Judge Gives Preliminary Approval to $20 Million-Plus Settlement in Prius Stalling Defect Class Action Lawsuit Against Toyota

A California federal judge has tentatively approved a $20 million cash plus extended warranty and other valuable benefits settlement in the Prius stalling defect class action lawsuit, reported Law360 on May 19, 2022, in a case in which Partner Donald Pepperman and Associate Emily Stierwalt are among the plaintiffs’ counsel. In the 2018 lawsuit, consumers alleged that defendant Toyota hid stalling problems in its 2014-2018 Priuses that could pose safety risks at high speeds.

U.S. District Judge Josephine Staton’s Order read: “The parties have reached a settlement at a relatively late stage of the proceedings, and the court finds that this factor favors preliminary approval. Negotiations took place for 17 months before the parties reached a settlement, and ‘consequently, every material issue underwent intensive scrutiny.’”

When the settlement was first announced in December 2021, Pepperman said: “It is a $20 million cash settlement with more in warranty and other benefits.” The district court in 2019 rejected Toyota’s effort to dismiss the consolidated class action and in 2020 rebuffed the company’s attempt to send the matter to arbitration. A final settlement fairness hearing is scheduled for January 2023.