Toyota -- The Latest Lawyer Feeding Frenzy

06/15/2010 05:12 am ET | Updated May 25, 2011

The Toyota lawsuit spectacle continues with hundreds of ambulance-chasing plaintiff's lawyers traveling to San Diego to get the court system to award them a pot of gold. They have filed at least 89* class action lawsuits seeking to represent the same group - Toyota owners whose vehicle's resale value may be affected by acceleration problems. It is yet another reminder of our out of control class action system.

To get some perspective on the Toyota mess, one need look no further than New York Times columnist Robert Wright who noted that over the next two years, while you have a 2.8 in a million chance of being involved in a fatal accident because of an unfixed problem in a Toyota, you actually have a one is 5,244 chance of being killed in a car accident "just by virtue of being an American." You wouldn't know that from the number of lawyers trying to cash in on this gusher. Make no mistake, it is fame and fortune, not necessity or the public good, that are the engines for this litigation machine (no pun intended).

The last time this issue was put in the hands of the plaintiff's class action lawyers the travesty of what they "accomplished" was laid bare. In the Ford Explorer rollover class action settlement, lawyers, purportedly on behalf of car owners - who suffered no rollover nor any other accident - sought damages for losses to the vehicles' resale value due to the bad publicity. Sound familiar? Well the result in the Ford Explorer case was a settlement in which the plaintiff's lawyers received $25 million in attorneys fees by claiming that the class members were receiving a benefit of $500 million. However, what class members received were coupons valued at $500 million towards the purchase of a new SUV, and only 75 were redeemed for a total class member payout of $37,500! So the class action lawyers got 666 times more money than the entire class! (No, I'm not making this up. It's really 666. You can check it on your calculator.) Remember the "good old days" when lawyers got a mere one-third of what their clients received? This does not bode well for class members in the Toyota litigation. If it walks like a duck...

While plaintiff's lawyers across America are jockeying for a role in the Toyota litigation, the sad reality of the class action system is not plaintiff's lawyers beating their chests over the evils of the Japanese car maker, but the Ford Explorer settlement. Yet another example of American's dysfunctional class action system. Lawyers use consumers' complaints to get coupons for class members while pocketing millions (or tens of millions) of dollars in attorneys fees for themselves.

In the words of Pete Seeger, "When will we ever learn?"

*Since this article was written, the number of lawsuits filed has increased to 138!