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The Takata Airbag Defect: What Florida’s Consumer Advocates Need to Know. – William C. Ourand, Esq.

The Takata Airbag Defect: What Florida’s Consumer Advocates Need to Know. – William C. Ourand, Esq.

Florida is the “epicenter” of the Takata airbag debacle which has resulted in the largest automotive recall in U.S. history. Unfortunately, all signs indicate that the severe injuries and deaths will continue into the foreseeable future. The roadways remain flooded with millions of vehicles which may still be equipped with the potentially lethal airbags. Moreover, consumers who take their vehicles in for repairs have been placed on waiting lists due to a lack of replacement parts. Even worse, some of the replacement airbags may be subject to the same danger because they also contain ammonium nitrate, the volatile chemical which may be the root of the problem.

This article will provide an overview of what is currently known about the Takata airbag defect, will discuss how to spot a Takata case, and will conclude by providing an update on the Takata litigation as well as the auto safety legislation proposed in the wake of the recalls.

What is the Takata Airbag Defect?

The Takata airbag inflator defect refers to a condition which may cause certain Takata airbags to deploy with too much force. When this occurs, the metal inflator containing the airbag propellant may rupture and eject metal shrapnel towards the vehicle’s occupants. At the time of this writing, the Takata airbag defect has been linked to eight deaths and many more severe injuries.

The defect has also been the subject of a series of rolling recalls that continues to this very day. The first recall associated with the defect was issued with respect to a very limited set of Isuzu vehicles back in 2001. Subsequently, in November 2008, Honda issued a recall which initially included only 4,000 vehicles, but was subsequently expanded to include millions of vehicles over the years that followed. Since then, nine other auto manufacturers have gone on to issue recalls due to the defect, including BMW, Chrysler, Ford, GM, Mazda, Mitsubishi, Nissan, Subaru, and Toyota.

Despite the rolling recalls, the Takata airbag defect was largely kept out of the public’s attention until the summer of 2014. Before then, most Takata airbag cases settled quickly, with binding confidentiality agreements to keep the victims quiet. However, a wave of regional recalls drew the attention of the media in June 2014. Around this same time, Corey Burdick and his family filed their lawsuit in Lake County, Florida. The Burdick lawsuit was one of the first injury cases to be filed that did not result in an immediate confidential settlement.

A few months after the Burdick case was filed, Senator Bill Nelson personally met with the Burdick family and held a press conference with them in Orlando. The next month, Senator Nelson chaired a congressional hearing in which he and other Senators questioned Takata, Honda, and Chrysler about the defect.

NHTSA then began to ramp up its enforcement efforts in late 2014 and continuing through 2015. First, NHTSA levied a fine on Honda “for failing to report more than 1,700 death and injury claims” to the government, including the 2009 death of Ashley Parham, which was allegedly caused by a Takata airbag rupture. Second, NHTSA determined that Takata failed to fully cooperate with its investigation, and announced that it was going to begin fining the company $14,000 per day on February 20, 2015. The daily fines only stopped after Takata entered into a Consent Order with NHTSA on May 18, 2015. In the Consent Order, Takata publicly admitted that it shipped more than thirty-three million inflators that may have the defect.

Takata and Honda’s Constantly Shifting Explanations

Takata and Honda have provided a dizzying array of ever-shifting explanations involving a variety of manufacturing and record keeping issues. Specifically, Takata and Honda have blamed the defect on:

• The mishandling of airbag propellant during airbag inflator module assembly;

• Problems with the manner in which propellant was pressed into the wafers which were later inserted into the inflator models;

• A manufacturing process which did not automatically verify that the propellant was being produced within specification;

• Failure to account for replacement service parts that were covered in prior recalls through Honda’s controlled parts ordering system;

• Propellant being produced out of specification;

• Propellant wafers being produced with inadequate compaction force at Takata’s Moses Lake, Washington facility; and

• Propellant wafers being exposed to uncontrolled moisture conditions at Takata’s Monclova, Mexico facility.

In addition, Takata and Honda have also attributed the defect to certain atmospheric conditions, explaining that “high levels of absolute humidity” may act “in conjunction with potential processing issues during certain manufacturing time periods that may influence aging stability.” This explanation accompanied the series of “regional recalls” that were initially isolated to Florida and other southeastern states.

Whistleblowers Describe a Clearer Version of Events

Several whistleblowers have come forward with a clearer explanation of both the cause of the defect and Takata’s knowledge of the problem. Specifically, information relayed to the media by whistleblowers indicates that the “root cause” may revolve around Takata’s decision to begin using ammonium nitrate, a volatile chemical that is “highly sensitive to moisture,” as part of its airbag propellant formula. Before then, the company boasted that it found a “new technological edge” in the use of tetrazole as an airbag propellant.

Former Takata engineer Mark Lillie told the New York Times that Takata researchers were pressured by executives to develop a propellant using ammonium nitrate after “tetrazole, which is produced in limited quantities and can be expensive, started to squeeze margins at Takata.” Mr. Lillie further stated that this change was made over the protest of himself and other members of Takata’s engineering team at its Moses Lake, Washington facility. According to Mr. Lillie, the engineers advised Takata about warnings in explosive manuals stating that ammonium nitrate “tended to disintegrate on storage under widely varying temperature conditions” and that this could produce “irregular ballistic” consequences.

Mr. Lillie is not the only whistleblower to come forward. The New York Times has also reported that several former Takata employees claimed that Takata engaged in tests of 50 airbags the company retrieved from scrapyards following a 2004 rupture incident, and that two of the airbags cracked during these tests. The former employees reportedly stated that these results were “so startling” that Takata engineers started designing remedies that could be performed during a recall, but that Takata executives “discounted the results and ordered the lab technicians to delete the testing data from their computers and dispose of the airbag inflators in the trash . . . .”

Spotting a Takata Case

Takata cases come in two general varieties, which have been commonly referred to as “Type 1” and “Type 2” cases. Type 1 cases involve shrapnel being ejected from the airbags and into the faces and bodies of the vehicle’s occupants. The reported injuries in Type 1 cases have included disfigurement, blindness, and even death. In fact, police investigators have reportedly confused Type 1 Takata airbag injuries for homicide stabbing wounds.

Type 2 cases involve airbags which deploy in an overly aggressive manner. The injury mechanism in Type 2 cases is blunt force trauma. The reported injuries in Type 2 cases have included paraplegia and death.

Any case involving both one of the auto manufacturers known to use Takata airbags and either a Type 1 or Type 2 injury should be carefully vetted. When vetting such a case, it is important to remember that the recall lists available online are often incomplete, and are subject to constant change as the rolling recalls have continued through this day. As such, if the client has suffered a Type 1 or Type 2 injury, it may be worthwhile to proceed with further investigation even if the vehicle has not yet been included on one of the constantly changing recall lists.

Additionally, a Takata injury case may still be worth pursuing even if the statute of limitations or statute of repose has already run. This is because the news reports described above provide a good faith basis for alleging and arguing that the manufacturers have actively concealed a defect which they knew posed a great danger to the general public. These allegations should be sufficient to establish fraudulent concealment exceptions to statutory time bars.

The Takata Litigation

Takata cases are currently being litigated at both the state and federal level. The attorneys in most of the active state court injury actions have formed a coalition for the purposes of coordinating discovery efforts and for opposing motions to stay their cases. A subsequent article dedicated solely to the Takata State Court Plaintiffs Coalition will be published in the upcoming months.

The federal cases have been consolidated into a multi-district litigation (“MDL”), which is presided over by Judge Moreno of the United States District Court for the Southern District of Florida. The MDL is mostly comprised of economic-loss class actions in which the putative class plaintiffs allege that their vehicles have suffered a diminution in value. The MDL also includes the injury cases that are pending in federal court.

The federal MDL is far more complex than the state court injury cases. While most of the state court injury cases involve only Honda and Takata, the federal MDL includes nine different auto manufacturers. Moreover, while liability in the state court injury cases is straightforward, the MDL class actions are driven by complicated legal theories, ranging from consumer fraud to civil RICO.

No Victim Compensation Fund

Senator Blumenthal asked Takata to create a victim’s compensation fund similar to the fund created by GM to provide financial remuneration to the ignition defect victims. Takata balked at this request, stating that the company does “not believe establishing a general compensation fund is warranted at this time . . . .” Senator Blumenthal told the media that he was “astonished and disappointed by Takata’s response.” He further explained, “Takata seems unwilling to acknowledge its responsibility to help the victims and loved ones of victims that have suffered as a result of its lapses and gaps in performance.”

Former FJA President Rich Newsome recently told the New York Times that he would rather work outside of a compensation fund to force transparency with respect to Takata’s handling of the defect and the allocation of damages to the victims. He explained: “If you have a compensation fund it’s not going to give you that opportunity to really understand what happened, and to really understand the scope of potential safety problems for the public. You need litigation for that. You need to be able to put people under oath.”

Legislative Reforms

Federal lawmakers have already proposed multiple pieces of legislation seeking to reform the recall process in response to the Takata airbag debacle. The most expansive reform is the “Motor Vehicle Safety Act of 2015,” which has been introduced by Senators Nelson, Blumenthal, and Markey. Among other things, the Motor Vehicle Safety Act of 2015 would require:

• All new vehicles to have a warning system to notify the driver about safety recalls;

• Authorized dealers to check for and repair defects pursuant to open safety recalls when vehicles are taken in for maintenance;

• Used car dealers to repair safety defects prior to selling the vehicles; and

• An elimination of the 10 year limit on free auto defect repairs.

Corey Burdick and other Takata airbag victims have formed the “Families for Safer Recalls,” a consumer advocacy group designed to promote meaningful change to the recall system. The Families for Safer Recalls is currently advocating in favor of legislative reforms like those contained in the Motor Vehicle Safety Act of 2015.

Conclusion

The Takata airbag debacle is a painful reminder of the kinds of unnecessary injuries and deaths which may be caused when vehicles with known dangerous defects are allowed to remain on public roadways. Unfortunately, all signs indicate that the injuries will continue, and that Florida will remain the epicenter of the Takata debacle. As such, Florida’s consumer advocates should view the defect as an opportunity to force much needed industry reforms by litigating meritorious cases and pushing for meaningful changes to the recall system.


Also published in the Florida Justice Association Journal, July/August 2015, #585


[1] U.S. Senate Committee on Commerce, Science, & Transportation, Press Release (April 27, 2015), Nelson Floor Remarks on Latest Takata Incidents, available at http://www.commerce.senate.gov/public/index.cfm?p=PressReleases&ContentRecord_id=e3fa5a56-a7bb-4e6c-bd43-98cb2609ba91.

[1] Hiroko Tabuchi and Danielle Ivory, Takata Is Said to Have Stopped Safety Audits as Cost-Saving Moving, New York Times, available at http://www.nytimes.com/2015/06/23/business/takata-is-said-to-have-stopped-safety-audits-as-cost-saving-move.html?_r=0 (June 22, 2015).

[1] Jie Ma, Yuki Hagiwara, and Craig Trudell, Honda Opts for Insider as CEO Amid Car-Safety Crisis, Bloomberg Business, available at http://www.bloomberg.com/news/articles/2015-06-14/honda-opts-for-insider-as-ceo-amid-car-safety-crisis (June 15, 2015).

[1] Jonathan Soble, Honda Recalls 4.5 Million More Vehicles Over Takata Airbags, New York Times, available at http://www.nytimes.com/2015/07/10/business/honda-recalls-millions-more-vehicles.html (July 9, 2015).

[1] Bill Vlasic, Lawmakers Spread Anger in Recalls Over Airbags, New York Times, available at http://www.nytimes.com/2015/06/24/business/senate-commerce-hearing-takata-airbag-nhtsa-general-motors.html (June 23, 2015).

[1] Consumer Reports, Everything You Need to Know About the Takata Airbag Recall, available at http://www.consumerreports.org/cro/news/2014/10/everything-you-need-to-know-about-the-takata-air-bag-recall/index.htm (last ed. July 1, 2015).

[1] Maria  Armental, Eight Deaths Now Linked to Takata Air Bags, The Wall Street Journal, available at http://www.wsj.com/articles/eight-deaths-now-linked-to-takata-air-bags-1434757925 (June 19, 2015); Jake Miller, “They Did Nothing”: Airbag Defect Victim Lashes Out at Takata, Honda, CBSNews.com (Nov. 20, 2014), http://www.cbsnews.com/news/they-did-nothing-airbag-defect-victim-lashes-out-at-takata-honda/;

[1] Pete Bigelow, The Long History Behind Takata’s Massive Airbag Recalls, AutoBlog, available at http://www.autoblog.com/2014/06/27/takata-airbag-recall-history-feature/ (June 27, 2014).

[1] Pete Bigelow, Senator Says Takata Airbags are ‘Ticking Time Bomb,’ AutoBlog ,available at http://www.autoblog.com/2014/11/20/takata-airbags-ticking-time-bomb/ (Nov. 20, 2014).

[1] Consumer Reports, Everything You Need to Know About the Takata Airbag Recall, available at http://www.consumerreports.org/cro/news/2014/10/everything-you-need-to-know-about-the-takata-air-bag-recall/index.htm (last ed. July 1, 2015).

[1] Hiroko Tabuchi, Air Bag Flaw, Long Known to Honda and Takata, Led to  Recallshttp://www.nytimes.com/2014/09/12/business/air-bag-flaw-long-known-led-to-recalls.html, , NYTimes.com (Sep. 11, 2014).

[1] Hiroko Tabuchi, Air Bag Flaw, Long Known to Honda and Takata, Led to Recalls, New York Times, available at http://www.nytimes.com/2014/09/12/business/air-bag-flaw-long-known-led-to-recalls.html?_r=0 (Sep. 11, 2014).

[1] Henry Pierson Curtis, Nelson Demands More Action on Faulty Air Bags, Orlando Sentinel, available at http://www.orlandosentinel.com/news/breaking-news/os-exploding-airbag-bill-nelson-20141028-story.html (Oct. 28, 2014).

[1] Eric Beech and Ben Klayman, Takata Executive Warns About Ability to Fix Deadly Air Bag Flaw, Reuters, available at http://www.reuters.com/article/2014/11/21/us-autos-takata-idUSKCN0J40CD20141121 (Nov. 21, 2014); Aaron M. Kessler and Hiroko Tabuchi, At Senate Airbag hearing, Evasion and Uncertainty, New York Times, available at http://www.nytimes.com/2014/11/21/business/takata-airbags-senate-hearing.html (Nov. 20, 2014).

[1] NPR, Honda Find $70 Million for Underreporting Safety Issues, available at http://www.npr.org/2015/01/08/375923180/honda-fined-70-million-for-underreporting-safety-issues (Jan. 8, 2015); Letter from Senators Edward J. Markey and Richard Blumenthal to The Honorable David Friedman (Oct. 15, 2014), available at http://www.markey.senate.gov/imo/media/doc/2014-10-15_Markey_Blumenthal_NHTSA_Letter.pdf.

[1] NHTSA, U.S. Transportation Secretary Foxx Calls on Congress to Authorize New Enforcement Tools for NHTSA and Levies Fine on Takata, available at http://www.nhtsa.gov/About+NHTSA/Press+Releases/2015/DOT-wants-new-enforcement-tools-for-nhtsa-and-fines-takata (Feb. 20, 2015).

[1] Jonathan Soble, Takata’s Airbag Recall a Result of Converging Forces, New York Times, available at http://www.nytimes.com/2015/05/21/business/international/takata-airbag-recall-came-after-pressure-from-converging-forces.html (May 20, 2015).

[1] A copy of the Takata Consent Order is available on the NHTSA website at: http://www.nhtsa.gov/About+NHTSA/Press+Releases/DOT-action-on-takata-air-bag-defects.

[1] NHTSA Defect Investigation Results, Action Number RQ09004 (closed May 6, 2009), available at http://www-odi.nhtsa.dot.gov/cars/problems/defect/results.cfm?action_number=RQ09004&SearchType=QuickSearch&summary=true.

[1] Letter from William R. Willen, Managing Counsel, Product Regulatory Office, American Honda Motor Co., Inc., to George Person, Chief, Recall Management Division, Office of Defects Investigation, U.S. Department of Transportation (Sep. 16, 2009), available at http://www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/ACM12339484/RCMR-09V259-4253.pdf.

[1] Letter from Jay Joseph, Senior Manager, Product Regulatory Office, American Honda Motor Co., Inc. to Daniel C. Smith, Associate Administrator for Enforcement, National Highway Traffic Safety Administration (Feb. 9, 2010), available at http://www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/ACM13292161/RCDNN-10V041-0123.pdf.

[1] Letter from Jay Joseph, Senior Manager, Product Regulatory Office, American Honda Motor Co., Inc. to Claude Harris, Acting Associate Administrator for Enforcement, National Highway Traffic Safety Administration (April 27, 2011), available at http://www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/ACM16947967/RCDNN-11V260-6929.pdf.

[1] Letter from Jay Joseph, Senior Manager, Product Regulatory Office, American Honda Motor Co., Inc., to Nancy Lewis, Acting Associate Administrator for Enforcement, National Highway Traffic Safety Administration (April 10, 2013), available at http://www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/UCM436448/RCDNN-13V132-7704.pdf.

[1] Letter from Kazuo Higuchi, Senior Vice President, TK  Holdings, Inc. to Nancy Lewis, Associate Administrator of Enforcement, National Highway Traffic Safety Administration (April 11, 2013), http://www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/UCM436445/RCDNN-13E017-5589.pdf.

[1] Id.

[1] Letter from Mike Rains, Government Affairs Specialist, TK Holdings, Inc. to Frank Borris, Director, Office of Defects Investigation, National Highway Traffic Safety Administration (June 11, 2014), http://www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/UCM457401/RCORRD-14V350-5612.pdf

[1] NHTSA, Consumer Advisory: Vehicle Owners with Defective Airbags Urged to Take Immediate Action (Oct. 22, 2014), http://www.nhtsa.gov/About+NHTSA/Press+Releases/Vehicle-owners-with-defective-airbags-urged-to-take-immediate-action

[1] Yoko Kubota and Ben Klayman, Car Industry Struggles to Solve Air Bag Explosions Despite Mass Recall, Reuters.com (June 22, 2014), http://www.reuters.com/article/2014/06/22/us-autosrecall-airbags-insight-idUSKBN0EX0K820140622.

[1] Hiroko Tabuchi, Takata’s Switch to Cheaper Airbag Propellant Is at Center of Crisis, NYTimes.com (Nov. 19, 2014), http://www.nytimes.com/2014/11/20/business/takatas-switch-to-cheaper-airbag-propellant-is-at-center-of-crisis.html.

[1] Id.

[1] Id.

[1] Id.

[1] Id.

[1] Id.

[1] Hiroko Tabuchi and Christopher Jensen, It Looked Like a Stabbing, but Takata Airbag Was the Killer, New York Times, available at http://www.nytimes.com/2014/10/21/business/it-looked-like-a-stabbing-but-takata-air-bag-was-the-killer.html (Oct. 20, 2014).

[1] David UnderCoffler, Honda and Takata Sued by Woman Claiming Airbag Paralyzed Her, LA Times, available at http://www.latimes.com/business/autos/la-fi-hy-honda-takata-sued-paralyzed-20150122-story.html (Jan. 22, 2015); Stacy Jacobson, Family of SC Woman Files Lawsuit for Wrongful Death With Faulty Airbags, ABC News 4, available at http://www.abcnews4.com/story/27481840/family-of-sc-woman-files-lawsuit-for-wrongful-death-with-faulty-airbags (Nov. 25, 2014).

[1] Danielle Ivory and Hiroko Tabuchi, Takata Says No to Fund for Victims of Defective Airbag, New York Times, available at http://www.nytimes.com/2015/07/10/business/takata-says-no-to-fund-for-victims.html?_r=0N (July 9, 2015).

[1] Craig Trudell and Masatsugu Horie, Call for Air-Bag Victim Fund, Bloomberg Business, available at http://www.bloomberg.com/news/articles/2015-07-10/takata-rejects-u-s-senator-s-call-for-air-bag-victim-fund (July 9, 2015).

[1] Ivory, Takata Says No To Fund, supra note 37.

[1] Id.

[1] Id.

[1] Id.

[1] Senate Lawmakers Propose Sweeping Auto Safety Reforms, available at http://www.markey.senate.gov/news/press-releases/senate-lawmakers-propose-sweeping-auto-safety-reforms (July 9, 2015).

[1] Id.


 

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