Takata Expected to Pay $1B in Federal Settlement
Reportedly, Takata is close to reaching a settlement with federal prosecutors over defective airbags that can explode, causing injury and death. The faulty airbags prompted 19 automakers to recall a total of 42 million vehicles. The problem stems from faulty metal inflators, which can come under extreme pressure and explode, sending metal shrapnel flying at the vehicle’s occupants. The company is expected to pay a penalty of up to $1 billion. Takata also faces a class action lawsuit over its exploding airbags.
The product liability lawyers at Parker Waichman LLP are keeping up-to-date with the Takata airbag recall and litigation. The firm, which has decades of experience representing clients in lawsuits over allegedly defective or dangerous products, continues to offer free legal consultations to individuals with questions about filing a Takata exploding airbag lawsuit.
According to the New York Times, two people briefed on the discussions say the settlement may be reached in the next few weeks. It is unclear whether Takata will plead guilty to criminal misconduct. If the company does plead guilty, it would face further penalties. The settlement, if reached, would end the Justice Department’s investigation into the exploding airbags. The company will still be immersed in litigation, however, including a class action lawsuit.
Takata has admitted that it manipulated airbag test results, but claimed that this did not affect its airbag ruptures. The Justice Department has been investigating whether Takata deceived consumers and omitted information about the airbags from consumers.
Wall Street Journal was the first to report that Takata is nearing a settlement with federal prosecutors.
The federal government has fined the automobile industry several times in recent years. In 2014, Toyota agreed to pay $1.2 billion to settle allegations that it failed to disclose the risk of sudden acceleration. General Motors was fined $900 million in 2015 for failing to disclose a deadly ignition switch defect, despite being aware of the problem for at least a decade. In both cases, the Justice Department agreed to defer prosecution and the companies did not plead guilty to criminal activity.
Takata Exploding Airbags Linked to 11 Deaths, 180 Injuries
According to Takata engineers, the company switched to a cheaper propellant in its inflators in the early 2000s. The propellants contain ammonium nitrate, which can degrade and subsequently become unstable overtime. Upon exposure to moisture, the substance can explode. NYT reports that Autoliv, one of Takata’s competitors, tested ammonium nitrate as a potential airbag propellant in the 1990s but determined that it was unsafe to use.
Takata, however, went forward with using ammonium nitrate in its propellants. The company manipulated airbag test results and sent them over to Honda, its biggest client, NYT reports. In 2004, the driver of a Honda Accord in Alabama died due to an airbag rupture. However, Honda and Takata considered the event to be an anomaly and did not involve federal regulators.
According to NYT, however, Takata conducted secret tests on 50 airbags in 2004. During testing, steel inflaters in two airbags cracked, a warning sign of an explosion. The finding was so concerning that Takata engineers began working on a solution, expecting a possible recall. However, the company did not notify federal regulators and instead allegedly ordered its technicians to delete the data. “All the testing was hush-hush,” one former Takata employee said, according to NYT. “Then one day, it was, ‘Pack it all up, shut the whole thing down.’ It was not standard procedure.”
Takata’s actions may lead to additional penalties, considering the degree to which the company failed to disclose important information. NYT obtained internal company emails showing that Takata employees engaged in data manipulation. In one email, dated Jul. 6, 2006, a Takata airbag engineer wrote “Happy Manipulating!!!” with regards to airbag test results.
The company told federal regulators in 2010 that the airbag explosions resulted from manufacturing defects. According to NYT, however, the company simultaneously recruited researchers at Pennsylvania State University to find out whether ammonium nitrate could have factored into the explosions. The researchers concluded their study in 2012, and ultimately determined that ammonium nitrate may not be safe to use. Upon learning these findings, the company ignored the study and did not share the results with regulators for over two years.
The National Highway Traffic Safety Administration (NHTSA) fined Takata $70 million for failing to warn about the defect in a timely manner. The penalty was part of a 2015 consent order. NHTSA cautioned that if Takata did not adhere to the consent order’s terms, it could face an additional $130 million penalty.
Transportation secretary Anthony Foxx has said that Takata falsified data. NHTSA said in its consent order that “in several instances, Takata produced testing reports that contained selective, incomplete, or inaccurate data.”
“Delay, misdirection and a refusal to acknowledge the truth allowed a serious problem to become a massive crisis,” said Mr. Foxx during a news conference. “When we first brought this issue to light, there was a lot of denial on the part of Takata.”
“Takata said it had isolated the problem, it said it had uncovered the mistakes that led to ruptures, and it had pledged its products were safe,” Mr. Foxx stated. “But we know that the ruptures have continued.”
NHTSA head Mark R. Rosekind has also said that Takata misrepresented the safety of its airbags. Commenting on a 2012 meeting between the company and regulators, he said Takata “failed to clarify inaccurate information” provided during a presentation. NHTSA issued orders to the company in 2014; Rosekind says Takata never complied.
Parker Waichman continues to monitor events regarding the Takata exploding airbag litigation. The firm continues to offer free legal consultations to individuals with questions about filing a Takata exploding airbag lawsuit.
Filing a Takata Exploding Airbag Lawsuit
If you or someone you know is interested in filing a Takata exploding airbag lawsuit, contact one of our product liability lawyers today. Parker Waichman offers free, no-obligation case evaluations. For more information, fill out our online form or call 1-800-YOURLAWYER (1-800-968-7529).