The judge stated that only California car owners, not those in other states, can take advantage of the state's favorable consumer-protection laws. The action drastically cuts the size of a potential class action against Toyota filed on behalf of consumers. The Toyota litigation could cost the automaker upward of $3 billion if it lost the federal case, according to recent rumors, so the move could result in a major boost for the stricken company, as some 70% of cases have been filed outside of the sunny state.
In addition, U.S. District Judge James V. Selna said that Toyota owners who rely on the carmaker's safety and reliability guarantees will not be able ask for damages in California if the car was bought outside the state.
"We're gratified the court has recognized that allowing a few handpicked plaintiffs to set the course for customers throughout the United States through this kind of 'procedural engineering' would go against established law, diminish Toyota's substantive rights and undermine the purposes of these multidistrict proceedings," said Toyota spokesperson Celeste Migliore told Inside Line.
"Importantly, approximately 70 percent of the economic-loss cases in this litigation were originally filed outside of California, and many of those states would not allow the claims brought by customers whose vehicles have never manifested a defect," the spokesperson added.
Back in February, Toyota cited a new NASA report that found no electronic defects in its vehicles in its second attempt to dismiss a sudden acceleration class-action lawsuit.
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