Toyota Motor Corp. agreed to pay a record $16.4-million fine for hiding safety defects related to sudden acceleration in 2.3-million vehicles Monday but at the same time denied that it broke any rules.

Regulators said Toyota failed to notify the National Highway Traffic Safety Administration for at least four months after learning that the accelerator pedals in some of its vehicles could stick and cause unintended acceleration. Under federal law, automakers are required to disclose defects within five business days.

“By failing to report known safety problems as it is required to do under the law, Toyota put consumers at risk,” said U.S. Transportation Secretary Ray LaHood

“I am pleased that Toyota has accepted responsibility for violating its legal obligations to report any defects promptly. We are continuing to investigate whether the company has lived up to all its disclosure obligations,” he said.

But although it agreed to pay the fine, Toyota expressed a different view, stating that making the payment was an expedient way to resolve the issue.

“We agreed to this settlement in order to avoid a protracted dispute and possible litigation, as well as to allow us to move forward fully focused on the steps to strengthen our quality assurance operations,” Toyota said in a statement.

The automaker said it “regretted” that the National Highway Traffic Safety Administration “tentatively concluded that they should seek a civil penalty. Toyota denies NHTSA’s allegation that it violated the Safety Act or its implementing regulations.”

“We believe we made a good faith effort to investigate this condition and develop an appropriate counter-measure. We have acknowledged that we could have done a better job of sharing relevant information within our global operations and outside the company, but we did not try to hide a defect to avoid dealing with a safety problem,” the company said.

To date, the largest federal penalty paid by an automaker was $1 million, levied against General Motors in 2004 for delaying a windshield-wiper recall.

Toyota had until Monday to pay the fine or contest it. Even though Toyota denied it was guilty, federal officials said paying the sizable fine would indicate that the automaker broke the law.
Plaintiff attorneys have said they planned to use the fine as evidence in litigation.

The Japanese automaker issued a recall for the sticky-pedal problem in late January, acknowledging that the accelerator-pedal assembly on some models could fail to return to the idle position in certain circumstances.

Several months before that, Toyota announced its largest-ever recall to address the risk that floor mats in some models could entrap the gas pedal and cause unwanted acceleration. That recall now includes 5.4-million vehicles. In addition, Toyota has launched recalls of several other models in recent months for safety issues related to braking and rust. In total, the automaker has issued roughly 10.5-million recall notices worldwide in the last seven months.

Toyota sent instructions to its European operations in September that explained how to fix accelerator pedals that could stick but decided not to similarly notify U.S. dealers and government regulators, according to an April 5 letter from NHTSA attorneys to Toyota.

The NHTSA letter indicated that Toyota may have known about the defect for at least three years.

It was not until Jan. 19 that Toyota notified NHTSA about the defect and then two days later issued its massive recall. Five days after that, Toyota halted sales and production of eight models because of the defect.

NHTSA said in its April 5 letter that it may seek additional fines related to the sticky-pedal recall.

Meanwhile, the agency has acknowledged it is investigating other Toyota disclosure practices that may have violated federal law and could result in further fines.

jerry.hirsch@latimes.com

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