Automakers Toyota, Subaru, Mazda and BMW have agreed to pay a combined $553.6 million to settle allegations in pending multidistrict litigation (MDL) over dangerously defective Takata Corp. air bags. Under the terms of the settlements, BMW of North America LLC will pay $131 million, Subaru of America Inc. will pay $68,262,257 and Mazda North American Operations agreed to pay $75,805,050. Toyota Motor Corp. will be on the hook for $278,500,000. These settlement are meant to accelerate the removal of dangerous air bag inflators from 15.8 million affected vehicles and will provide compensation to class members for economic losses resulting from the recall, such as for rental cars, and a customer support program that includes an extended warranty.
Peter Prieto, a lawyer with Podhurst Orseck PA, who is one of the lead attorneys representing the Plaintiffs, said the settlement will help educate consumers about the urgent need to have their air bags replaced while providing them with compensation for their economic losses. Podhurst Orseck PA:
The low number of recalls to date demonstrates the need for a settlement of this type, and we look forward to accelerating the removal of defective Takata air bags from the roads. We appreciate the efforts of Toyota, BMW, Mazda and Subaru to do right by their customers in reaching these agreements, and we look forward to the court’s approval so implementation can begin soon.
The settlement covers more than 9 million Toyota vehicles, 2.6 million Subaru vehicles, 2.3 million BMW vehicles and 1.7 million Mazda vehicles. The automakers, in a statement, urged customers to log on to the National Highway Traffic Safety Administration’s (NHTSA) recall website to see if their vehicles are affected. The four automakers are the first to settle in multidistrict litigation over the largest auto recall in the nation’s history. As we have reported, Takata’s air bag inflators have been linked to at least 11 deaths in the U.S. Takata has faced massive global recalls of its air bag inflators, which allegedly have a tendency to explode. The cheap but volatile ammonium nitrate that inflates the bags can misfire, especially in humid conditions, blasting chemicals and shrapnel at passengers and drivers.
The Plaintiffs will continue to pursue their claims against Ford, Nissan and Honda. Takata has pled guilty to wire fraud and agreed to pay $1 billion in fines and restitution and acknowledged that it ran a scheme to use false reports and other misrepresentations to convince automakers to buy air bag systems that contained faulty, inferior or otherwise defective inflators. The Plaintiffs are represented by Podhurst Orseck PA, Baron & Budd PC, Colson Hicks Eidson, Power Rogers & Smith PC, Boies Schiller & Flexner LLP and Lieff Cabraser Heimann & Bernstein LLP, and Beasley Allen, among others.
The pressure is now on the remaining three car manufacturers in the MDL litigation to settle the claims against them. Ford, Nissan and Honda should have gotten a very strong message from the settlements by Toyota, Subaru, Mazda and BMW since everything is against them. It will be extremely difficult for the three remaining companies to try cases before a jury.
The case is In re: Takata Airbag Products Liability Litigation (case number 1:15-md-02599) in the U.S. District Court for the Southern District of Florida.