New York, New York December 20, 2011 – A California district court judge has denied Toyota Motor Corporation’s motion to compel arbitration of claims relating to the recall of all 2010 Prius and Lexus HS 250h vehicles.

Plaintiffs allege that Toyota marketed these vehicles as “safe” and continued to sell and lease them until February 2010 when the company announced a nationwide recall to repair a defective braking system on these vehicles. However, plaintiffs allege that Toyota knew about the defect soon after they rolled off the factory floor in July 2009, some eight months prior to announcing the recall.

Plaintiffs are seeking monetary and injunctive relief for breach of warranty and contract, as well as violations of numerous California consumer protection laws.

Toyota argued that plaintiffs should be compelled to submit to arbitration, because the purchase contracts for their vehicles contain mandatory arbitration provisions. Plaintiffs argued that Toyota was not a party to the contracts and did not have the right to enforce the arbitration agreement and, even if it did, Toyota had waived that right by waiting nearly two years to even mention arbitration.

The court sided with plaintiffs and denied Toyota’s motion to compel in its entirety, finding that it amounted to forum shopping.

Toyota waited until after the court denied its motion to dismiss to notify plaintiffs that it intended to compel arbitration. In stating its disapproval of Toyota’s tactics, the court reminded Toyota that it “is not a wading pool in which a party may test the waters before a swim.”

Abbey Spanier Rodd & Abrams, LLP, representing plaintiffs as co-lead counsel in this matter, is a nationally recognized law firm specializing in large, complex litigation in the fields of securities, mergers and acquisitions, corporate governance, consumer protection, unfair employment practices and antitrust. The firm has litigated thousands of cases in both state and federal courts throughout the United States. Since the 1960s, Abbey Spanier has been committed to litigating with the highest level of excellence and integrity and has earned an excellent reputation for effective and efficient legal representation.

Click here to view the Court's Order.

Jeremy Nash, Esq.
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