Rhonda and Eddie Smith of Sevierville, Tenn., poured out their anger today at Toyota, emotionally recalling an incident in 2006 in which their Lexus unexpectedly accelerated to more than 100 miles per hour. But the couple didn't limit their rage to the automaker or to government regulators.
The Smiths said they tried to resolve their complaints with Toyota through arbitration, to no avail. In testimony before the U.S. House Committee on Energy in Commerce, they described the arbitration process as useless.
“This was one of the biggest wastes of my time and my wife’s time,” Eddie Smith said. “It was a complete set-up to make us go away.”
Their testimony is likely to be ammunition for the plaintiffs’ bar and for consumer groups, which are pushing Congress to limit when mandatory arbitration can be used to resolve disputes between companies and consumers. The American Association for Justice, which lobbies for the plaintiffs’ bar, has put the issue at the top of its legislative agenda this year.
The Smiths did not say whether arbitration was mandatory under any contracts they signed for their Lexus. But Rhonda Smith said they turned to the process on the recommendation of their car dealer, after waiting several months for Toyota to explain what caused their car to accelerate. The National Center for Dispute Settlement handled the arbitration, she said.
“This turned out to be a farce,” she said. A Toyota field technician called into the arbitration hearing rather than attend in person, she said, and the technician suggested that Rhonda Smith caused the acceleration problem by misapplying the car’s brakes.
The National Center for Dispute Settlement denied the couple’s claim for a refund on the Lexus, Rhonda Smith said. A vice president at the center did not immediately return a message requesting comment.
UPDATE: Click here for a response from the National Center for Dispute Settlement.
NCDS is under the same corporate umbrella as Construction Arbitration Services, Impartial Services Group, Elections Unlimited...maybe more. CAS was in two Public Citizen reports, in 2004 and again in 2009. In it, it was exposed that one of CAS's owners was a twice disbarred attorney, Marshall E. Lippman. There are and were many problems with bias against homeowners who had to use CAS for disputes because of arbitration clauses that mandated their use, in builder and home warranty contracts. See: Home Court Advantage: How the Building Industry Uses Forced Arbitration to Evade Accountability, fairarbitrationnow.org.
Posted by: Cindy | February 23, 2010 at 02:14 PM