Takata Nears $1 Billion Settlement Over Its Defective Airbags

Japanese airbag maker Takata is reportedly nearing a settlement with the U.S. Department of Justice over its massive defective airbag recall.

The company is expected to pay up to a $1 billion penalty to resolve allegations of criminal wrongdoing in handling its defective airbags, The New York Times reports.

While the actual sum of the monetary settlement has not been confirmed, the settlement is expected to be formalized as early as this month and could amount to hundreds of millions of dollars paid over the course of several years.

At least 184 people have been injured in the United States in incidents involving potentially deadly Takata airbags. It is believed that eight people in the U.S. were killed from the Takata defective airbags.

The airbags allegedly contain parts that can shatter on inflation, sending shards of metal into the passenger compartment. Affected vehicles with the Takata defective airbags were built between 2002-2015, by 19 different manufacturers, according to Consumer Reports. Worldwide, approximately 100 million vehicles have been recalled.

In 2015, a class action lawsuit was filed against the airbag manufacturer along with several car makers, including Honda. The complaint alleges that Takata and the automakers violated consumer protection and racketeering laws by concealing the defective nature of the Takata airbags for more than a decade.

Takata and Honda pushed to dismiss the case on grounds that the plaintiffs failed to “allege concrete facts” to support their claims of racketeering.

However, in a December 2015 ruling, the judge overseeing the case disagreed, siding with the plaintiffs, and moved the case forward. U.S. District Judge Frederico A. Moreno also rejected the automakers and Takata’s arguments that the consumer protection laws of 30 states were too different to fall under multidistrict litigation.

The automakers, Honda and Toyota, then challenged the ruling and attempted to trim certain state-based claims. Specifically, Toyota sought to toss Nevada claims for deceptive practices and breach of the implied warranty of merchantability, while Honda sought to dismiss similar claims under Pennsylvania law, calling them “inefficient and premature.”

But the plaintiffs fought back, asserting that “Class representatives from other states asserting breach of implied warranty of merchantability and deceptive trade practices claims can adequately represent absent Nevada class members, as the class representatives’ claims ‘arise out of the same course of conduct and are based on the same legal theories as those of the absent class members.’”

Takata and the automakers were partly successful in their bid to dismiss the litigation in September 2016 when Judge Moreno trimmed down four California claims against Toyota, including the Song-Beverly Act, Unfair Competition Law, Consumer Legal Remedies Act and False Advertising Law.

Still, state claims for fraudulent concealment under Florida, Massachusetts, Nevada, South Carolina and Alabama law were allowed to proceed, along with allegations of unjust enrichment and state unfair trade practices.

The plaintiffs in the Takata defective air bags class action lawsuit 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, among others.

The Takata Defective Airbags Class Action Lawsuit is In re: Takata Airbag Products Liability Litigation, Case No. 1:15-md-02599, in the U.S. District Court for the Southern District of Florida.

UPDATE August 18, 2017: BMW, Mazda, Nissan, Subaru and Toyota have agreed to settle economic loss class action lawsuits related to the Takata airbag defect.  Click here to file a claim!

UPDATE 2, July 20, 2018: Ford Motor Co has also agreed to settle economic loss class action lawsuits related to the Takata airbag defect.  Click here to file a claim!

UPDATE 3: On Sept. 5, 2018, Ford’s nearly $300 million settlement agreement for its part in a Takata airbag defect class action lawsuit was preliminarily approved by a federal judge.

UPDATE 4: On April 7, 2020, Top Class Actions viewers started receiving checks in the mail from the Takata airbags class action settlement worth as much as $400. Congratulations to everyone who filed a claim and got PAID!