Judge Tentatively Dismisses Foreign Consumers' Claims Against Toyota in Sudden-Acceleration Case

Just the Facts:

• In a key ruling in the Toyota sudden-acceleration litigation, a federal judge on Monday tentatively dismissed foreign consumers' claims against the automaker.
• Judge James V. Selna wrote that the foreign plaintiffs "failed to explain how the Toyota entity responsible for U.S. marketing impacted the buying decisions of Toyota customers worldwide."
• The judge said there is no basis to assume that the "American automobile market is a fair surrogate for every other market in the world."

SANTA ANA, California — In a key ruling in the Toyota sudden-acceleration multidistrict litigation, a federal judge on Monday tentatively dismissed foreign consumers' claims against the automaker. The judge also tentatively dismissed racketeering claims against Toyota, as well as products liability and negligence claims.

The foreign claims asserted economic damages on behalf of buyers in 14 countries who purchased 27 different Toyota models. The ruling means that foreign buyers who purchased or leased Toyotas outside of the U.S. cannot pursue claims against the automaker in U.S. courts. Toyota had questioned why foreign plaintiffs were bringing cases in the U.S. rather than their home countries.

Judge James V. Selna wrote that the foreign plaintiffs "failed to explain how the Toyota entity responsible for U.S. marketing impacted the buying decisions of Toyota customers worldwide." The order was posted on the Web site of the U.S. District Court here.

He added: "To the extent plaintiffs argue that a worldwide recall may act as a proxy for alleging injury in fact on behalf of vehicle owners affected by the recall, the court rejects this argument. There is no basis here to assume that the market for Toyota products is homogenous throughout the world, and unaffected by the characteristic of local markets, such as local preferences, the status of the local economy and the supply and demand characteristics of the local market. Said another way, there is no basis to assume that the American automobile market is a fair surrogate for every other market in the world."

If upheld, the ruling would be the first to entirely dismiss consumer claims against Toyota, notes The National Law Journal.

"We believe the foreign plaintiffs' complaint still does not overcome the fundamental problem that these claims should be brought in their home countries, not the U.S.," said Toyota's U.S. arm in response to an e-mailed query from Inside Line. "While Toyota's U.S. entities were named as defendants, they have little connection to the foreign plaintiffs' claims, as the vast majority of the Toyota models in question are neither designed, nor manufactured, nor sold in the U.S. In fact, Toyotas are manufactured in at least 26 countries worldwide, and more than 170 corporate entities market and sell Toyotas in at least 170 countries."

The foreign claims are separate from approximately 300 U.S. cases. Toyota's sudden-acceleration trial is set for February 2013.

Inside Line says: Chalk up one win for Toyota in its continuing court battle.