Toyota settles engine-goo suit

LOS ANGELES - Toyota Motor Sales USA Inc. has reached a tentative agreement to settle a class-action lawsuit by owners of certain Toyota and Lexus models who complained their car engines were damaged by oil sludge.

 

A federal judge in Louisiana is expected to give final approval to the settlement Feb. 7, said Sam Butto, a Lexus spokesman in Torrance, Calif.

The settlement applies to owners of some 1997-2002 model-year vehicles, including the Camry, some of which might have been damaged by engine oil gel or sludge.

In 2002, the Japanese automaker launched an expanded protection plan to cover mechanical problems caused by oil sludge, but some consumers complained it wasn't sufficient and sued the company.

"What the court settlement is doing is copying what we've already been doing the last four years," Mr. Butto said.

A phone call to attorney Gary Gambel, who represents plaintiffs in the case against Toyota, was not immediately returned.

Under the terms of the proposed nationwide settlement, the automaker will reimburse vehicle owners for the cost to repair oil sludge damage and other incidental costs for up to eight years from the date their vehicle was sold or leased.

The vehicle owners must have made reasonable efforts to keep up maintenance of their car, such as regular oil changes.

Car owners whose eligibility period ended before receiving notice of the settlement have until March 15 to make a claim, so long as the damage occurred within the eight-year period.

Toyota agreed to notify past and future customers of the settlement, and to give customers who have had claims for repair or reimbursement denied the option to submit claims to a neutral third party for arbitration.

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