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Toyota to settle lawsuit over Prius headlights that shut off without warning

The automaker will reimburse Prius owners for their costs to fix headlight problems and extend their warranties.

January 19, 2011|By Ken Bensinger, Los Angeles Times

Toyota Motor Corp. has agreed to settle a class action lawsuit over headlights in its 2006 to 2009 Prius hybrids that shut off without warning, triggering at least 2,500 complaints from motorists.

Under the terms of the settlement, eligible Prius owners will be reimbursed for their costs to fix failing headlight systems. They will also get their warranties for headlight problems extended to five years or 50,000 miles, rather than the standard three years or 36,000 miles.

Although there was no dollar figure connected to the settlement, attorneys for plaintiffs estimated that the toll could run into the tens of millions of dollars, based on the number of vehicles potentially affected by the headlight problem. Those attorneys said that as many as 320,000 owners of Priuses with optional high intensity discharge (HID) headlights may be covered by the agreement.

"Conservatively, there are tens of thousands of lights that were replaced or repaired," said Eric Gibbs, a San Francisco attorney representing the class.

In settling, the embattled Japanese automaker removes another challenge from its hefty legal docket, but also adds to the mounting costs of addressing its recent quality and safety issues. Toyota still faces hundreds of lawsuits for other issues, including sudden acceleration and rollover problems.

Judge Manuel Real of U.S. District Court in Los Angeles certified the class and gave preliminary approval of the settlement last week. Under its terms, eligible Prius owners will be notified by mail starting next month and have 90 days thereafter to register with the class.

By settling, Toyota avoids the risk of having a jury determine that the headlight problem is in fact a defect, which could spur a recall to replace all such headlights — a potentially far more costly solution. Under the settlement, the automaker did not admit any wrongdoing or liability.

"Toyota worked in good faith to resolve this matter in the interest of customer satisfaction," spokesman Brian Lyons said in a statement. "We are pleased that all parties have reached an amicable agreement."

To date, the automaker has not conceded that the 2006 to 2009 Prius hybrids have a defect in the lighting system, despite the numerous complaints to regulators that the HID headlamps tend to suddenly turn off, with both headlights going out simultaneously in some cases, a potentially hazardous condition.

A small number of drivers have alleged that the condition caused accidents or minor injuries. National Highway Traffic Safety Administration data do not reveal any deaths blamed on the problem.

According to Lyons, 216,000 Prius hybrids were outfitted with those headlights, out of a total of 620,000 sold in those model years. Because some vehicles were leased, and others sold secondhand, the number of potential class members exceeds the number of eligible vehicles.

A review of the NHTSA database shows that 49% of all complaints about 2006 to 2009 Priuses were related to lighting, headlamps or visibility. That far outnumbers complaints of sudden acceleration or braking issues in the vehicles, both of which have led to recalls.

A NHTSA probe launched in April 2009 determined that there were more than 2,250 complaints about failing headlamps lodged with the agency or Toyota, and that Toyota had completed almost 28,000 warranty repairs of the HID system.

That investigation was dropped in August 2009 after Toyota said it would initiate a "consumer service campaign" to address the issue. Complaints of headlight failure have continued to come in, however, with dozens lodged to NHTSA in the last few months, and online forums brimming with discussions of the problem.

Beyond the safety risks of the headlight problem, many consumers also complained that dealers refused to cover the costs of repair. Instead, they were forced to pay for new headlights, or in many cases a new onboard computer that controls the lighting system.

The costs of repairs varied, but typically ran between $250 and $1,000, attorneys said. One NHTSA complaint, for example, cites a service manager charging $578 to replace both headlamps in a 2006 Prius, but notes the manager "wouldn't guarantee that would solve the problem."

The settlement will allow consumers who have receipts for their repairs, either at a Toyota dealership or elsewhere, to file for reimbursement.

"Anyone who had any bulb or computer failure will now be able to get their money back," attorney Gibbs said. "I think we reached a pretty good settlement."

Gibbs said that during discovery in the case Toyota showed evidence suggesting that the problem lay in the headlamps themselves, rather than in the computer, or ECU, that controlled them. Toyota has since moved to a new bulb, which it claims does not fail as readily as the previous model.

Toyota still faces hundreds of lawsuits for other issues, including sudden acceleration and rollover problems.

Toyota has agreed to pay $10 million to settle one sudden acceleration suit, involving a Lexus ES that crashed outside of San Diego in 2009, killing four. If other acceleration cases are not settled, they could go to trial within the next year.

Attorney Mike Arias, also representing plaintiffs in the Prius headlights class, said he was not convinced that the problem was entirely due to the bulbs. "I still think it's an ECU problem" Arias said. "We argued that the circuitry caused the headlamp failures."

Toyota has repeatedly claimed that its vehicles have no electronic defects. Spokesman Lyons said the company no longer replaced ECUs for headlamp failures, and that the new bulb appeared to fail much less frequently.

ken.bensinger@latimes.com

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