Editor's note: Suits & Settlements is a weekly column in which Car Pro Show host Jerry Reynolds takes a look at the latest automotive-related legal headlines.
Toyota Faces Class Action Over Hybrid Inverter Recall
Toyota is facing a proposed class-action lawsuit over a loose inverter bolt that already prompted a federal safety recall involving certain 2025 and 2026 Camry Hybrids and 2026 Corolla Cross Hybrids. Michael Jaffe filed the case November 4 in the U.S. District Court for the Northern District of Illinois against Toyota Motor Sales U.S.A. and Toyota Motor Engineering and Manufacturing North America.
According to Law360, the complaint alleges Toyota knowingly sold vehicles with the inverter condition and failed to provide an effective repair within a reasonable period. The lawsuit claims the loose bolt can interrupt the electrical connection inside the hybrid inverter, potentially causing a sudden loss of drive power or a fire. Those allegations have not been proven.
The underlying safety issue is independently documented in National Highway Traffic Safety Administration recall 25V869. Toyota's December 16, 2025 recall report covers 55,405 vehicles and says an improperly tightened inverter bolt can cause incomplete terminal contact. Toyota later developed a remedy calling for dealers to replace the inverter assembly at no charge. The recall establishes the safety campaign, but it does not establish the lawsuit's separate allegations that Toyota violated warranty or consumer-protection laws. No class has been certified, and Toyota has not been found liable.
Why it matters: Camry Hybrid and Corolla Cross Hybrid owners should check their vehicle identification numbers for recall 25V869 and confirm that the inverter replacement has been completed. Dealers should verify recall status before delivering affected used vehicles and retain complete repair documentation.
Honda Accused of Selling Keyless Vehicles Vulnerable to Theft
Honda and its U.S. subsidiary have been hit with a proposed class action alleging that passive keyless-entry systems used in Honda and Acura vehicles make them unusually vulnerable to theft. Plaintiff Trina M. Innarella filed the case October 29 in the U.S. District Court for the Central District of California against Honda Motor Co. and American Honda Motor Co.
The complaint alleges that Honda knew thieves could exploit the systems used to unlock and start vehicles when an authorized key fob is nearby, yet failed to disclose the alleged vulnerability or install available anti-theft measures. The plaintiff also contends Honda owners paid more for vehicles they believed were secure and now face reduced vehicle values, higher insurance costs and an increased risk of theft.
These are allegations, not established facts. The court has not certified a class or ruled that Honda's keyless-entry design is defective, and Honda has not been found liable. The case is Innarella v. American Honda Motor Co., Case No. 2:26-cv-12679. Law360 and Bloomberg Law reported the filing.
Why it matters: Owners of keyless Honda and Acura vehicles may want to use layered theft deterrents, including secure key-fob storage and a visible steering-wheel lock. Dealers should expect questions about theft protection and avoid making security assurances that go beyond the manufacturer's published information.
Toyota Insurance Sues Farmers Over Branded Auto Policies
Toyota Insurance Management Solutions USA has sued Farmers Insurance Exchange and several related companies, alleging Farmers is attempting to move Toyota-branded auto-insurance customers into products carrying a Farmers affiliate's brand. The lawsuit was filed November 2 in the Delaware Court of Chancery.
According to the complaint and reports from Law360 and Bloomberg Law, Toyota Insurance and Farmers entered into a 2021 agreement governing Toyota-branded policies. Toyota Insurance alleges the contract preserves its exclusive rights to sell and service those policies, and to receive related commissions, for two years after Farmers ended the relationship. Toyota Insurance says that protection continues through December 2027.
Toyota Insurance claims Farmers' planned policy changes would improperly strip away the Toyota branding, customer relationship and commissions before the contractual period expires. Farmers and its affiliates have not been found to have breached the agreement, and the Delaware court has not ruled on Toyota Insurance's interpretation. The case is a commercial contract dispute; the available filings do not establish that any customer's coverage is invalid or that claims have been denied.
Why it matters: Toyota Insurance customers should read renewal or replacement notices carefully and confirm the identity of the insurer, agent and claims administrator. For dealers that promoted Toyota-branded coverage, the dispute could affect how the product is presented and serviced if the partnership changes.
Nissan Dealer Settlement Offers Cash or Service Vouchers Over Marketing Calls
A proposed class-action settlement involving Al Piemonte Nissan offers cash or dealership vouchers to certain consumers who allegedly received repeated marketing calls or text messages while their telephone numbers were listed on the National Do Not Call Registry. The Illinois state-court case is Hazem Arman v. Al Piemonte Nissan.
The lawsuit alleges the dealership violated the federal Telephone Consumer Protection Act by making or arranging more than one sales call or text within a 12-month period to qualifying numbers without an established business relationship or prior written consent. Al Piemonte Nissan denies the allegations and maintains that it had consent or an existing relationship with the people it contacted. The court has not determined that the dealership violated the law.
The court granted preliminary approval September 16. According to the court-authorized settlement website, eligible consumers who submit valid claims may choose a $100 non-expiring dealership voucher or a $20 cash payment, subject to possible pro-rata reductions. The settlement provides for as much as $3.7 million in vouchers or $740,000 in cash. Claims, objections and exclusion requests are due December 15, and the final-approval hearing is scheduled for January 6, 2027. No benefits will be distributed unless the settlement receives final approval and any appeals are resolved.
Why it matters: Consumers who received a settlement notice should submit a claim before December 15 if they want compensation. Dealer groups should treat this as another warning to document consent, scrub calling lists against the Do Not Call Registry and closely supervise outside marketing vendors.