# Toyota Faces Class Action Lawsuit Over Emissions Cheating in Forklift Engines
## Unveiling Toyota’s Emissions Scandal: What Every Investor Needs to Know
### By Jonathan Stempel
**(Multibagger)** – Toyota (NYSE: TM), the renowned Japanese automaker, is embroiled in a proposed U.S. class action lawsuit alleging emissions cheating involving nine of its forklift truck engines. This legal action, initiated by several forklift purchasers, was filed on Sunday in the San Francisco federal court against both Toyota and its affiliate, Toyota Industries (OTC:), the largest forklift truck manufacturer globally.
### The Core of the Allegations
The lawsuit follows an internal investigation by Toyota that uncovered instances where the company manipulated software or substituted engines during emissions tests. Such practices allowed the forklifts to perform better during testing compared to real-world conditions. This discovery led Toyota to suspend some forklift sales in Japan in March 2023 due to the emissions concerns.
### U.S. Regulatory Scrutiny
The plaintiffs argue that Toyota’s misconduct only came to light following a query from the U.S. Environmental Protection Agency (EPA), despite no formal enforcement action being taken by U.S. regulators. They assert that Toyota attempted to contain the fallout within Japan, but the company’s "toxic culture of fraud, negligence, and noncompliance" compromised forklift engine certifications across all markets, including the U.S.
### Plaintiff Details and Claims
The plaintiffs in this lawsuit include Broadmoor Lumber & Plywood, Marders, and Ferraro Foods. These companies, based in South San Francisco, California, Bridgehampton, New York, and Piscataway, New Jersey, respectively, claim they would not have purchased Toyota’s forklifts had they been aware of the vehicles' failure to meet emissions standards and their subpar performance. The lawsuit seeks unspecified compensatory and punitive damages, along with full refunds for the affected forklifts.
### Toyota’s Internal Findings
Toyota’s internal probe revealed that the engine division at Toyota Industries fostered a "contractor’s mentality" and a culture that trivialized industrial vehicles. This environment resulted in executives exhibiting "low risk sensitivity" to emissions regulations, further exacerbating the issue.
### Case Reference
The lawsuit is formally titled Broadmoor Lumber & Plywood Co et al v Toyota Industries Corp et al, and is filed under the U.S. District Court, Northern District of California, No. 24-06640.
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### Analysis for Investors and Consumers
**Understanding the Issue:** Toyota, a global leader in automotive manufacturing, is accused of cheating on emissions tests for its forklift engines. This has led to a class action lawsuit in the U.S., although the issue was initially flagged by an internal probe and a query from the EPA.
**Impact on Investors:** For investors, this lawsuit could have significant financial implications for Toyota. Legal battles can result in substantial penalties and damage to the company’s reputation, potentially affecting stock prices.
**Impact on Consumers:** If you are a business that uses forklifts, particularly those manufactured by Toyota, this lawsuit suggests potential performance and compliance issues with your equipment. It may be wise to review your current fleet and consider the implications of these findings on your operations.
**Financial Consequences:** The plaintiffs are seeking compensatory and punitive damages, as well as full refunds, which could amount to a considerable financial burden for Toyota. This could impact the company's financial health and its ability to invest in future innovations.
In summary, this lawsuit against Toyota highlights the importance of regulatory compliance and ethical practices in manufacturing. For investors and consumers alike, staying informed about such developments is crucial for making sound financial and business decisions.
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