U.S. Seeks $16 Million Penalty Over Toyota Recalls

Toyota Priuses lined up at a dealership in California. i i

hide captionDeals on the Prius, like those shown here lined up at a dealership in California, and other models are drawing customers and helping Toyota regain the market share of sales that it had before the gas pedal recall.

Ben Margot/AP
Toyota Priuses lined up at a dealership in California.

Deals on the Prius, like those shown here lined up at a dealership in California, and other models are drawing customers and helping Toyota regain the market share of sales that it had before the gas pedal recall.

Ben Margot/AP

The Department of Transportation said Monday it is seeking a fine of more than $16 million against Toyota for failing to promptly notify the government about sticky gas pedals. It's the largest penalty ever against an automaker.

Automakers are required to notify the government within five days if they know of a safety defect with their cars. The government says Toyota waited at least four months before telling the National Highway Traffic Safety Administration that accelerator pedals on some of its models could stick.

The problem was first confirmed in Europe at the end of September, but it wasn't until late January that Toyota recalled some 2.3 million vehicles in the U.S. for the defect.

In announcing the fine, Transportation Secretary Ray LaHood said the government now has proof that Toyota failed to live up to its legal obligations. In a statement, LaHood blasted Toyota, saying the company "knowingly hid a dangerous defect for months from U.S. officials and did not take action to protect millions of drivers and their families."

The $16.35 million fine is the largest the government can levy. Toyota reported earning $2 billion in the last three months of 2009. It has two weeks to notify the government whether it will accept the fine or contest it.

In a statement, the company said it has taken several important steps to improve communication with regulators and customers on safety-related matters, but it did not say whether Toyota will contest the fine.

Toyota has recalled more than 6 million vehicles in the U.S., and more than 8 million worldwide, because of acceleration problems in multiple models and braking issues in the Prius hybrid.

The Transportation Department said the penalty against Toyota is specifically tied to the sticking pedal defect, and Toyota could face additional penalties under the government's ongoing investigation.

The government has linked 52 deaths to crashes allegedly caused by accelerator problems in Toyotas. The recalls have led to congressional hearings, a criminal investigation by federal prosecutors, dozens of lawsuits and an intense review by the Transportation Department.

Toyota has attributed the problem to sticking gas pedals and accelerators that can become jammed in floor mats, and has cited no evidence of an electrical problem. Toyota dealers have fixed 1.7 million vehicles under recall so far.

Consumer groups have said electronics could be the culprit, and dozens of Toyota owners who had their cars fixed in the recall have complained of more problems with their vehicles surging forward unexpectedly.

Reviews of some recent high-profile crashes in San Diego and suburban New York have failed to find a mechanical or electronic problem. In the New York case, a police investigation found that the driver, not the car, was to blame.

Following the recalls, the Transportation Department demanded in February that Toyota turn over documents detailing when and how it learned of the problems with sticking accelerators and with floor mats trapping gas pedals.

NHTSA said documents provided by Toyota showed the automaker knew about the sticky pedal defect since at least Sept. 29, 2009, when it issued repair procedures to distributors in 31 European countries and Canada to address complaints of sticking pedals, sudden increases in engine RPM and sudden vehicle acceleration.

The government said the documents also show that Toyota knew that owners in the United States had experienced the same problems.

Toyota has provided NHTSA with more than 70,000 pages of documents during the investigation.

Material from the Associated Press was used in this report

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