Litigation

Chesley Files RICO Class Action Against Toyota

CINCINNATI — Stanley M. Chesley of the Cincinnati-based law firm of Waite, Schneider, Bayless & Chesley Co. L.P.A. announced Feb. 12 that he had filed the first national class action lawsuit against Toyota Motor Corp. under the federal Racketeer Influenced and Corrupt Organizations Act (RICO) racketeering statute, which prohibits ongoing fraudulent activities.

According to Chesley:

This national class action is unique among the lawsuits filed in the wake of Toyota's worldwide recall of 10.7 million vehicles. Instead of targeting only the defects themselves, it targets Toyota's repeated efforts to deceive its car owners — and even its own dealers— as to the mechanical and electrical problems mushrooming within its fleet of vehicles. Chesley's complaint alleges that, although Toyota knew of these problems years before the recent recalls, it continued to assure its dealers and the general public that its vehicles were perfectly safe.

The government has found Toyota made "inaccurate and misleading" statements about the causes of these mechanical and electrical problems. And, more recently, Toyota has refused to give government investigators access to its vehicles' event data recorder — similar to an airplane's "black box" — under the guise that its technology is proprietary.

Chesley's lawsuit claims Toyota drivers should not have to make monthly lease or loan payments on recalled Toyotas until their vehicles have been repaired according to specifications approved by the government. Instead, it asks the U.S. District Court for the Eastern District of Kentucky to force Toyota to make those lease or loan payments until that happens. According to Chesley, this novel, payment-shifting approach would benefit both Toyota drivers and the public: it would relieve drivers of the unfair burden of making payments on cars they can't safely drive and would increase participation in this recall, thereby removing a greater number of dangerous cars from the streets.

Historically, only about 10 percent of owners take advantage of automotive recalls. Chesley claims his plan would dramatically increase that participation rate by giving Toyota drivers a potent incentive to bring cars in for the government-certified repairs. If the court adopts his plan, merely by tendering their cars for these repairs, Toyota drivers would qualify for temporary relief from their monthly lease or loan payments. To remove an even larger number of dangerous cars from service, the lawsuit also seeks to expand the recall to include all cars with the same defects.

By filing the case in the U.S. District Court for the Eastern District of Kentucky — the home of Toyota's largest U.S. plant and its North American headquarters — Chesley said he intends to send a message to Toyota that the American public will not be intimidated by corporations who care more about profit margins than personal safety.