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Arbitrator rules that former Toyota attorney Dimitrios Biller may use internal company documents to support his claim that the a

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An arbitrator has ruled that a former Toyota Motor Corp. attorney can use internal company documents to press hisclaim that he was hired to "plan and carry out discovery fraud" on behalf of the company.

The ruling, which comes over objections from the automaker that the documents were privileged, did not determine whether Toyota committed such fraud. Instead, the decision found that former Toyota attorney Dimitrios Biller could use internal e-mails, test reports, memos and other documents as evidence in the case.

The ruling is the second legal setback for Toyota in the last two weeks.

The Supreme Court of Texas ruled Aug. 27 that the automaker must face charges that it acted in contempt of court in a 2007 rollover suit by hiding evidence from the plaintiff. Toyota has issued more than 12 million recall notices over the last year, many of them related to sudden acceleration, setting off a wave of litigation.

Biller's suit, filed in July 2009 and now in arbitration, accuses Toyota of a conspiracy to hide and destroy evidence in product liability suits, including during the time he managed rollover lawsuits for the company.

Retired federal judge Gary L. Taylor, who is arbitrating the case, ruled that the documents could be used because they fall under what is known as the "crime-fraud exception" to attorney-client privilege. He stopped short, however, of allowing the documents to be made public and noted that he did "not rule that a crime or fraud has taken place."

In a statement, Toyota said that the ruling was limited to "issues of evidence admissibility" and that there was "no finding that any misconduct has occurred or that any discovery fraud took place."

The automaker denies any wrongdoing and said that Biller "continues to make inaccurate and misleading allegations about Toyota's conduct, which we strongly dispute and will continue to fight vigorously."  

September 10, 2010 |By Ken Bensinger, Los Angeles Times