“Standing” to Sue: Homeowners To Have Their Day in Court Against ‘Backdrop of National Housing Crisis’

Almost two years ago several homeowners filed lawsuits accusing eight major homebuilders of causing them serious financial injuries.  These injuries came to light when the housing market crashed and these normal, responsible homeowners saw their communities deteriorate around them.  

They were traditional homebuyers who bought homes in new developments advertised as “stable” and “traditional”; they were owner-occupants in communities where homes were not supposed to be sold to investors.  But it turned out that the vision they bought into was just a glossy sales campaign:  in fact, the developers had filled the communities with unqualified buyers who stood no chance of weathering an economic downturn.  

Taking action, our clients filed lawsuits alleging that the builder/developers deceived them about the nature and quality of the communities they were developing and of the homes they were building, marketing, and selling.  Our clients overpaid for what they really got.  And now that the curtain has been drawn back on the housing crisis, it’s clear that their homes and communities are less desirable to live in and suffered home value declines exacerbated by the true nature of these communities.  Developments flooded with high-risk borrowers have yielded a landscape of foreclosures, short sales, and blight. 

But there was one problem:  the homebuilders argued that because our clients hadn’t sold their homes, they hadn’t actually suffered an injury.  Legally speaking, they argued that the plaintiffs didn’t have “standing” to bring a lawsuit – they assert that responsible people who have stayed in their homes haven’t actually lost anything in this crash.  

Last week one of the most influential courts in America disagreed, allowing the homeowners’ suit to continue and, in the process, issuing one of the most recent appellate-level pronouncements on the Constitutional doctrine of standing. 

As reported by Reuters:

Against what the court called "the backdrop of the national housing crisis," the 9th U.S. Circuit Court of Appeals in San Francisco said last Wednesday a lower court erred in concluding the homeowners lacked standing to pursue their fraud claims.

You can read the full ruling here. 

The Ninth Circuit’s opinion debunked once and for all the strained argument that homeowners somehow could not claim they were harmed merely because they had not yet “realized” a loss through sale of their homes at a loss.   As Americans know all too well, declining real estate values have an immediate financial impact on people’s lives even without a sale. 

Tracing Supreme Court precedent as well as decisions from the Ninth Circuit and other circuits, the court concluded definitively that “a present decrease in the economic value of one’s home is a cognizable and concrete injury-in-fact.”

The Ninth Circuit’s opinion also rejected the homebuilders’ argument that homeowners could not claim an injury based on being misled into paying more for their homes than the homes were worth.  No better was the argument that homeowners weren’t wronged because they had received the “benefit of their bargain” and that buyers merely paid prices in line with what the market supported.  The court noted that these homeowners allege that the market for homes in these communities was set not by competition or on the merits, but by the homebuilders’ misrepresentations about what it was they were selling.  

This is an early victory for our clients and other homebuyers who, pursuing the American dream of home ownership, became victims of opportunistic players in the housing industry.  We look forward to returning to the trial court. We intend to prove the allegations made in these cases and hold those who profited from this wrongdoing accountable. 

For more information on joining the lawsuit, click here.

Comments (0)

Toyota Deja Vu: Automaker Issues Another Recall For Brake Concerns

Toyota once again finds itself in the crosshairs of public and media outcry. It issued its 16^th recall Oct. 22, 2010, which pushed the total number of vehicles recalled this year past the 10 million mark.

The Simmons law firm has been investigating Toyota since 2009, before the automaker recalled about 8.5 million cars and trucks worldwide over a range of problems, including unintended acceleration, and was widely criticized by the government and consumer safety groups.

Unintended acceleration is a dangerous situation caused by electronic faults or when gas pedals jam or get stuck under floor mats, causing vehicles to speed out of control. 89 fatalities have been attributed to unintended acceleration, according to the National Highway Traffic & Safety Administration.

For more information about unintended acceleration, visit my previous blog post.

The most recent recall stems from problems involving the brake & fuel pumps. In a Toyota press release, the car company explains that if consumers don’t use brake fluid made by Toyota, then part of the brake could become distorted, allowing the fluid to slowly leak and eventually causing braking performance to “gradually decline.”

Toyota is doing its best to favorably spin the reasoning for the most recent recall. A Toyota spokesperson told the New York Times last week that the voluntary recall is the company’s attempt at being “more forthcoming about potential defects.”

“Every time we announce a recall, that is a step toward increasing quality,” a spokesman for Toyota in Tokyo, Paul Nolasco, told the New York Times. The pedal-related recalls had “brought it home to Toyota that we need to refocus on quality,” he said.

I think it’s a shame that it’s taken 89 deaths, 6,200 complaints and 10 million cars for Toyota to learn that even big businesses are held accountable. Toyota should have followed Tylenol’s example during the cyanide poisoning cases and taken steps to correct the problems as soon as the first reports of fatalities occurred.

As the counsel of record in the first-filed class action complaint filed in November 2009 against Toyota, our personal injury attorneys have become adept at seeing through Toyota’s flimsy attempts at transparency. If you or a loved one were injured in a car accident due to unintended acceleration in a Toyota or Lexus vehicle, call 1-866-468-8631 to receive a free consultation.

For more information about the Simmons firm investigation into Toyota’s serious safety concerns, click here. Comments (0)

What's Going on With Toyota? Recall Prompts Panic, While Reports of Unintended Acceleration Car Accidents Emerge

Derek Brandt is a partner at the Simmons Law Firm. He specializes in commercial litigation and currently represents the owners of Toyota and Lexus vehicles in the first-filed class action relating to sudden unintended acceleration, along with co-counsel McCuneWright LLP and Hanly Conroy Bierstein Sheridan Fisher & Hayes LLP. Derek and his co-counsel are also currently investigating potential unintended acceleration lawsuits for families injured in a recalled Toyota vehicle.

A lot of people seem to be asking this question lately.  Well, what is going on with Toyota?
 
Toyota finds itself at the crosshairs of governmental, public, and legal scrutiny these days.  Some commentators are calling this the most profound corporate public relations test since the Tylenol cyanide recalls of 1982.  But the truth is, while Johnson & Johnson was and has been almost universally lauded for its careful, professional and responsible handling of the Tylenol situation almost three decades ago, Toyota seems almost determined to make every misstep it can. 

Over a period of almost ten years, at least seventeen different Toyota and Lexus models have been the subject of driver complaints relating to sudden unintended acceleration.  Thousands of complaints have been registered with the National Highway Traffic Safety Administration (“NHTSA”) or with Toyota. 

Many drivers who have experienced these harrowing unintended accelerations say that their car shot like a bolt, on its own, and that nothing they could do would stop it. 

These complaints have been linked to hundreds of car accidents and multiple fatalities.  But not until the high-profile accident killing off-duty California Highway Patrol officer Mark Saylor and three members of his family in August 2009 did Toyota finally acknowledge that there might actually be a problem. 

The Saylors’ Lexus accelerated out of control to over 100 mph, while they made a frantic 911 call explaining that they couldn’t slow the vehicle.  Forced, finally, to respond, Toyota offered this diagnosis:  blame the floor mats.  But Toyota couldn’t scapegoat the floor mats when a Texas family was killed in an inexplicable accident the day after Christmas 2009 – and police discovered their floor mats in the trunk. 

It was then that Toyota started to make noise about brake pedals and accelerator pedals.  Finally, in January of this year, Toyota temporarily halted production of certain models and told the public that it had a “comprehensive” fix for the sudden unintended acceleration problem. 

But, somehow, that “comprehensive” fix doesn’t extend to many of the models and model-year vehicles that have experienced sudden unintended acceleration incidents.  And, while Toyota claims that the accelerator problem is due to friction or wear-and-tear which can be exacerbated over time, Toyota’s fix, somehow, doesn’t extend to the oldest model-year cars which have experienced the problem. 

Putting it all together, it may be awhile before we  know whether Toyota even now has properly diagnosed the problem that it denied for so long and then blamed first on floor mats, and the on brake pedals, and then sticky accelerators.

Most of us know now that the Tylenol cyanide poisoning was believed to have been perpetrated by a third party over which Johnson & Johnson had no control.  But that doesn’t mean that we can’t compare Johnson & Johnson’s handling of that very serious situation with Toyota’s response to its current mess. 

Seven people within a single regional market died from the Tylenol poisonings.  Within six days of the first death, Johnson & Johnson instituted a nationwide recall of Tylenol products.  Toyota, by contrast, spent years denying a problem even existed with sudden unintended accelerations and only began to make piecemeal fixes while ignoring its customers' and the public’s safety, eventually settling on a “comprehensive” fix that seems to be anything but “comprehensive.”   

Undeniably, there has been a lot of talk about the Toyota recalls suddenly.  But beyond talk, along with our co-counsel at McCuneWright LLP and Hanly Conroy Bierstein Sheridan Fisher & Hayes LLP, we represent the owners of Toyota and Lexus vehicles in the first-filed class action relating to sudden unintended acceleration.  So, we have been at the forefront of this issue for some time. 

And, on February 3, 2010, we re-enforced our leadership role by filing a Motion for Preliminary Injunction asking the court overseeing that case to order Toyota to extend its recall to all of the model and model-years subject to sudden unintended acceleration and to order Toyota to employ a failsafe brake over-ride mechanism which can prevent sudden unintended acceleration accidents – no matter what their root cause.

So, if you or a loved one has been injured in an accident relating to a Toyota or Lexus sudden unintended acceleration, please contact us.  We’ve been at the front of this litigation since the beginning.

Comments (0)