls that affected millions of Toyota and Lexus vehicles, under a deal announced last week.

The 2009 and 2010 Toyota-Lexus recalls were prompted by a number of incidents in which drivers reported gas pedals "sticking" and causing unintended vehicle acceleration. The problem was that the gas pedals were getting caught in the vehicle's floor mats. These "unintended acceleration" incidents grabbed headlines and the instant attention of worried Toyota and Lexus owners. But, according to the U.S. Department of Transportation, early recall efforts by Toyota -- related to the pedal/floor mat issue and a separate steering column defect -- were too narrow in scope and didn't go far enough toward fixing the problems.

So, Toyota has agreed to pay the fines in response to the DOT's assertion that the company failed to comply with the National Traffic and Motor Vehicle Safety Act's rules for reporting safety defects to the National Highway Traffic Safety Administration. The $32.4 in fines adds up to the maximum possible penalty allowed under the law, and it's also the largest recall-related penalty ever paid by a car company, dwarfing the $1 million paid by GM in 2004, according to the Los Angeles Times.

For more information about the Toyota recalls -- and to understand the legal issues behind vehicle defects -- check out these articles from Nolo: