The Obama Administration’s Defective Toyota Shakedown

by Henry Payne


“The verdict is in. There is no electronic-based cause for unintended high-speed acceleration in Toyotas,” said U.S. Transportation Secretary Ray LaHood in February, 2011 upon releasing an exhaustive study by NHTSA and NASA absolving Toyota of allegations its vehicles were unsafe.

Three years later, the U.S. Justice Department this week fined Toyota a record $1.2 billion for failing to warn customers of unsafe vehicles.

Huh? Americans can be excused if they feel they’ve fallen down Alice’s rabbit hole.

“The problems gained public attention (in 2009) when a highway patrolman and his family were killed in an accident in San Diego,” reported a Reuters story typical of media coverage. “Toyota responded with a recall of millions of vehicles but left on the road some vehicles. . . having among the worst problems with floor mats that trapped acceleration pedals.”

Like pictures Photoshopped of their most critical details, these reports rewrite history. As such they are cover for a Justice Department kangaroo court that handed down fines bearing little relation to the original allegations against Toyota.

In truth federal probes were part of a massive effort by the trial-lawyer community, the safety advocates they fund, and Democratic politicians to open a broad new litigation front against Toyota (and by extension all automakers) claiming that buggy electronic throttle controls cause deadly, unintended acceleration.

Rep. Henry Waxman (D., Calif.) called 2010 House hearings to take “a serious look at the possibility that electronic defects could be causing the problem.”

And tort lawyer–funded safety advocate Clarence Ditlow of the Center for Auto Safety told a Senate hearing that “the Toyota unintended acceleration crisis” had been caused by “electronic controls.”

The circus hearings paralleled a media panic that featured almost daily claims of electronically induced sudden acceleration accidents — including footage of a “runaway” Toyota Prius in San Diego that gripped cable news and a faked report by ABC’s Brian Ross alleging how Toyotas could accelerate without warning.

Toyota denied any electronic defects, instead claiming — to widespread Washington snickering — the incidents were caused by faulty floor mats, a sticky plastic pedal piece, or pedal misapplication (i.e., mistaking accelerator for brake). In late 2009 and early 2010, Toyota announced two recalls totaling nearly 7 million vehicles to replace floor mats and the plastic piece. The company also revamped its U.S. safety management admitting it had grown complacent in the face of customer concerns.

A year later, the NHTSA/NAA study of Event Data Recorders (a.k.a., the “black boxes” found in modern cars) confirmed Toyotas were mechanically sound.

While a handful of incidents involved accelerator-trapping floor mats, NHTSA said it “believes that the most likely cause of (most) incidents was pedal misapplication.” The tragic death of the officer and his family? The result of a dealer having installed the wrong floor mat in a loaner Lexus ES350 sedan. The family makes up four of five confirmed Toyota vehicle deaths (the fifth also allegedly floor mat related).

Yet Holder & media have ignored this history.

Incredibly, this week’s coverage approvingly quoted discredited former NHTSA chief Joan Colebrook – whose Carter-era airbag mandate for front seat passengers led to dozens of child deaths – who told Reuters that the Justice fine “means at the highest levels of the auto company, they have to worry about going to jail if they don’t report a defect.”

Having invested so much into charging Toyota with fictional electronic gremlins, Washington’s Iron Triangle — Justice, media, and safety lobby — convicted the company anyway.

Significantly, Toyota admitted no wrongdoing in an opaque public statement accepting Holder’s penalty. Profitable and with its Lexus and Toyota brands ranked Nos. 1 and  2 by Consumer Reports for reliability, the company has made a calculation to put Justice’s Inquisition behind it.

Legal experts were troubled by the fine, seeing it as part of a larger, anti-business Obama administration campaign narrative.

“The timing of the original (2010) investigation seemed a bit suspicious, because it was in the midst of the American car companies’ woes,” David Skeel, Professor of Corporate Law at the University of Pennsylvania Law School, told me. “As for the new fine one possible explanation is a desire to appear tough on global corporations in the wake of the Attorney General’s much criticized suggestion that some of the big banks are ‘too big to jail.’”

Whatever the motivation, Holder’s action sets a disturbing precedent for auto companies whether they are guilty or not. “Sentence first, verdict afterwards,” said the Queen in Alice in Wonderland.

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