Airbags are designed to decrease the severity of injuries, but sometimes they fail to protect and cause fatal injuries. Such has been the case with airbags designed by Takata Corporation, a Japanese automotive company brought to its knees by scandals involving faulty airbag inflators. The company, founded in 1933 as a textile manufacturer, evolved to become the leading supplier of airbags and other auto parts.
The Takada family would collect at least a billion yen in dividends yearly. Unfortunately, things turned sour when the company’s largest Takata airbag recall in US history hit the company. The value of the Takada family’s stake decreased drastically from 300 billion Yen to 2 billion Yen. Eventually, the company filed for bankruptcy.
Most of the biggest airbag lawsuits in world history involve Takata airbags, as you shall see below.
10. Takata Airbag Products Liability (Volkswagen Settlement) – $42 Million
In April 2022, US District Judge Federico A. Moreno approved Volkswagen and Audi to pay $42 million in settlement of allegations accusing the companies of using Takata’s defective airbag inflators. From the amount, $12.6 million would go towards seeking attorney fees. The payment only benefitted those who owned Volkswagen or Audi cars with defective Takata airbags between February 9, 2016, to November 10, 2021.
It provided cash payments to owners or lessees of the affected vehicles. However, if the drivers did not incur any related expenses, they were entitled to up to $500, while those who incurred more significant out-of-pocket expenses would get higher payouts. Such expenses included lost wages, childcare expenses, towing charges, repair costs, and rental fees, among many more. The deadline to file the claim is estimated to be March 7, 2023.
9. Takata Airbag Products Liability (Mazda Settlement) – $75.8 Million
Mazda was among those affected in a deal covering almost 16 million vehicles and four major vehicle manufacturers and agreed to settle with plaintiffs for $75.8 million. At least 1.7 million Mazda vehicles were affected by faulty Takata airbags; hence the amount would compensate owners or lessees of vehicles fitted with the defective airbag inflators. While that was in 2017, Mazda is still faced with the same issue of faulty Takata airbags.
In October 2018, it expanded its recall to include particular 2010 to 2012 models. At the time, about 115,000 cars were recalled, and Mazda said it would contact owners by mid-November 2018 to advise them to take the vehicles for inspection and replacement. One year later, in November 2019, Mazda had a second recall of about 117,000 cars to replace the deadly Takata airbags with parts that do not have ammonium nitrate.
8. District of Columbia v. Honda – $96.5 Million
The District of Columbia sued Honda for violating the District’s consumer protection rights. The airbag lawsuit alleged that the faulty inflators installed in the Honda vehicles would cause rupture and metal debris to fly at the passengers.
The $96.5 million was after investigations revealed that Honda did not inform regulators and customers of the potential risk the faulty airbag inflators posed. Yet, at the time, hundreds had been injured and at least a dozen people killed.
Letitia James, the New York Attorney General, spoke to the press after the settlement announcement saying that they were holding Honda accountable and using them to send the message to other companies that prioritizing profits over safety was unacceptable.
The investigations began in December 2015, yet the settlement was in August 2020. Although Honda did not admit wrongdoing, it recalled nearly 13 million Acura and Honda vehicles equipped with defective airbag inflators.
Of the $96.5 million, $1 million would go to the National Association of Attorney Generals, while $11.3 million would go to the State of California. The rest would settle the lawsuits filed in each jurisdiction comprising Washington DC, 46 states, and three US territories.
7. Takata Airbag Products Liability (BMW Settlement) – $131 Million
Bayerische Motoren Werke AG (BMW) was one of the four auto manufacturers to enter into a $553 million settlement following a class action lawsuit accusing the plaintiffs of selling, distributing, and manufacturing vehicles fitted with faulty airbag inflators.
Despite 2.3 million cars being equipped with defective inflators, BMW denied the allegations and liability. The $131 million did not cover personal injury claims or damage to property. While the settlement was in 2017, BMW vehicles have been involved in scandalous defective airbag inflator claims since then.
In 2019, Takata recalled 1.4 million BMW 3-Series vehicles after discovering a different airbag inflator problem. Although the defect was not the same as the one leading to the $131 million settlement, it still resulted in metal shrapnel being hurled at passengers leading to death and injuries.
By the time Takata recalled the vehicles, one Australian and a driver from Cyprus had been injured, while another driver was fatally wounded due to the airbag inflator malfunction. When customers thought they were out of danger in 2021, BMW recalled another 4511 3 Series vehicle fitted with the faulty Takata airbag inflator.
6. Takata Airbag Products Liability (Toyota Settlement)- $278.5 million
On June 9, 2017, the court preliminary approved a $278.5 million settlement, and the approval order was docketed on June 12, 2019. Toyota had been accused of manufacturing, distributing, and selling certain vehicles containing defective Takata airbag inflators.
Upon deployment, the airbags would rupture and expel debris resulting in the occupant being injured. However, Toyota denied the allegations, but later the two sides settled as the vehicle manufacturer focused on enhanced customer satisfaction and eliminating the cost of further litigation.
The settlement covered economic loss and not property damage or personal injury. While this settlement should have served as a lesson to Toyota, it still is in the limelight regarding faulty airbags. On January 29, 2021, Jessica Rodriguez sued Toyota after her accident in her Toyota Yaris, and the airbag inflator exploded, expelling shrapnel to her face.
She said that the company’s recalls were ineffective, and Toyota opted to put profits ahead of the safety of its customers. Therefore, she sought consequential, actual, and economic and non-economic damages.
5. Takata Airbag Products Liability (Ford Settlement) – $299 Million
In January 2016, CBS News reported that about 391,000 Ford Ranger pickups had been recalled following faulty airbag inflators. The airbags were highly likely to explode when impacted by too much force and would cause injuries to the driver.
It was based on evidence from the death of Joel Knight, a 52-year-old man whose 2006 Ranger hit a cow and his airbag exploded. For this reason, the government announced that more vehicles equipped with the Takata airbag would be recalled. Besides causing explosions, some airbags also failed lab tests.
In July 2018, Ford agreed to a settlement amounting to $299.1 million to cover more than 6 million vehicles found to have potentially faulty Takata airbags. The payment was to cater to economic loss. Thus, it would cover any monetary damages connected to the fault inflators.
It would also cover out-of-pocket expenses Ford owners incurred to have the vehicles repaired. Ford insisted it was working with customers to ensure their cars were fixed, and under the settlement terms, it would provide owners whose vehicles were recalled with rental cars.
4. Takata Airbag Products Liability (Honda Settlement) – $484 Million
According to Yahoo, Honda agreed to a $484 million settlement regarding the defective Takata airbag recall. The lawsuit alleged that Honda was among certain car companies that sold, distributed, or manufactured vehicles with faulty Takata airbag inflators.
The defective inflators risked injuring the driver or passenger by rupturing and dispelling debris or shrapnel upon deployment. The suit claimed that Honda violated consumer protection laws, among other laws, but Honda denied the claims. The company even denied liability, adding that it did not engage in wrongdoing by selling, distributing, or manufacturing the said vehicles.
After lengthy court proceedings, Honda and the plaintiffs agreed to a settlement to avoid further litigation that would be costly. Honda agreed to pay $605 million to reimburse the customers for any out-of-pocket expenses they had incurred upon the vehicles being recalled.
The amount did not cover any personal injury or death claims. Still, plaintiffs were considerate enough to offer Honda a 20% discount leaving the vehicle manufacturer to pay $484 million.
3. Government of the United States Virgin Islands v. Takata Corporation – $650 Million
On May 25, 2016, the Attorney General of the United States Virgin Islands filed a complaint on behalf of the Government of the United States Virgin Islands against Takata. The plaintiffs sought punitive damages, general damages, civil penalties, declaratory relief, and injunctive relief due to the defendant’s role in equipping over 7,000 vehicles in the Virgin Islands with defective airbag inflators.
Virgin Islands was not the only state suing Takata, and the airbag lawsuit resulted in a class action against Takata as the states affected joined hands. According to New York Times, Takata reached a $650 million deal with 44 states and Washington DC. However, the states said they would not take the settlement as they preferred to leave it for the affected customers.
2. Saclo v. General Motors – $900 Million
According to Reuters, a lawsuit named Continental Automotive Systems US as being responsible for making defective airbags installed in GM vehicles. The suit alleged that Continental made sensors determining if and when the airbags would go off during accidents.
When bumped, the ignition switch would change positions, shutting off the engine and disabling the airbags, brakes, and steering wheel. As a result, many were injured when the bag did not deploy.
The plaintiffs accused GM of knowing about the defect and concealing it, putting profits above the safety of its customers. On the other hand, Continental did not redesign the airbags nor warn the public or NHTSA despite investigations showing that it knew about the defect as early as 2005.
A spokeswoman for Continental explained that it was global practice for airbags not to deploy when the ignition switch was turned off. The United States government took up the case and initiated criminal proceedings against GM for misleading customers and failing to notify NTHSA of the defect.
Eventually, the automaker agreed to forfeit $900 million and accept responsibility for its actions. It also agreed to comply with a few more instructions upon which the US government would dismiss the charges.
1. United States v. Takata et al. – $1 Billion
Takata reached a $1 billion settlement with the US Justice Department in criminal penalties divided as $975 million in restitution and $25 million in fines. The restitution was split such that $125 million went into a fund for consumers physically hurt by the Takata airbags and who had not reached a settlement.
The remaining $850 million was for automakers who incurred recall and repair costs. The supplier of automotive safety-related equipment pled guilty to one count of wire fraud connected with the sales of defective airbag inflators. Takata was well aware that some of its ammonium-nitrate airbag inflators did not perform as per the auto manufacturers’ requirements.
Yet, Takata urged customers to buy them after concealing the true nature of the airbag inflators by submitting fraudulent reports that made the airbags seem better than they were.
The airbags caused severe problems, including death in the field, but the Takata executives continued hiding the accurate reports. The executives discussed the falsification of test reports verbally and through email but never acted to save lives. The company did not also take disciplinary measures against such executives despite senior executives being fully aware of what was going on with the falsified data.
Eventually, they pled guilty to the charge and agreed to implement strict internal controls. The company said it would retain for three years a company monitor and cooperate with the Justice Department in investigating those involved in the coverup.
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