Court Puts the Brakes on Out-of-State Plaintiffs’ Claims in Toyota Hybrid Vehicle Liability Case

An Eastern District of Texas court ruled on defendant Toyota Motor Corporation’s motion to dismiss on Monday, finding that the non-Texas plaintiffs failed to prove that the court had personal jurisdiction over the defendant, but allowing the Texas plaintiffs’ case to proceed. The class action lawsuit arose from allegations that several Toyota defendants did not properly design or manufacture brake booster pump assemblies for the certain vehicles, causing their braking systems to fail.

In his 40-page opinion, Judge Amos L. Mazzant, III considered multiple personal jurisdiction arguments. As for the non-Texas plaintiffs, 18 litigants hailing from eight different states bringing 46 different causes of action, the court found none of their specific personal jurisdiction theories availing. After assessing aspects of Toyota’s business, like the fact that it “designs, tests, and manufactures the vehicles at issue and disperses them through a self-designed distribution network,” the court held that the plaintiffs’ claims neither arise out of, nor relate to Toyota’s contacts with Texas.

In a footnote, the court acknowledged that though a disappointing result for the non-Texas plaintiffs, they are not out of options. It cited two other possibilities: three defendants remain against whom these plaintiffs could still recover damages, and the plaintiffs could probably bring claims against Toyota in the forums where they purchased their Toyota vehicles.

By contrast, however, the court held that two of the six claims brought by the Texas plaintiffs, including violations of the Deceptive Trade Practices-Consumer Protection Act and fraud by concealment, permitted the court to exercise personal jurisdiction over Toyota under the stream of commerce theory. Judge Mazzant reasoned that unlike the four other claims predicated on contracts the Texas plaintiffs entered into upon purchasing their vehicles, the two aforementioned causes of action were “founded on allegations that, prior to placing the relevant vehicles in the stream of commerce, (Toyota) defectively designed or manufactured the Class Vehicles and did not disclose this information to the buyers in attempt to induce consumer purchases—which is conduct sounding in (intentional) tort.” 

The court also chose to exercise pendent personal jurisdiction over the Texas plaintiffs’ four remaining counts, thereby allowing the case to proceed as to all causes of action. In its pendent jurisdiction analysis, the court reasoned that, among other things, the claims derived from the same nucleus of operative fact and keeping them together was in the interest of judicial economy.

Toyota is represented by Siebman Forrest Burg & Smith LLP, Shook Hardy & Bacon LLP, and Bowman and Brooke LLP. The plaintiffs are represented by interim lead counsel McCune Wright Arevalo LLP and interim liaison Steckler Gresham Cochran PLLC.