Toyota Pays Maximum $32 Million Fine For Two Safety Defect Recalls

Dec. 21, 2010 — -- Toyota has been hit with a record $32.425 million in new civil penalties - the maximum allowed under federal law -- because the automaker failed to properly report safety defects to federal regulators.

The fines were levied after two separate Department of Transportation (DOT) investigations into Toyota's handling of recalls relating to sudden acceleration and steering issues. The steering rod probe was spurred in part by an ABC News report on a Toyota truck crash that killed an Idaho teenager.

"Safety is our top priority and we take our responsibility to protect consumers seriously," said U.S. Transportation Secretary Ray LaHood in a statement. "I am pleased that Toyota agreed to pay the maximum possible penalty and I expect Toyota to work cooperatively in the future to ensure consumers' safety."

In one of the cases, Toyota agreed to pay $16.375 million after the National Highway Traffic Safety Administration (NHTSA) found that Toyota was late in notifying the federal government that accelerator pedals in its vehicles could became entrapped by floor mats and cause vehicles to accelerate out of control.

Toyota initially recalled 55,000 floor mats because of sudden acceleration concerns in September of 2007. However, it wasn't until October of 2009, in the wake of a highly-publicized fatal crash in Santee, California, that Toyota conducted a more comprehensive recall involving almost four million vehicles. Federal law requires automakers to notify regulators of safety defects within five days.

In the other announced case, Toyota agreed to pay a $16.050 million fine over allegations that it improperly delayed a recall of almost one million trucks and SUVs over defective steering rods. The National Highway Traffic Safety Administration (NHTSA) decided to conduct its own inquiry this May, reviewing new information suggesting that Toyota knew of complaints over breaking steering rods in the U.S. prior to its announced recall in September of 2005.

The new cases emerged during a lawsuit filed against Toyota by the family of 18-year-old Levi Stewart of Fairfield, Idaho, who was killed when his Toyota truck rolled over. Stewart's family blamed the crash on a defective steering rod and says the accident could have been prevented if Toyota had issued the recall in a timely manner.

During discovery in the case, Toyota turned over 40 previously undisclosed cases where American owners had complained directly to Toyota about steering rod problems before October 2004, when Toyota issued a recall in Japan of 330,000 vehicles to replace the steering relay rods, which were prone to breaking under stress. NHTSA did not learn of the cases until an ABC News investigation earlier this year.