One Billion Dollar Settlement Against Takata for Exploding Airbags and Falsified Testing


July 13, 2017

Our Atlanta Product Liability Attorneys Report on the Billion Dollar Settlement Against Takata for Exploding Airbags and Falsified Testing

Takata, the Japanese company and word's largest manufacturer of airbags, has agreed to pay $1 billion dollars in criminal sanctions for failing to disclose defects that caused air bags to explode.  Takata air bags have been linked to at least fifteen fatalities and hundreds of injury victims.  The company must pay restitution of $850 million to automakers that equipped vehicles with the faulty airbags.  Takata also was ordered to contribute $125 million toward a fund that will be used to compensate victims of the exploding airbags.  The final component of the award includes a $25 million criminal penalty. 

The company and three executives entered a guilty plea to wire fraud charges stemming from acts related to the sale of the faulty airbags.  The Department of Justice (DOJ) based its case on allegations that Takata knew that certain ammonium nitrate-based inflators failed to perform.  However, the company allegedly provided false test reports to auto manufacturers to entice them into purchasing the defective inflators according to the DOJ.  The indictment filed by the DOJ indicated the airbag manufacturer became aware that the inflators were failing or rupturing during testing approximately fifteen years ago.

These penalties follow in the wake of a $70 million settlement with federal auto safety regulators in 2015.  The prior settlement between Takata and the National Highway Traffic Safety Administration (NHTSA) was based on the grounds that the airbag manufacturer was aware of the defect in its inflators but failed to implement timely recalls.  Takata admitted that the company provided the NHTSA with “selective, incomplete or inaccurate data.”  The airbag manufacturer reportedly learned of the continuing scheme to mislead regulators and the public about the safety of the airbags about six years ago but elected not to take action against the responsible executives or to take other actions to prevent the scheme from continuing.  Media reports indicate that the executives actually were promoted after the scheme became known to the company.

The injuries and fatalities associated with the faulty airbags were reportedly caused by inflators that explode with excessive force, propelling shrapnel at vehicle occupants.  Tragically, many of the victims of the defective airbags suffered permanent debilitating injuries or wrongful death in low-speed collisions that would not have been expected to cause serious injury or death.

The DOJ estimates that over sixty million faulty airbag inflators were installed in nearly 42 million U.S. vehicles.  While the initial recalls were limited to geographic regions with high temperatures and humidity, incidents involving injuries and fatalities in other areas of the U.S. revealed that the chemicals used to inflate the airbag could become unsafe despite the vehicle being from a different climate.  According to U.S. Attorney Barbara McQuade, the ammonium nitrate used to inflate the airbags can deteriorate with both heat fluctuations and the passage of time. 

Despite recall efforts, the public still faces a significant safety threat because of the exploding airbags.  Although approximately 70 million airbags manufactured by Takata have been or will be recalled, many of the vehicles on the road are still equipped with the airbags.  The recalls are not expected to be completed until 2018.  The NHTSA has referred to the Takata airbag recall as the “largest and most complex auto safety recall in U.S. history.”

Motorists worried about whether their vehicle is equipped with the shrapnel spewing airbags are advised by the Department of Transportation (DOT) to consult SaferCar.gov.  While companies that manufacture vehicles and their components have a legal duty to produce vehicles that are safe for consumers, defective vehicle claims present factual and legal challenges.  The defendants are well funded and familiar with the prospect of facing litigation.  These cases also involve complex scientific data and expert testimony about the manufacturing processes.  An experienced Atlanta defective vehicle attorney can assist you in navigating these difficult issues in pursuit of the fullest financial recovery.

Put Our Law Firm's Over 33 Years of Experience to Work For You!

If you or a family member has been injured in a collision or has suffered more debilitating injuries because of a defective airbag, contact our attorneys at to learn about you legal rights as well as what steps can be taken to protect those rights. Montlick and Associates has been representing Atlanta injury victims throughout Georgia and in the Southeast for over thirty-three years, including but not limited to Albany, Athens, Atlanta, Augusta, Columbus, Gainesville, Macon, Marietta, Rome, Roswell, Savannah, Smyrna, Valdosta, Warner Robins and ll smaller cities and rural areas in the state. No matter where you are located, our attorneys are just a phone call away, and we will even come to you. 

Call us 24 hours day/7 days a week for your Free Consultation at 1-800-LAW-NEED (1-800-529-6333).  You can also visit us online at www.montlick.com and use our Free Case Evaluation Form or 24-hour Live Online Chat.

Sources:

http://www.reuters.com/article/us-takata-settlement-idUSKBN14X1WK
http://www.reuters.com/article/us-takata-settlement-idUSKBN14W2PZ
http://www.autonews.com/article/20161228/OEM11/161229895/takata-could-pay-up-to-$1-billion-to-settle-u.s.-criminal-probe
https://www.washingtonpost.com/news/innovations/wp/2017/01/13/u-s-indicts-three-takata-executives-in-faulty-airbag-scandal/?utm_term=.fede1c417f63
http://www.npr.org/sections/thetwo-way/2017/01/13/509665912/takata-to-pay-1-billion-over-airbag-fraud-3-executives-criminally-charged

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Category: Personal Injury

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