A man received a $21 check as part of the $1.1 billion Toyota settlement that was the result of the unintended acceleration, which some Toyota vehicles demonstrate. The man wondered if this was fair, and complained that it seemed disproportionate as compared to the sums received by the attorneys who represented the class.
Of course, because he was not specifically injured by a Toyota vehicle’s dangerous behavior, he received a smaller claim. But he misunderstands one of the important features of class action litigation.
It performs a regulatory function where governmental actors either lack authority to regulate a particular industry or lack the political will to enforce existing regulations. Class action litigation often punishes wrongdoing by companies, with the hope of preventing a repetition in the future
The auto industry is vast and powerful. In 2013, General Motors spent $3.1 billion on advertising. Not engineering. Not payroll, not raw materials and not safety testing. $3.1 billion on advertising.
By comparison, the National Highway Transportation Safety Administration (NHTSA) had a yearly budget of about $800 million, of which $554 million of that goes to the states, leaving $246 million for all of the agencies operations. GM had spent that much on advertising by January 28th of that year.
And there are many politicians who are happy to keep the budget of an agency like NHTSA at such an inadequate level that it will never interfere with the auto company’s mistakes and defect.
The GM debacle involving defective ignition switches which has killed numerous drivers and the Takata airbag issue have been known for over a decade. NHTSA never even initiated an investigation, let alone a recall of the defective vehicles.
It was only after private attorneys, suing for injured or deceased victims of these vehicles that eventually generated the publicity and long-delayed recalls of vehicles containing these defective and sometimes deadly systems.
Rather than worry if the $21 will cause him to need to pay extra when he buys his next car, he should work to see that NHTSA is properly funded and is able to protect motorists’ safety.
Blogs.wsj.com, “A $21 Check Prompts Toyota Driver to Wonder Who Benefited from Class Action,” Jacob Gershman, November 2014