A $5 million lawsuit alleges Toyota ignored transmission problems for a decade

In the US, if a consumer doesn’t like a product, they have the right to seek legal recourse, and many do. Honda has been taken to court over steering issues, Ford is being sued over the F-150’s missing Lightning feature, and GM must resort to legal counsel over allegedly defective V8 engines. Now, Toyota is heading to court for a class action lawsuit stemming from an allegedly defective eight-speed transmission, according to Car complaints. The transmissions are manufactured and supplied by Aisin, a member of the Toyota Group and 25% owned by Toyota, according to the lawsuit. That’s not quite right, as such Reuters Last year, Toyota reported offloading nearly $1 billion in shares, bringing its stake down from 24.8% to 20%. Regardless, the lawsuit blames Toyota. So what’s the problem, and which cars are affected?

Several Toyota models named in class action

The suit, filed by plaintiff Neil Pallaya in the U.S. District Court for the Central District of California, alleges that many Toyota and Lexus models equipped with eight-speed autos “slip, hesitate, lose power, make loud noises, shift erratically and fail.” That’s a list of several concerns, and the lawsuit names the following models:

The aforementioned plaintiff purchased a new 2020 Toyota Highlander in December of that year, equipped with a 2GR-FKS 3.5-liter V6 engine and UA80E transmission, the latter of which is also found in all of the aforementioned cars. The car came with a five-year/60,000-mile limited warranty, which would have been all well and good, but with about 67,200 miles on the clock in September 2025, “the eight-speed transmission started making a constant high-pitched noise when pressing the accelerator.” The lawsuit alleges that a dealer inspection revealed that the transmission failed and required replacement at an estimated cost of $7,451.33. After the warranty expired, the customer was on the hook for the bill.

The plaintiff files for $5 million, alleging Toyota knew about the issues for years

The lawsuit, which is seeking “more than $5 million,” reportedly cost Palaya $405 to file. His transmission still hasn’t been repaired, and he says the Highlander SUV “has less-than-representative quality and value and fails to meet normal consumer expectations in terms of safe and reliable operation.” Furthermore, he says that Toyota and Aisin knew about the problems with this transmission all the way back in 2015 (where excessive heat allegedly builds up inside the torque converter, burning the transmission fluid and causing premature deterioration, damaging the clutch).

Related: Toyota sued for $5.7 billion over Mirai hydrogen cars

Pallaya’s class action claims the two companies should have ordered either the torque converter or a redesign of the transmission after Toyota’s Warranty Analytics Group flagged the transmission as a “high priority powertrain concern” by February 2017. “Hesitation,” “abnormal transmission noise,” and “improper torque converter operation.” The lawsuit also calls attention to the transmission control module software and claims that the transmission should last at least 200,000 miles. Several relevant TSBs are listed below:

• T-TT-0580-19 (November 4, 2019) and T-TT-0580-19_Rev (January 27, 2020)

This story was originally published by Autoblog on December 1, 2025, where it first appeared in the News section. Add Autoblog as a preferred resource by clicking here.