Toyota agreed on Friday to a settlement with the families of two women in a fatal crash the morning after an Oklahoma jury became the first to find the company responsible for the unintended acceleration of a car.
The verdict came after Toyota had won its first three trials over the acceleration issue. Legal analysts said it could embolden plaintiffs in hundreds of other lawsuits that have been filed against the automaker.
Terms of the settlement were not disclosed. On Thursday, the jury awarded the families of two Oklahoma women $1.5 million each in compensatory damages, determining that the 2005 Camry they were riding in suddenly accelerated through an intersection and hit an embankment in 2007. The driver, Jean Bookout, 82, was injured, and her passenger, Barbara Schwarz, 70, died.
The jury found that Toyota had acted with “reckless disregard,” despite reports of problems with its cars, and as a result was about to begin deliberations on punitive damages when the settlement was announced. Punitive damages can carry far higher awards.
“We are fully convinced that Toyota’s conduct from the time the electronic throttle control system was designed has been shameful,” J. Cole Portis, a lawyer for the plaintiffs, said. “We appreciate that the jury had the courage to let Toyota and the public know that Toyota was reckless.”
Toyota, which recalled millions of vehicles and faced a series of government fines over the issue, said it would not let up from its aggressive defense.
“While we strongly disagree with the verdict, we are satisfied that the parties reached a mutually acceptable agreement to settle this case,” Carly Schaffner, a Toyota spokeswoman, said in a statement. “We remain committed to providing our customers with safe and reliable vehicles, and we will continue to defend our products vigorously at trial in other legal venues.”
Both Toyota and the plaintiffs may have preferred to settle before the punitive damages portion of the case, said Carl Tobias, a professor who specializes in product liability at the University of Richmond School of Law.
“Rather than risk the punitive damage award, I assume Toyota wanted to settle,” Mr. Tobias said. The plaintiffs may have wanted to settle to receive compensation sooner and avoid the cost and risk of losing on appeal.
Legal analysts said the verdict could give a lift to plaintiffs in other cases. The Oklahoma case is the first in which a jury found a Toyota vehicle’s electronic throttle control system was defective.
“I think that’s critical to the case going forward,” Mr. Tobias said. Toyota blamed the crash on driver error.
Toyota will now bear the burden of proving to juries that something other than a defect in the vehicle caused the unintended acceleration, said Gregory Keating, a professor at the University of Southern California Gould School of Law.
He added that the verdict “suggests that absent specific evidence of another cause, the default conclusion is that sudden acceleration is caused by a defect in the car for which Toyota is responsible.”
Since 2009, Toyota has recalled more than 11 million Toyota and Lexus vehicles in connection with problems including floor mats that caused the accelerator to become stuck, dealing a severe blow to its sterling reputation for quality. The 2005 Camry in the Oklahoma trial was not included in the recall.
Since the recalls, the automaker had staged a turnaround as it steadily resolved its legal issues. In May, it reported its best earnings in five years.
And in July, a federal judge in California approved a $1.6 billion settlement in a class-action lawsuit against Toyota to compensate vehicle owners who suffered financial losses after widespread reports of the unintended acceleration in 2009 and 2010. That settlement covered economic losses and not liability in wrongful death or personal injury cases.
This month in California, a jury cleared Toyota of blame in a case involving 66-year-old Noriko Uno’s fatal crash in her 2006 Toyota Camry. The jury instead suggested that a co-defendant who struck Ms. Uno’s car and sent it hurtling the wrong way down a one-way street pay $10 million to the victim’s family.
The lawyer for Ms. Uno’s family argued that the Camry should have included a brake override system that could have prevented the crash. Toyota blamed the accident on driver error.
The Oklahoma case is extraordinary because it is the first to try the electronic and software defects that plaintiffs say existed in the Toyota models that accelerated suddenly, and because the jury rejected Toyota’s driver-error defense, said Moses Lebovits, a lawyer representing the family of a woman who suffered severe brain injury after crashing her Toyota Prius in 2010. That case will be tried in a California state court next year.
The case is also significant because it is a verdict in a jurisdiction considered to be conservative, and the amount of compensation awarded is substantial, he said.
“This loss coupled with ongoing negative publicity may well have a far more substantial impact on the Toyota brand that should be of much greater concern to the automaker,” Mr. Lebovits said.
The next trial is scheduled for Nov. 5 in Santa Ana, Calif. It will be the first case against Toyota to be tried in a federal court.