Toyota loses legal round on ruling that safety evidence was hidden

Neil Roland
Automotive News
September 14, 2010

WASHINGTON — Preliminary evidence shows that Toyota Motor Corp. hired a lawyer to destroy or hide incriminating safety documents from vehicle owners who sued the company over rollovers, an arbitrator has ruled.

The ruling was a procedural victory for former Toyota lawyer Dimitrios Biller in what is shaping up as a protracted legal battle with the automaker over his 2007 departure.

The Sept. 9 decision means Toyota can’t claim attorney-client privilege to keep some internal documents cited by Biller from being used in the case.

Biller, who worked at Toyota’s U.S. headquarters in Torrance, Calif., from 2003 to 2007, alleged he was hired to fraudulently withhold documents from plaintiffs who had sued the company after crashes.

The arbitrator, retired federal Judge Gary Taylor, of Orange, Calif., said he based his finding on Biller’s testimony and on a review of internal Toyota documents.

“Mr. Biller’s testimony is probably sufficient by itself to establish a prima facie showing,” the arbitrator wrote. “He was a key lawyer in Toyota’s litigation department, having firsthand knowledge of much significant evidence.”

A prima facie finding is “a showing of some foundation in fact” that contains evidence “sufficient for a reasonable inference to be drawn,” the eight-page decision said.

The ruling doesn’t address whether Toyota acted illegally or whether Biller will prevail. The case still has to be tried, with Biller scheduled to testify in mid-November.

After resigning from Toyota, Biller received a $3.7 million severance package.

The automaker sued him last year for $33.5 million, saying Biller broke the terms of that severance agreement by taking company documents. Biller countersued, alleging defamation and improper treatment that led to his resignation.

The two suits have been consolidated under court-supervised arbitration.

A Toyota spokeswoman said the company would continue to fight Biller’s “inaccurate and misleading allegations.”

“We are confident that Toyota will be vindicated once we have the opportunity to fully contest the allegations and all evidence is considered,” spokeswoman Celeste Migliore said. “Toyota takes its legal obligations seriously.”

‘Books of Knowledge’

Biller, 47, alleged he was hired in part to conceal the so-called “Books of Knowledge,” a collection of sensitive electronic records about vehicle design, testing and performance. By withholding this data, Toyota managed to avoid paying much larger awards for rollovers and other accidents to plaintiffs, Biller has contended.

In an interview today, Biller said he introduced about 170 internal documents at the hearing. As a result of the arbitrator’s decision, the documents no longer are protected by attorney-client privilege, he said.

If Biller is subpoenaed by plaintiff lawyers in other suits against Toyota, both his upcoming testimony and the documents he has introduced possibly can be used in these cases, he said.

Toyota faces a class action suit by vehicle owners alleging injury from sudden acceleration. The automaker also faces suits alleging that plaintiffs settled their cases after being deceived by Toyota about the evidence available to them.

In one pending case in Texas, Pennie Green has sued on grounds that she settled for $1.5 million after Toyota defied a court order requiring disclosure of safety records. Green became a quadriplegic at age 16 as a result of a 2005 rollover accident while driving a 1997 Camry.

Biller negotiated that settlement with Green while he was with Toyota.

He said in an interview that Toyota would have had to pay $10 million to $12 million to Green if she had been granted access to information requested by her lawyer about the Camry’s head-clearance standards.

Internal e-mails

The arbitrator last week held that internal Toyota documents, many of which were e-mails from Biller himself, “appear to support Mr. Biller’s contentions” on a prima facie basis. These e-mails have not been made public.

One document reviewed by the arbitrator was a Dec. 6, 2006, e-mail from Biller discussing “nondisclosure of the Books of Knowledge.”

In the e-mail, a copy of which has been reviewed by Automotive News, Biller told superiors: “Plaintiff’s discovery efforts directed at [Toyota Technical Center] were getting too close to requiring TTC to produce the Books of Knowledge.”

The Biller e-mail also said Toyota Motor Sales U.S.A. “concluded that it would be better to pay a premium to settle this case and avoid producing the Books of Knowledge before Toyota and its counsel had an opportunity to inspect those materials.”

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