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Law360 Talks to Judd Law Group: “Toyota Might Take Chances On Sanction-Laden Bellwether”

By Greg Ryan

Law360, New York (June 12, 2012, 9:42 PM ET) — Despite the now-finalized sanctions against Toyota Motor Sales USA Inc., attorneys say the carmaker may well tell a California federal judge on Wednesday to keep in place the first-scheduled trial over an alleged sudden acceleration defect, considering the money it has invested in preparation and the perceived strength of its case.

U.S. District Judge James V. Selna on Monday adopted sanctions he had laid out in a May tentative ruling. He will issue an adverse inference instruction to the jury regarding Toyota’s handling of a data recorder during a post-crash car inspection that it didn’t notify plaintiffs’ counsel about. He will also instruct jury members to view Toyota personnel’s testimony about the inspection “with greater caution than that of other witnesses.”

Toyota and the plaintiffs in the suit, who blame an accident that killed two of their family members on the purported defect, are scheduled to meet with Judge Selna on Wednesday to discuss whether they want to keep the case as the first-in-line bellwether in the multidistrict litigation.

The carmaker declined to comment Tuesday about what it planned to tell the judge at the status conference. But even with the obstacles created by the sanctions, Toyota could argue in favor of heading to trial next year as scheduled, a position the plaintiffs have indicated they will take up.

“I think they feel good about their case overall, and if they feel they can survive this sanction, it would give [the victory] a lot of weight in later cases that go to trial,” said Thomas Regan of LeClairRyan, an attorney who defends automakers.

“If they win, they’ll say, ‘We won despite the sanctions’; if they lose, they’ll say, ‘We lost because of the sanctions,’” he added.

As in the tentative ruling, Judge Selna refrained from specifying the exact nature of the adverse inference instruction related to Toyota’s handling of the data recorder. While such an unknown certainly poses a risk to Toyota, it could also prove a benefit, said Jeffrey Judd of Judd Law Group.

“If the plaintiffs are not allowed to make a big deal out of the sanction, and it’s just one of a dozen seemingly unintelligible jury instructions, it may not have a great negative impact on the jury,” he said.

In addition, Toyota may have spent millions of dollars on the case at this point, according to Judd, making its abandonment a painful prospect. Judge Selna selected the suit to be the first bellwether in the litigation in June 2011.

Although Monday’s order was nearly identical to the tentative ruling, Judge Selna did make two additional findings that deferred in large part to the testimony of an expert for the carmaker — a potential boost for Toyota.

There are differences in certain raw recorder data downloaded by Toyota and the plaintiffs from the car, the judge said, but he agreed with the expert that the data are not related to the crash.

There was also a difference between the change-of-velocity reading downloaded by Toyota and by the plaintiffs: Toyota’s data initially showed the car’s speed dropping more dramatically than the plaintiffs’ data did. The expert explained that the carmaker had fixed the conversion issue that led to the difference, and Judge Selna said he could find no evidence contradicting the statement.

Judd believes Toyota’s attorneys may have purposefully excluded the plaintiffs’ representatives from the inspection. “I’m not at all persuaded they’re going to be overly spooked by this, because this was clearly a foreseeable dispute,” he said. “They may have already decided it was worth it.”

While attorneys acknowledged Toyota could decide to keep the case in place, not all agreed it was a good idea. Roetzel & Andress LPA partner John Boudet said he had learned from personal experience how difficult negative inference jury instructions are to overcome.

“We had a fantastic case but for that 800-pound gorilla, and it was the only thing in room,” Boudet said. “Science didn’t matter, facts didn’t matter — all that mattered was that the lady in the robe said, ‘That guy’s a cheater.’”

Boudet predicted Toyota would argue Wednesday that the case should be dropped as a first-in-line bellwether.

Whatever plaintiffs and circumstances it ultimately involves, the first trial will be key to establishing momentum going forward, Judd said.

“You have to look at this MDL big picture,” he said. “Toyota is probably going to get some defense verdicts, and probably going to get hit with awards — it knows that at the outset. The question is how to pick your best battles.”

Attorneys for the plaintiffs did not immediately return requests for comment.

The plaintiffs are represented by Robert A. Krause of The Spence Law Firm and Mark P. Robinson, Kevin F. Calcagnie and Scot D. Wilson of Robinson Calcagnie Robinson Shapiro Davis Inc.

Toyota is represented by Vincent Galvin, Mark V. Berry, Neil M. Kliebenstein, Anne O. Hanna and Ryan A. McCarthy of Bowman and Brooke LLP.

The case is Van Alfen et al. v. Toyota Motor Sales USA Inc., case number 2:11-cv-08120, in the U.S. District Court for the Central District of California.

The MDL is In re: Toyota Motor Corp. Unintended Acceleration Marketing, Sales Practices, and Products Liability Litigation, MDL number 8:10-ml-02151, in the U.S. District Court for the Central District of California.