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U.S. weighs second penalty against Toyota

Federal safety regulators find that 'two separate defects' exist in sticking accelerator pedals, but that the ongoing recall may address only one.

April 10, 2010|By Ken Bensinger and Ralph Vartabedian

Federal safety regulators are weighing a second penalty against Toyota Motor Corp. for its handling of the recall of 2.3 million cars and trucks with accelerator pedals that can stick and cause sudden acceleration.

In a letter sent to Toyota this week, the National Highway Traffic Safety Administration said its investigation found that "two separate defects" exist in the recalled pedals and that the ongoing recall, announced Jan. 21, may address only one. As a result, the agency said, it is "considering pursuing a second civil penalty action against Toyota."

The letter follows the agency's announcement Monday that it would seek a nearly $16.4-million fine -- the maximum allowable -- against Toyota for failing to notify the agency of the defect for nearly four months.

The agency's six-page letter, written by Chief Counsel O. Kevin Vincent, details its investigation of the sticking-pedal recall and NHTSA's rationale for imposing the penalty. It indicates that Toyota has not been fully cooperative with regulators during the course of the investigation, launched in mid-February, and has not yet provided answers to all of NHTSA's questions.

In addition, the letter states, documents sent to the agency indicate that Toyota had first become aware of sticking pedals in July 2006, nearly 3 1/2 years before it issued the recall.

"The gravity of Toyota's apparent violations is severe and potentially life-threatening," Vincent wrote, indicating that the automaker made decisions that exposed "millions of American drivers, passengers and pedestrians to the dangers of driving with a defective accelerator pedal."

Earlier in the week, the automaker said it was "considering its response" to the proposed penalty, which it can either pay or contest. Toyota added that it "has and will continue to practice its philosophy of satisfying consumers with high-quality vehicles that are safe and reliable, and responding to consumer feedback with honesty and integrity."

Toyota has until April 19 to respond. If it fights the penalty, NHTSA will ask the Justice Department to file suit in federal court for the full amount, plus "other appropriate relief."

The penalty is the largest ever levied against an automaker by NHTSA and is the maximum allowed under statute. Violations of the federal law on defect reporting are punishable by a $6,000 fine per infraction, with each vehicle counting as a violation, but the total fine is capped. If it were not, NHTSA said, Toyota would have been subject to $13.8 billion in penalties.

Until now, the most NHTSA had ever fined an automaker was $1 million, in a 2004 case against General Motors over a delayed recall of faulty windshield wipers.

The ongoing review of the sticking-pedal problem is one of three investigations launched by the agency into Toyota's recalls. NHTSA is probing the timeliness of the automaker's recall of 5.4 million vehicles for floor mats that can entrap the accelerator pedal, as well as a query into whether the scope of Toyota's sudden-acceleration recalls was sufficient in terms of models.

Toyota indicated that it first received a report of a sticking pedal from the owner of a Toyota Avalon in July 2006, earlier than initially reported to NHTSA in its original recall filing.

In September, Toyota sent technical instructions to distributors in 31 countries in Europe to deal with the sticking-pedal problem. Yet the next month the automaker "inexplicably" decided not to implement such changes on vehicles in the United States, according to NHTSA's letter, and in November provided incomplete information about its internal handling of the problem to regulators here.

The agency was not fully informed of the problem, NHTSA said, until a Jan. 19 meeting with top U.S.-based Toyota officials.

Just three days before that meeting, a communications executive at Toyota's U.S. sales headquarters urged the automaker to "come clean" about mechanical problems in the pedals. "The time to hide on this one is over," the official wrote.

ken.bensinger @latimes.com

ralph.vartabedian @latimes.com

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