Settlement Reached in Toyota Prius Class Action Lawsuit

Toyota Prius hybrid

Despite its popularity, the Toyota Prius is not without problems. After five years of litigation, Toyota and consumers reached a $20 million settlement in December 2021 to resolve a class action lawsuit that raised claims about a serious defect in these vehicles. Stemming from a recall that impacted more than 750,000 2010-2014 Prius models, the suit alleged that Toyota intentionally concealed a stalling problem related to a faulty inverter component. According to drivers, the issue with the part could cause sudden stalling while driving at high speeds, creating a significant safety risk.

What is the Toyota Prius Defect?

Certain model years of the Toyota Prius are equipped with an inverter designed to put vehicles into a fail-safe mode should the hybrid system be faulty or overheat. However, because of a defect in the component, the “limp home” driving mode might not function properly in the event of fault in the hybrid system. If this occurs, the vehicle can lose power and suddenly stall without warning.

This issue doesn’t only cause an inconvenience to drivers by potentially leaving them stranded, but it also presents a safety hazard that increases the chances of a crash occurring. In addition, the problem affects the fuel efficiency of the vehicle — the reason many consumers opt for hybrids in the first place.

While the first recall included only 2010-2014 Prius models, the manufacturer later expanded it to include other models. In connection with the recall, Toyota issued a software update and agreed to repair or replace the inverter at no charge to owners.

What Are the Terms of the Class Action Settlement Agreement?

Under the terms of the $20 million settlement agreement, Toyota agreed to pay for the class counsel’s attorney fees and distribute service awards to each class representative in the amount of $5,000. Class members will be provided with the following:

  • Damages for repair costs or replacement of the defective parts
  • Reimbursement for towing costs in the event the vehicle broke down
  • Compensation for any rental car expenses incurred during repairs
  • Extended 20-year warranty coverage from the date of first use

The manufacturer has also agreed to provide complimentary towing and rental cars to members of the class who must bring their cars into the shop for repairs. Importantly, the $20 million settlement agreement is uncapped — Toyota is required to make additional deposits into the fund until every valid claim has been paid.

If you received a class action notice regarding this lawsuit and did not opt out, you may be entitled to benefit from the settlement.

Do Toyota Vehicles Have Other Problems?

Unfortunately, defects in Toyotas are not uncommon — there have been a number of other safety issues identified in these vehicles. Recently, a recall was announced concerning certain 2022 Prius and Prius Prime vehicles. A software error was found in the affected cars that can cause a computer control to incorrectly determine it does not have accurate data regarding the transmission position if it changes quickly when the computer is checking the information. If this happens, the hybrid system will shut down which can result in loss of motive power while driving, increasing the risk of an accident.

Notably, Toyota was also impacted by the massive Takata airbag recall as well as a highly publicized recall regarding incorrect floor mats. Consumers who own the Prius models have also complained about noxious fumes emanating from the HVAC system, excessive oil consumption, engine problems, headlight failure, and incorrect fuel gauge reading. If you plan to purchase a Prius or any other Toyota model, it’s crucial to do your diligence on that particular vehicle before making the investment.

When is a Toyota Prius a Lemon?

If your Toyota Prius has issues or was subject to a recall, it doesn’t necessarily mean it’s a lemon — there are specific legal criteria that must be met. To obtain a refund or replacement vehicle under California’s Lemon Law, the vehicle must have been purchased within the state and still be under the original manufacturer’s warranty at the time the nonconformity occurs.

The defect must also be substantial and impair the safety or value of the vehicle. Additionally, it must also be one that cannot be remedied after several reasonable repair attempts have been made. Four repair attempts are usually sufficient to prove your car is a lemon — but only two trips to the repair shop may be necessary if the problem could cause a serious safety hazard.

In California, a car is also legally presumed to be a lemon if the problem arose within the initial 18,000 miles driven or within the first 18 months after delivery. This can often make it easier for a consumer to bring a lemon law claim to court. Critically, an owner has four years from the date the issue is discovered to file a lawsuit under the lemon law.

Contact an Experienced Southern California Lemon Law Attorney

If you bought a Toyota Prius or any other type of vehicle with problems that can’t be fixed, it’s best to contact a knowledgeable lemon law attorney who can advise you regarding your rights and remedies. The attorneys at The Ledbetter Law Firm provide skillful advocacy and reliable representation to consumers who have been inconvenienced and burdened by vehicles that don’t conform to their warranties — and fight to achieve favorable results in their cases.

The Ledbetter Law Firm assists people in Southern California who have experienced lemon law issues with their vehicles in obtaining the refund or replacement vehicle to which they are entitled. With offices conveniently located in Torrance and San Diego, California, telephone and video conferencing options are also available. Call (424) 407-3487 to schedule a consultation with a California Lemon Law attorney today.