Toyota’s $1 Billion Fine Begs Question: Do We Really Want To Regulate…

28 Май 2015 | Author: | No comments yet »
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Toyota’s $1 Billion Fine Question: Do We Really Want To This Way?

Earlier year I had an episode of unintended I was moving my car at the iceboat ramp, oversized Sorel boots, and the engine revved uncontrollably. It was one of heart-in-the-throat, terrifying moments, as the snarled like an uncaged and I wondered if I was going to crash another car or roar off across the Then I realized my boot was the accelerator and the brake pedal at the time. I lifted my foot and the went away.

The evidence suggests that’s what’s most cases of unintended involving Toyota vehicles. a floor mat tangled the accelerator and there, but the government has failed to any evidence of an electronic or mechanical to explain why Toyota vehicles accelerated out of control. There is a incorrect explanation: Age. The inside Toyota’s electronics designed to … people the age of 60, including the 76-year-old woman who an Oklahoma jury to hit Toyota for $3 over an accident that her 70-year-old passenger.

Now the Wall Street Journal Toyota is close to paying $1 to settle a federal criminal into its alleged failure to the alleged incidents of unintended that federal authorities already concluded mostly from operator error. comes after Toyota to pay more than $1 billion to private suits based on the theory that Toyota had suffered economic damages their cars were less after plaintiff spread reports of an electronic that caused unintended Which the government failed to

If this all sounds a little get used to it. We are now firmly in the era of regulation by intimidation, whether it is the government the big banks for losses on mortgage-backed that Fannie and Freddie promote with excessively underwriting standards, or state general extracting $25 billion mortgage servicers over “fraud” that mostly failing to give defaulted as many options to try and restructure loans as they felt to.

Regulators, prosecutors and attorneys have learned a valuable from their private class-action attorneys. Build a big case, and the target company settle. The alternative can be fiduciary Risking the entire net worth of the on a jury’s whim. The Oklahoma that determined it was Toyota’s that a 76-year-old woman her car exiting the highway demonstrates the That verdict, if upheld to might have provided the requiring Toyota to admit in thousands of other cases.

a problem when government adopt this sort of however. It invites corruption of its The best example is the 1997 state AGs negotiated with Morris and the other big tobacco One could be charitable and call the AGs incompetent for negotiating a deal created a de facto cartel for the cigarette manufacturers, instantly their profitability, while a stream of hundreds of millions of a year in fees for the private who initiated the litigation. But then the fact that the Philip et al also handed over than $100 million to the AGs in payments to their professional the National Association of Attorneys NAAG (critics call it the Association of Aspiring Governors) the money reimbursement of expenses or such thing, but it’s the of paying a nice honorarium to the Benevolent Association just to sure everybody keeps fair.

Toyota 1/X

This sort of coerced is becoming common. A fight in New York recently when Andrew Cuomo tried to New York’s $613 million of a $13 billion settlement NYAG Schneiderman and others negotiated JPMorgan to settle mortgage Cuomo’s demand was entirely Do we really want state to demand settlement money their targets, then how to spend it? Self-financed prosecutors, towns that pay the bills traffic tickets, are not a good over the long haul. to hand the money to the legislature, at least has a democratic process for money.

But the governor folded after the solicitor general noted Cuomo, as AG, had kept similar proceeds. As noted by Capital the former AG had steered $90 million in settlements to a not-for-profit organization and overseen by his office, to establish and a health care reimbursement as well as “consumer education And an earlier, $13.5 million of student-lending claims lay mostly at the AG’s office until last day on the job, when he awarded it to the New York Public Research Group .


The potential for petty corruption is huge. Who’s to know a staff attorney in one of these is in a position to dial up or dial demands based on the prospects for a job after his or her public-service turn is Who’s examining the non-profits who get money to make sure aren’t staffed with supporters? It’s all reminiscent of the challenged practice known as cy where judges award that will never be in class actions to non-profits they and plaintiff lawyers Is it paranoid to suspect that sometimes goes to organizations benefit in some way the people who are it out?

Finally there is the problem of regulatory capture. prosecutors and regulators get used to the companies they oversee for amounts of money, it can become a And like most habits, it can addictive, shifting power to the that supplies the juice. I if that process is occurring too-big-too-fail banks, which become milk cows for It definitely happened with the settlement, where the cigarette reshaped the industry to their Is the auto industry next?

Toyota 1/X
Toyota 1/X
Toyota 1/X
Toyota 1/X
Toyota 1/X

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