Honda Motor Co. Ltd. has agreed to pay $605 million to settle claims pending in multidistrict litigation (MDL) surrounding exploding Takata airbags. Beasley Allen lawyers Dee Miles, Archie Grubb and Clay Barnett were part of the MDL discovery team in this litigation. Dee, who is head of the firm’s Consumer Fraud & Commercial Litigation Section, had this to say about the settlement:
We are happy to see this latest settlement, which means progress for our clients. We will continue fighting for the other victims who have suffered from this winding saga of corporate behavior at its worst.
Honda is the latest automaker to settle in order to exit the MDL. It joins Toyota, Subaru, Mazda and BMW – automakers that settled earlier this year for a combined $553.6 million.
As we have previously reported, Honda was alerted to the safety issues as early as 2004, when an Accord airbag in Alabama exploded and shot shrapnel throughout the vehicle interior. The company settled four lawsuits before issuing a small recall in late 2008. By the following year, four injuries and a death were linked to ruptured airbag inflators in Honda vehicles. The settlement will cover 11.4 million Honda vehicles currently under recall and 5.1 million more vehicles that may be subject to a later recall, Reuters reports.
The U.S. Department of Transportation initiated a recall of Takata airbags in 2015 after determining they were prone to instability. Although other airbag manufacturers refused to do so because of safety concerns, Takata opted to use ammonium nitrate in its airbag inflators. The compound can destabilize over time, particularly if exposed to high temperatures and humidity. This may cause the airbag inflator to explode with excessive force when the airbag is deployed – spewing shrapnel at drivers and passengers.
As we have previously reported, now linked to 17 deaths and more than 180 injuries worldwide, the safety recall is the largest in U.S. history. The recall encompasses about 70 million individual airbag units in 42 million vehicles made by 19 different auto manufacturers.
The settlement covers monetary losses for Plaintiffs in class action litigation resulting from the massive recall. The settlement covers claims “that vehicles were inaccurately represented to be safe, and that buyers had overpaid for cars with defective or substandard air bags” and covers out-of-pocket costs Honda owners may incur while working to get their airbag replaced or repaired. Additionally, settlement proceeds will be used to establish a customer support program for affected vehicle owners, and to provide them an extended warranty.
In February, Takata executives pleaded guilty to criminal charges. The company agreed to a $1 billion settlement including agreeing to pay $850 million in restitution to automakers, $125 million for victims and families and $25 million in a criminal fine. Last month, Delaware bankruptcy judge Brendan L. Shannon, who is overseeing Takata’s bankruptcy proceedings in the U.S., granted the company a 90-day freeze on hundreds of lawsuits and government enforcement actions related to its defective airbags so it can focus on its restructuring under Chapter 11 bankruptcy. However, Judge Shannon exempted the lawsuits consolidated for MDL in the Southern District of Florida from the freeze because the court sees those lawsuits essentially as one.
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. For more information about the Takata airbag recall, visit Beasley Allen’s YouTube page.
Sources: Law360.com and Reuters