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Toyota gets final OK to settle the class action

Agencies | Updated: 2013-07-23 15:25

A US judge on Friday gave final approval to the settlement of a class action lawsuit against Toyota Motor Corp by plaintiffs who claimed design defects caused some of the company's vehicles to accelerate without warning.

US District Judge James Selna in California gave final approval during a court hearing on Friday, lawyers for the plaintiffs said. The settlement was initially approved in December.

The terms include direct payments to customers as well as free installation of brake-override systems in an estimated 3.25 million eligible vehicles, and the establishment of a customer support program, according to court filings.

Plaintiffs' lawyers valued the deal at more than $1.6 billion, calling it "a landmark, if not a record, settlement in automobile defect class action litigation in the United States," according to court filings. The lawsuit was filed in 2010.

Toyota, which has the third largest share of the US auto market, announced in December that it would take a one-time pre-tax charge of $1.1 billion to cover the estimated settlement costs. It has denied any wrongdoing.

"This agreement allows us to resolve a legacy legal issue in a way that provides significant value to our customers and demonstrates that they can depend on Toyota to stand behind our vehicles," Toyota spokeswoman Celeste Migliore said in a statement following the hearing Friday.

Concerns about potential unintended acceleration issues caused Toyota to recall more than 10 million vehicles between 2009 and 2011. Plaintiffs said in the lawsuit that media reports and consumer complaints about the alleged defects caused the trade-in value for their vehicles to plummet.

The settlement of the lawsuit covers economic losses stemming from the alleged safety defects, but does not include claims of wrongful death, personal injury or property damage.

More than 22 million potential class members have been notified of the settlement, according to court filings. Owners of affected Toyota, Lexus and Scion models sold in the United States have until July 29 to decide whether to participate in the settlement and file claims, according to court filings.

Plaintiffs' lawyers are seeking $200 million in fees and $27 million for their expenses, the filings said.

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