Toyota accused of concealing lawsuit data
2/27/2010WASHINGTON - Toyota withheld documents it was legally required to turn over in liability lawsuits the company faced, and it paid higher settlements to plaintiffs to avoid revealing information contained in Toyota's secret "Books of Knowledge," a congressional committee chairman said yesterday.
Rep. Edolphus Towns (D., N.Y.), chairman of the House Oversight and Government Reform Committee, which grilled top Toyota officials on Wednesday, said in a statement that the documents, which were obtained under subpoena from a former Toyota lawyer-turned-whistleblower, "indicate a systematic disregard for the law and routine violation of court discovery orders in litigation."
In a letter to Toyota's top North American executive, Yoshimi Inaba, Mr. Towns accused Toyota of shielding its testing data on potential problems with Toyota vehicles.
Mr. Towns asked Mr. Inaba to respond to the issues raised by the documents by March 12.
Mr. Towns' committee subpoenaed documents held by former top Toyota North America lawyer Dimitrios Biller. From 2003 to 2007, Mr. Biller represented Toyota against liability claims of Toyota drivers who were injured in crashes.
The documents include Mr. Biller's recounting of a 2006 arbitration case against Toyota involving a vehicle rollover that left the driver paralyzed. Toyota was willing to pay a premium settlement to prevent the plaintiff's lawyers from getting access to Toyota's so-called Books of Knowledge database which, Mr. Biller writes, "contain highly sensitive information that rises to the level of trade secrets and highly confidential information."
In the documents, Mr. Biller explains: "The Books of Knowledge contain information on how to design vehicles and component parts [including safety systems like seat belts, side curtain airbags]. The information does not relate to any one particular vehicle; the information relates to all vehicles. The information is essentially design principles and philosophies that serve the foundation for how Toyota designs its vehicles."
Toyota said in a statement that it is confident it acted appropriately in product liability lawsuits and it looks forward to addressing Mr. Towns' concerns. The automaker said it is not uncommon for companies to object to demands for documents made in lawsuits.
Mr. Inaba and Toyota President Akio Toyoda appeared before the committee on Wednesday, the second of two House hearings this week on Toyota's recall of 8.5 million vehicles over safety concerns.
Lawmakers and federal safety regulators have accused Toyota of concealing safety problems over cases of sudden unintended acceleration.
During Mr. Biller's four-year stint as managing counsel of Toyota's U.S.-based product liability group, he dealt with lawsuits against the company for vehicle rollover crashes.
In a July lawsuit, Mr. Biller accused Toyota of conspiring to withhold evidence in the rollover cases and forcing him to resign when he told the company it had a legal duty to release evidence to plaintiffs' attorneys.
The lawsuit says Mr. Biller was harassed by Toyota and suffered a "complete mental and physical breakdown." He made a wrongful discharge claim and agreed to a $3.7 million severance package.
According to memos Mr. Biller provided to the committee, Toyota had a database covering design problems and "countermeasures" that it developed to resolve the rollover problems. Mr. Biller said he discovered the database while working on a case, and warned that it should be released during litigation.
In an October statement, Toyota said Mr. Biller's actions were motivated by personal financial interests and denied that he resigned because of legal ethics concerns.
Also yesterday, Toyota officially said that it would extend nationwide some recall-related services that it was offering to customers only in the state of New York.
The added services will be tailored to a customer's needs and can include quick scheduling of repairs, pickup and return of the vehicle by the dealer, driving a customer to work, or providing alternate transportation such as a loaner or rental car.