Toyota Financial Services was granted argument to compel arbitration for a 2015 class action case, which alleges the captive charged illegal fees when repossessing leased vehicles, according to a case ruling outline.
Plaintiff Gregory Thomas — a resident in San Rafael, Calif. — filed the putative class action case in June 2015. The suit claimed violations of California’s Consumer Legal Remedies Act and Unfair Competition Law. Los Angeles Superior Court Judge Jane L. Johnson granted Toyota’s argument to compel arbitration — which is a non-judicial, dispute resolution procedure — finding that the plaintiff’s signed class action waiver is enforceable.
Arbitration is generally a hearing with testimony from witnesses before one or more neutral persons. At the end of the hearing, the neutral persons issue a final and binding award regarding all subject matter submitted.
Thomas alleged Toyota had inflated deficiency balances by charging “supposedly” overdue lease payments, failing to give “refundable security deposits” and “adding additional repossession, auction, and storage charges,” according to the complaint report.
Defendant Toyota Motor Credit Corp. — dba Toyota Financial Services — is “taking advantage of this fact [that many consumers do not have sufficient knowledge and/or mathematical skills to understand and/or double check the lender’s calculations] by overcharging consumers whose leased automobiles it repossesses,” Thomas claimed in the report.
Back in November 2015, Judge Johnson had already issued a written tentative ruling indicating that she would “grant the motion,” as the captive had provided evidence that Thomas signed a lease agreement containing an arbitration clause.
In the wake of the U.S. Supreme Court’s landmark 2011 ruling in AT&T Mobility v. Concepcion, the agreements’ class-action waiver is enforceable. However, Judge Johnson — back in November — said she would “consider staying the case as requested by Vachon (who represented Thomas) to allow the California Supreme Court to rule in the case of McGill v. Citibank NA, in which the high court can decide whether Citibank can force arbitration of an insurance consumer class’s injunctive relief claims.”
Toyota is represented by Donna Wilson of Manatt Phelps & Phillips. Wilson declined to comment for this story. Toyota did not comment by press time.
