Charleston lawyer leads Toyota national class action

By Steve Korris | May 20, 2010


SANTA ANA, Calif. –- U.S. District Judge James Selna has picked Benjamin Bailey of Charleston for the team running national class actions against Toyota.

On May 14, Selna appointed Bailey to a committee of nine lawyers guiding litigation over claims of economic loss from unintended acceleration.

Selna chose another nine to guide personal injury and wrongful death litigation.

He took charge of pretrial proceedings nationwide in April, by appointment of the U.S. Judicial Panel on Multi District litigation.

Dozens of lawyers competed for the 18 appointments, which entrust power to lawyers over cases other lawyers filed and still others will soon file.

Bailey sued Toyota in November on behalf of Michael C. Graves of Kanawha County, Michael Graves of Fayette County, and Jeff Mullins of Marion County.

The first two bought new Toyotas from Bert Wolfe in Charleston, he wrote, and the third bought a used one with a warranty remaining from Dan Cava in Fairmont.

Bailey wrote that Toyota created and breached warranties, express and implied, that the vehicle was safe.

He sought restitution, disgorgement, punitive damages, attorney's fees, expenses, and costs, plus interest.

He sought an order requiring Toyota to stop advertising and selling vehicles without changing the accelerators.

Two other Bailey & Glasser lawyers, Eric Snyder and Robert Lorea, added their names to the complaint, as did Edgar Heiskell III of Charleston.

They amended it in January, tinkering like mechanics.

The original complaint said, "Runaway acceleration events almost always begin suddenly and without warning; the throttle opens so rapidly it is wide open before the driver has time to react."

The new one said, "Runaway acceleration occurs when the throttle opens contrary to the driver's intentions."

The original said manufacturers must provide a failsafe, and the new one said many manufacturers must provide them.

The original said Toyota concealed complaints from federal regulators, and the new one said Toyota concealed them through Toyota Motor North America.

The new one proposed a subclass of buyers with new car warranties still in force, seeking comparable new vehicles if Toyota can't make repairs.

The new one declared entitlement to repair costs, damages for inconvenience and loss of use, and full refunds or at least damages for diminished value.

For Toyota, Rebecca Betts of Charleston answered in January that plaintiffs didn't allege they experienced any manifestation of a defect.

"Plaintiffs do not allege that they can no longer drive their vehicles or use them in their ordinary course," she wrote.

She wrote that a negligence action limits a manufacturer's liability to damages for physical injuries to persons or property.

"There is no recovery for economic loss alone," she wrote.

Under their express warranties, she wrote, plaintiffs should have tendered the vehicles to the dealers for repairs.

The claims didn't measure up under state consumer law or lemon law, she wrote.

District Judge Joseph Goodwin set a scheduling conference for April 19, but on April 9 the multi district panel transferred it and 10 others to California's Central District.

Toyota maintains American headquarters in the district, panel members reasoned, and more cases were pending there than anywhere else.

They picked Selna after consulting with Chief Judge Audrey Collins.

Selna proposed separate leadership for economic loss and personal injury cases.

On April 30, Ben Barnow of Chicago proposed to split the economic loss cases into two groups, one for consumers and one for dealers, rental agencies and fleet owners.

He predicted conflicts of interest over a limited pool of assets and wrote, "It is unclear at this stage just what assets Toyota brings to this litigation."

He wrote that Moody's downgraded its credit rating.

"Toyota forecasts an operating loss of $1.65 billion for the fiscal year," he wrote.

On May 3, Selna gave everyone three days to respond.

Danny Becnel of Reserve, La., responded first, writing that interests of consumers and others were largely aligned.

Individuals asserting unjust enrichment or diminished value were situated similarly to rental agencies that seek damages for their losses, he wrote.

On May 6, Mark Moore of Los Angeles wrote that all plaintiffs had an overriding common interest in holding Toyota liable and recovering damages and restitution.

He dismissed speculation about Toyota's funds, writing that it has hundreds of billions in market capitalization and at least $40 billion in cash on hand.

For Bailey, Snyder wrote that a conflict may arise where a defendant's resources are insufficient to satisfy all claims. "That circumstance is not alleged here," he wrote.

"Decisions will be made by committee, and there should be no opportunity for any attorneys to unduly influence the course of the litigation," he wrote.

Elizabeth Cabraser of San Francisco and Mark Robinson of Newport Beach, Calif., wrote that Toyota's revenues in 2009 exceeded $200 billion.

"Prioritized discovery into Toyota's finances is relevant for many reasons, including punitive damages claims," they wrote.
Others perceived conflicts of interest for dealers and rental companies.

Burton Finkelstein of Washington wrote that dealers may have long term relations with Toyota and may have received information buyers didn't receive.

Jerome Ringler of Los Angeles perceived a conflict between a rental car class and others because rental companies sell cars directly to consumers at the end of their useful life.

With 75 plaintiff lawyers seeking committee appointments, Selna held a hearing on May 13 and picked his team the next day.

He found concerns over conflict of interest speculative in view of Toyota's $2.2 billion profit for the fiscal year ending March 31.

Rather than split economic loss leadership, he created a single committee of nine and loaded it with seven consumer lawyers.

He appointed three leaders, picking Steven Berman of Seattle and Marc Seltzer of Los Angeles for consumers and Frank Pitre of Burlingame, Calif., for the others.

Bailey made the cut as a consumer lawyer, along with Richard Arsenault of Alexandria, La., Stanley Chesley of Cincinnati, Jayne Conroy of New York and Michael Kelly of El Segundo, Calif.

Selna picked Ringler to represent nonconsumers.

For the personal injury committee, Selna named Cabraser and Robinson as leaders.

He also appointed Lewis Eidson of Coral Gables, Fla., Mark Lanier of Houston, Richard McCune of Redlands, Calif., Daniel Miles of Montgomery, Ala., Brian Panish of Los Angeles, Hunter Shkolnik of New York and Donald Slavik of Milwaukee.

He set a hearing May 28 to set a deadline for filing consolidated class action complaints, and a hearing June 25 on discovery.

As of May 12, lawyers had filed 299 federal cases and 99 state court cases, according to a Toyota motion for consolidation of 15 state court suits in Texas.

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