Hogan posted a warning about the problem on his dealership website in 2017 under the title of "public safety notification." When Toyota became aware, it sent him a letter saying the posting contained misleading information and would confuse customers.
"When implemented," the letter said, "the software change lessens the likelihood of a failure by improving the power management and internal operating temperatures for specific electronics in the inverter."
Skip Miller, the attorney who represents Hogan, said the assertion that the software fix only "lessens the likelihood" of a failure is a violation of federal law. "The whole point of recall law is to fix the car before it fails," he said.
The fail-safe mode, which Toyota documents also call limp-home mode, allows the cars to go 5 or 10 mph, Miller said. "It is an extreme safety hazard," he said. "It is intended to limit damage to the inverter."
According to Miller, Hogan's problems with Toyota date to about 2015 when the dealer paid to develop a software program that would improve recall notifications to Toyota customers. It was aimed at increasing the often low completion rates after a recall is issued and notifying mechanics when a specific vehicle brought in for other service was under a recall.
Miller said Toyota rejected the idea and began quarreling with the Hogan family. The suit alleges that Toyota refused to supply all the vehicles that Hogan could sell, essentially diverting his business to other dealers. And it says Toyota decided to "punish Hogan" by blocking his plan to turn over management responsibility to his three sons.
In its statement, Toyota said, "Ultimately, we believe Mr. Hogan's lawsuit is motivated primarily by a separate dispute he has with Toyota over management and succession issues involving his dealership, not the efficacy of this recall."
Toyota's handling of the Prius recall comes nearly nine years after the company faced problems with sudden acceleration in its Camry and Lexus models. A California Highway Patrol officer and three family members died in a runaway Lexus.
Federal regulators found that Toyota had failed to promptly notify customers about unintended acceleration problems caused by faulty floor mats and sticky accelerator pedals. The company was fined $1.2 billion, which at the time was a record for an auto defect. Criminal allegations in the matter were dropped last October under a deferred prosecution agreement.
So far, inverter failures have not been linked to any injuries or crashes, though when a car loses power the owner might not be aware that it was caused by an inverter failure, Miller said.