Toyota Owners v Toyota Motor Sales U.S.A. Inc.
Toyota Settles Lawsuit Over Engine Oil Sludge
Toyota Motor Sales U.S.A. Inc. quietly settled a class-action lawsuit that covers about 3.5 million Toyota and Lexus vehicles that may have been damaged by engine oil sludge.
Details of the settlement, which allows for third-party mediation of sludge claims rejected by Toyota, have been mailed to 7.5 million current and previous owners.
Critics contend Toyota has told customers and dealers too little about sludge issues. They say some customers took vehicles with dead engines to dealers who had little or no knowledge of the problem and often assumed it was the owners' fault.
The lawsuit, filed in a Louisiana district court, is expected to be approved by the court in early February.
Sludge is gelled oil that fails to lubricate engine parts. It can lead to damage, often requiring a new engine at a cost that can exceed $10,000. Complaints about sludged engines have plagued several carmakers, but Toyota's troubles have been especially controversial in light of its reputation for vehicle quality.
The issue highlights a possible chink in the company's armor. Executives fear Toyota is growing too fast for its engineering resources. That could lead to quality snags and a tarnished reputation.
When a customer takes a sludge-caked engine to a dealership, there is usually a "clean-out" procedure. The head is pulled and a service technician tries try to steam out the sludge. If that doesn't work, the engine must be replaced.
Sludge can result from poor engine design; overly tight tolerances between moving parts; improper cooling; and poor maintenance by consumers.
Toyota insists the problem arises mainly when owners fail to change their oil frequently enough.
The agreement does not find Toyota at fault.
"The settlement doesn't mean that Toyota or Lexus vehicles are predisposed to develop oil gel," according to the notice.
Under terms of the settlement:
Owners of damaged vehicles have eight years plus 120 days from the original purchase date to file a complaint.
If Toyota denies the claim, owners can appeal to a judge-appointed third-party administrator..
Customers who have already made repairs may be able to recover the costs.
Only those who elect not to participate in the settlement can sue Toyota individually. The deadline for that choice was Dec. 31, 2006.
