A former Prius owner who never had a major problem with her car during five years of ownership is suing Toyota. Judy Veitz doesn’t claim her car had any incidents of unintended acceleration, nor was she ever involved in a collision. Her lawsuit, filed in a California federal court, is what’s called a “pure economic loss” claim, and it’s just one of many pending against Toyota. Not only could Veitz wind up with a payout from the company, but she and her fellow plaintiffs stand to change a fundamental philosophy of our legal system.
Her claim sounds straightforward (if you believe in unintended acceleration): Because Toyota’s cars were involved in this phenomenon, every example of each model in question is now worth less on the used market. Toyota, the plaintiffs say, owes its customers the difference between what the cars were worth before people started crashing them and what they’re worth now.
Traditionally, U.S. law has said that unless there’s a contract or a specific statute, a person can only sue someone when there’s been actual harm to person or property. Barring real damages, pure economic-loss claims were unthinkable until the 1960s, at which point a few states began to allow them. The law has continued to evolve in this area, but it’s still far from a sure thing. Vehicle owners tried a similar suit a decade ago after the Ford-Firestone rollover debacle. They lost.
- Feature: It’s All Your Fault: The DOT Renders Its Verdict on Toyota’s Unintended-Acceleration Scare
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The plaintiffs’ lawyers chasing Toyota have had their setbacks. In May, the court rejected all claims filed by people who had not yet sold, or tried to sell, their cars at a loss. If they hadn’t sold them, the court reasoned, they hadn’t yet lost any money. (In theory, nothing would stop those current owners from selling their cars and then going after Toyota again.) People such as Veitz, who already unloaded their cars at an alleged loss, got the green light to proceed with their lawsuits.
More hurdles—such as NHTSA’s findings, which exonerated Toyota—still stand in the plaintiffs’ way, but which party prevails may not matter in the big legal picture. What does matter is that a court read the law as allowing people to sue based on economic losses. The current case is in a low-level court, so its decision isn’t definitive; higher-level courts are all but guaranteed to get involved in the near future.
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