Kobe Steel Ltd. and Toyota Motor Corp. are facing a lawsuit from their U.S. consumers for allegedly engaging in fraud by concealing the use of substandard metal components in vehicles and violating consumer protection laws, Reuters reported March 7.
Earlier in the day, Kobe Steel CEO and Chairman Hiroya Kawasaki stepped down to take responsibility of a data fabrication scandal at the company, resulting in the supply of substandard materials to about 500 companies. The company also admitted that data falsification has been happening for nearly five decades.
The lawsuit was filed by two California residents who seek to represent a nationwide class of consumers that purchased Toyota vehicles, alleging that at least six Toyota car models were manufactured with substandard metals.
The complaint also alleged that the companies violated federal and state consumer protection laws by claiming that their products are were in compliance with U.S. quality standards.
The plaintiffs are demanding compensatory and punitive damages of an unspecified amount. Toyota declined to comment on the legal action, while Kobe Steel could not be reached for a comment, the news wire added.
