Toyota Motor Corp. has won a $2.6-million arbitration judgment against a former in-house attorney who had accused the company of a conspiracy to hide evidence in product safety litigation.
The Japanese automaker had vigorously denied the allegations of its ex-attorney, Dimitrios Biller, who helped the company manage vehicle rollover lawsuits out of its U.S. offices in Torrance for four years.
Toyota instead contended that the attorney had violated a confidentiality agreement and attorney-client privilege by taking thousands of company documents with him when he left the company in 2007, later releasing and discussing some of them publicly.
In a ruling this week, arbitrator Gary L. Taylor sided decisively with the world's largest automaker.
"Mr. Biller did the professionally unthinkable: He betrayed the confidences of his client," Taylor, a retired federal judge, wrote in his 15-page judgment Tuesday. "He intentionally and repeatedly disclosed confidential information and documents in violation of ethical, statutory and contractual prohibitions."
Biller, who took a $3.7-million severance from Toyota, did not return calls and e-mails seeking comment.
The Pacific Palisades resident had previously defended his actions, asserting that he witnessed criminal wrongdoing including fraud, and that in such cases attorney-client privilege does not apply.
Taylor's decision is a significant legal victory for the embattled automaker, which has been struggling to restore its reputation in the face of waves of quality and safety recalls, as well as lawsuits related to allegations that its vehicles are prone to sudden acceleration.
"We believe that the arbitrator's award clearly vindicates Toyota's position and reaffirms the critical importance of attorney?client privilege as a cornerstone of our legal system," Toyota's general counsel, Christopher Reynolds, said in a statement Wednesday.
"Mr. Biller has continuously made misleading and inaccurate allegations about Toyota's conduct, and we feel this award is an appropriate consequence of his actions and completely discredits his meritless attacks on our company and our people," the statement said.
According to the ruling, Biller must pay Toyota $2.5 million in damages and $100,000 in punitive damages. He will also be permanently barred from discussing the company's privileged information and must return any of its documents in his possession.
In addition, the decision appears to reduce the automaker's risk that documents held by Biller will be produced in pending lawsuits, including a case in Texas involving a woman paralyzed when her Camry rolled over.
A Texas judge is reviewing that case to determine whether Toyota withheld information in her lawsuit, which was settled out of court. Biller managed Toyota's defense in that case.
The victim's attorney, Jeff Embry, has contended that the case might not have been settled — or would have been settled for a higher amount — if all relevant information were known. Embry had been expected to call Biller as a witness in the matter. He could not be reached for comment Wednesday.
After years handling product safety litigation for a private law firm, Biller joined Toyota in 2003. He led the automaker's defense of vehicle rollover suits, fast gaining a reputation as a skilled and assertive attorney willing to take cases to trial rather than settle.
But Biller fell out with his employer over a disagreement over what evidence the automaker was obligated to produce in litigation, and ultimately left his job in 2007.
After a brief stint with the Los Angeles County district attorney's office, Biller opened an education business, giving classes on legal discovery. Shortly thereafter Toyota sued him in federal court, alleging that he revealed confidential information in the classes.
In 2009 Biller countersued, accusing Toyota of violating racketeering laws in what he termed a "ruthless conspiracy and relentless effort to prevent evidence of its vehicles' structural shortcomings from becoming known."
In addition, he alleged that Toyota had caused him to become clinically depressed.
Judge Taylor's decision includes a summary judgment to drop all of Biller's charges against the company, as well as prevent him from seeking additional damages against Toyota employees named in his suit.
Because it came out of binding arbitration, the ruling cannot be appealed. Although such decisions are typically confidential, Taylor allowed Toyota to decide whether to release the information.
Last month it was disclosed that Toyota agreed to pay $10 million to settle a lawsuit over a Lexus that sped out of control and crashed near San Diego in 2009, killing four people.
The company still faces scores of other sudden acceleration suits in state and federal court, and has been hit with $48.8 million in fines by the federal government for delaying recalls.