Nissan Motor Co. LTD is, without a doubt, one of the biggest motor vehicle companies in the world. Nissan is a Japanese car manufacturer that sells Nissan, Datsun, and INFINITI car brands. The company is headquartered in Nishi-Ku, Yokohama, Japan. However, it has manufacturing locations worldwide, like China, India, Malaysia, The United States, Mexico, Argentina, Brazil, Egypt, Kenya, and South Africa, to mention a few.
In every industry, vehicle manufacturers have to be held accountable for their products, mainly because cars can easily result in fatalities in case of accidents. Like every other multibillion-dollar company, Nissan has faced its fair share of lawsuits. They have lost some, won others, and even filed some lawsuits. Here is a list of 10 of the most significant Nissan lawsuits in the company’s history.
10. Securities and Exchange Commission(SEC) Charged Nissan with Fraud – $15 Million
The Securities and Exchange Commission had sued Nissan and its former Chairman Carlos Ghosn on fraud charges. In September 2019, Nissan agreed to pay a $15 Million settlement to resolve allegations by U.S regulators that the company and Carlos Ghosn hid more than $140 Million of Ghosn’s retirement benefits from investors. Carlos Ghosn agreed to pay $1 Million and was prohibited from serving in any public company for ten years. As specified by the U.S Securities and Exchange Commission, Nissan agreed to pay $15 Million and refrain from committing fraudulent violations.
9. Hays v. Nissan North America Inc. (The Nissan Floorboard Class Action Suit) – $18.3 Million
In March 2022, Nissan agreed to an estimated $18.3 million settlement to end a defective floorboard class action suit against them. A class action suit against Nissan was filed in April 2015, alleging that they had fitted certain Nissan Altima vehicles with floorboards prone to rust, claiming sometimes the rusting would be so severe that the road underneath the car was visible. The suit claimed that 2002 to 2006 Nissan Altimas and 2004 to 2008 Nissan Maximas had defective floorboards that would deteriorate at an abnormal rate.
Replacing them was expensive, so many Nissan Altima owners could not afford to fix the problem themselves. Nissan had refused to acknowledge the defect and cover the total cost of repairs. Nissan agreed to pay an $18.3 Million settlement for the defective floorboard claims. The company also agreed to inspect the front floor plans for the Nissan Altimas and Maximas mentioned in the suit and repair any defective cars for free. Drivers who paid for the repairs out of pocket were to be reimbursed.
8. Cruz v. Nissan North America (Defective Brakes) – $25 Million
In July 2017, a jury in Los Angeles, California, awarded $25 Million to Solomon Mathenge, Hilario Cruz, and Araceli Mendez in a lawsuit against Nissan that blamed the car’s faulty brakes for a fatal accident. In 2012, Solomon Mathenge was driving in his 2004 Infiniti QX56 when he hit a minivan at a Hollywood Intersection. The minivan had three occupants, Araceli Mendez and her two children, who died in the accident. At first, Mathenge was blamed for the accident and even charged with manslaughter. However, after some scrutiny, the prosecutors noticed similarities between Mathenges brake failure claims to a 2014 class action suit against Nissan.
In the 2014 lawsuit, owners of some 2000s models of the Nissan Armada, Infiniti QX56, and Nissan Titan vehicles claimed to have gotten problems of sudden braking failure when driving. The plaintiffs then joined together and sued Nissan for knowing about the fatal flaws in their braking systems and failing to take appropriate steps like repairing or recalling the vehicles, which would prevent fatal accidents. According to Expert Institute, after the 2017 verdict, Nissan filed an appeal. However, in May 2019, the California Supreme Court denied Nissan’s petition and upheld the verdict to pay $25 Million to the Cruz and Mendez families and Solomon Mathenge.
7. Aguirre v. Nissan North America (Defective brakes accident) – $36 Million
In 2022, the California Court of Appeals held up a decision made by a lower court for Nissan to pay $36 Million in damages to Jose Aguirre, who had an accident in 2012 while driving his Nissan Xterra to work. The accident happened when Jose drove to work as usual in his 200 Nissan Xterra. Jose claimed that his Xterra suddenly accelerated as he pulled into the parking lot. He could not control his car, which led to Mr. Aguirre’s collision with a loading ramp, consequently sending the car flying and crashing into a parked trailer.
The accident led to a disastrous trauma in his spine and left him tetraplegic. Despite appealing the decision by the lower court to award Mr. Aguirre $36 Million in damages, Nissan was ordered by the Court of Appeal of the State of California to pay Jose Aguirre. The lawsuit demonstrated a design defect between the accelerator pedal and the Parking brake bracket in the 2000 Nissan Xterra. The suit showed that the defect made Mr. Aguirre’s accelerator pedal get locked on top of his parking brake bracket leading to the traumatic events of that fateful day.
6. Jackson County. Emps.’ Ret Sys. V. Ghosn (The end of a Securities Lawsuit by Nissan Investors) – $36 Million
Nissan Motor Co. Ltd agreed to pay investors $36 Million to resolve a securities dispute in April 2022. The case against Nissan and Ghosn was filed in May 2016 in the United States District Court for the Middle District of Tennesee by the Jackson County Employees Retirement System. According to Casetext, the plaintiffs alleged that Carlos Ghosn, who was the Nissan CEO and Chairman, was involved in an illegal scheme to increase his pay and approved billions of Yen to compensate himself. Nissan and Ghosn made misleading and false statements regarding Nissan’s annual Financial Reports, which led to an Understatement of the company’s Compensation expenses.
The lawsuit also claimed that Nissan made false statements on its corporate governance, compliance with applicable laws and regulations, and ethical conduct in the company’s mandatory disclosure documents. The plaintiffs claimed that Nissan published financial reports and other mandatory disclosure documents containing the alleged misstatements on the Nissan investor relations Website. The $36 Million settlement covered all investors who bought Nissans American Depository Receipts from 11 May 2014 to 16 November 2016 and all American investors who bought Nissans common stock in the same period. It also covered legal fees for the plaintiff’s lawyers.
5. Nissan Motor Co. et al. v. Carlos Ghosn et al. (Nissan Sued its Former Chairman Carlos Ghosn) – $91 Million
This time around, it was Nissan doing the suing. In February 2020, Nissan filed a lawsuit in a Japanese Court against its former chairman Carlos Ghosn, seeking $90 Million in damages. Nissan claimed that the $90 Million, or 10 billion Yen, would be sufficient to cover most of the monetary damages inflicted on the company by Carlos throughout his tenure as Nissans Chairman. In November 2018, Carlos Ghosn was arrested on allegations of financial fraud by investors. Allegedly he had underreported his income and used Nissan to enrich himself by sending payments of up to $5 million to a car dealership in the Middle East and transferring personal financial losses to Nissan’s books.
After spending four months in detention, Ghosn got out on bail, and not long after that, he fled from Japan and went to Lebanon. As specified by NBC News, Nissan also claimed that Ghosn had intentions of paying himself $300 Million. The case is still open because Mr. Ghosn fled Japan to Beirut and is essentially out of reach of Japanese prosecutors.
4. Faulty Takata Airbags – $97.7 Million
In 2017, the Takata Corporation was sued. This company makes airbags, and the class action lawsuit claimed that it made faulty airbags that degraded over time and, therefore, could explode with excessive force and release metal shrapnel inside cars fitted with the brand’s airbags. Because of this, the class action suit added five car manufacturing companies that used Takata airbags in their vehicles, including Nissan, BMW, Honda, Subaru, and Toyota. The suit claimed that the five car manufacturers distributed, sold, promoted, and marketed vehicles fitted with defective airbags made by the Takata Corporation and TK Holdings.
The lawsuit stated that the companies, including Nissan, failed to take necessary and adequate steps to ensure the airbags were safe and warn customers of any defective ones. Even though Nissan denied that it was in violation of any law and denied liability concerning the manufacturing, distribution, and sale of vehicles mentioned in the class action, the company agreed to a settlement. According to Auto Airbags Settlement, Nissan agreed to pay a $97.7 Million economic loss settlement to all current and former owners and lessees of vehicles fitted with Takata airbags or anyone who bought the said vehicles between 11 April 2013 and 19 September 2017.
3. Bereda et al. v. Nissan North America, Inc. (Defective Forward Emergency Braking System) – $231 Million
In 2022, Nissan was sued by three Nissan Rogue owners for the company’s failure to repair alleged defects in its Forward Emergency Braking SYSTEM (FEB) or even disclose the problem to potential customers. The plaintiffs allege that Nissan concealed this dangerous defect in its emergency braking system, which threatened the lives of drivers, passengers, and pedestrians. The FEB system uses radar technology and is supposed to monitor the vehicle’s proximity to the car in front. The system should give the driver visual and audible warnings to drop his speed in case of possible frontal collision detection or even apply emergency brakes if the driver cannot respond. The plaintiffs claim that despite knowing about the defects in its FEB system, Nissan did not repair them and continued to sell cars with defective FEB systems and conceal the faults from customers.
The Class action suit filed in the United States District Court in Tennessee claims that the Nissan Forward Emergency Braking system defect causes the vehicles mentioned in the class to stop without warning. Due to these defects, other vehicle owners have reported substantial, sudden decelerations and stops. The FEB system also often deactivates itself, detracting itself from the road, consequently making its safety feature useless. The plaintiffs seek $231 million in damages, monetary relief, injunctive relief, restitution, and attorney fees.
2. Superior Automotive Group LLC. v. Nissan Motor Acceptance Corporation (Fraud) – $256 Million
In May 2017, a jury awarded Superior Automotive Group $256 Million, eight years after its collapse. The former Nissan dealership owned by Michael Khan sued Nissan Motor Acceptance Corporation, the Nissan Motor Company’s financial firm, for defrauding him by canceling the dealership financing in the middle of the 2008 and 2010 economic crises. Before the 2008 recession, Michael Khan was the biggest borrower from the Nissan financing division, as he was operating four Nissan dealerships in Los Angeles and San Francisco. When the recession hit, there was a global economic crisis, and car sales went down. Michael Khan was short on cash and late paying about $1.6 million in Nissan loans. The Japanese automaker sued him, forcing him to pay $40 million to Nissan.
According to Business Wire, Michael then filed a countersuit against Nissan claiming that when NMAC stopped Superior Automotives financing, they caused the demise of all his dealerships which resulted in the loss of over 800 jobs. After hearing and being presented with evidence that NMAC had ulterior motives, the Jury of the case that the Orange County Superior Court heard was awarded $256 Million. He received $121.9 Million in compensatory damages and an additional $134.5 Million in punitive damages.
1. Stringer v. Nissan North America, Inc. (Defective CTV Transmission) – $277.7 Million
In February 2021, the Stringer et al. v. Nissan North America case was filed in the United States District Court in Tennessee. The Plaintiffs, Teresa Stringer, Karen Brooks, and William Papania, claimed that some Nissan Rogues, Nissan Pathfinders, and Infiniti QX60s had severe CTV transmission defects. The CTVs used in these vehicles caused poor transmission, stalling, lurching, jerking, shuddering, shaking, and even premature transmission failure.
The class action lawsuit claimed that since 2013, Nissan knew the issues. These vehicles had design malfunctions that caused their continuously variable transmission to fail. Many class action vehicle owners had reported substantial car delays in different instances. Like when they tried to accelerate from a stop, there were issues. When they tried to merge into traffic on a freeway, there were issues. When they tried to pass another vehicle, there were issues. All of these require the ability to accelerate fast. The suit claimed that the CTV defect occurred without warning and posed a serious health hazard to drivers, passengers, and pedestrians.
Following a report by Top Class Actions in March 2022, the court approved a $277.7 million settlement for owners of 2014-2018 Nissan Rogues, 2015-2018 Nissan Pathfinder, and 2015-2018 Infiniti QX60 vehicles. The settlement covered warrant extensions for 24 months and cash reimbursements up to $5000 for owners who paid for repairs of their transmissions from their pockets. Although Nissan did not admit wrongdoing, they agreed to pay the amount to resolve the claims.