Toyota Motor Corp has agreed to a settlement of up to $3.4 billion for a federal class action brought by U.S. owners of pickup trucks and SUVs whose frames could rust through, plaintiffs lawyers have said in court papers.
The proposed settlement covers about 1.5 million Tacoma compact pickups, Tundra full-size pickups, and Sequoia SUVs alleged to have received inadequate rust protection that could lead to corrosion serious enough to jeopardize their structural integrity, according to court papers.
The agreement is a substantial financial setback at a time when the Japanese auto giant’s record-breaking profit streak has slowed in recent quarters as a strong yen dents its performance. The company also is part of a broader group of automakers facing plateauing retail sales in the profitable U.S. market.
The deal, filed in U.S. District Court in Los Angeles this week, settles litigation in two states over problems with Toyota Tacoma trucks from model years 2005 to 2010, Tundras from 2007 to 2008 and Sequoias from 2005 to 2008.
“We want our customers to have a great ownership experience, so we are pleased to resolve this litigation in a way that benefits them and demonstrates that we stand behind the quality and reliability of our vehicles,”
-Toyota said in a statement.
Toyota also agreed to pay $9.75 million in attorneys’ fees, $150,000 in costs and expenses, and $2,500 each to the named eight class representatives as well as the cost of advertising the settlement.