Takata Will Pay $1 Billion in Criminal Penalties
Takata will pay $1 billion in criminal penalties related to its exploding airbag scandal, the Department of Justice announced. The company has agreed to plead guilty to charges of wire fraud, in which the government alleged that Takata falsified safety data for its airbags. Additionally, three executives were indicated on charges of wire fraud and conspiracy. Takata has been under intense scrutiny in light of the faulty airbags, which can explode and cause fatal injuries to vehicle occupants.
The product liability lawyers at Parker Waichman LLP are keeping up-to-date with the Takata airbag recall and litigation. The firm, which has decades of experience representing clients in lawsuits over allegedly defective or dangerous products, continues to offer free legal consultations to individuals with questions about filing a Takata exploding airbag lawsuit.
The DOJ announced the settlement in a Jan. 13, 2017 press release, which says that Takata will pay a total of $1 billion in criminal penalties. Takata was found to act fraudulently regarding sales of its defective airbag inflators, the cause of the exploding airbags. Three Takata executives were also charged with falsifying safety data to obscure a deadly airbag defect.
“Automotive suppliers who sell products that are supposed to protect consumers from injury or death must put safety ahead of profits,” said U.S. Attorney Barbara McQuade of the Eastern District of Michigan, according to the release. “If they choose instead to engage in fraud, we will hold accountable the individuals and business entities who are responsible.”
Takata started using ammonium nitrate as a primary propellant in its airbag inflators in the late 1990s. The company admitted, according to the release, that it knew these inflators did not meet performance criteria required by the auto makers. Takata was also aware that some inflators had failed or ruptured during testing. Despite knowing this, the company falsified test data to hide the defects. As such, customers were misled about the performance of inflators. Among other things, Takata did not disclose that some inflators ruptured during testing.
Company employees, including key executives, regularly acknowledged and communicated about fabricating the data through emails and verbal discussions. Even after exploding airbags led to injuries and deaths on the road, Takata still hid the true data involving its airbag inflators.
“For more than a decade, Takata repeatedly and systematically falsified critical test data related to the safety of its products, putting profits and production schedules ahead of safety,” said Andrew Weissmann of the Fraud Section of the Justice Department’s Criminal Division, according to the release. “This announcement is the latest in the automotive industry enforcement actions the Fraud Section has taken to protect U.S. consumers against fraud.”
Takata is pleading guilty to wire fraud. The $1 billion criminal penalty consists of $975 million in restitution and a $25 million fine. Among the funds allocated for restitution, $125 million is being set aside for individuals who were injured due to the Takata exploding airbag issue who have not already reached a settlement, and $850 million is for airbag recall and replacement costs incurred by automakers who unknowingly installed the defective airbag inflators.
“I offer my deepest sympathies to the families and friends of those who died and to those who were injured as a result of the Takata Corporation’s failure to fulfill its obligation to ensure the safety of its airbag systems,” said Inspector General Calvin L. Scovel III of the U.S. Department of Transportation Office of Inspector General, according to the release. “Because safety is and will remain the highest priority for my office, we will continue to work tirelessly with our law enforcement and prosecutorial partners in pursuing those who commit criminal violations of transportation-related laws and regulations. Along with similar settlements with General Motors in September 2015 and Toyota in March 2014, today’s agreement makes clear to all auto manufacturers and parts suppliers their duty in keeping the public safe.”
More Vehicles Recalled for Takata Airbag Defect
Parker Waichman notes that the Takata exploding airbag recall continues. According to the Associated Press, 13 auto makers are recalling another 652,000 vehicles that may be installed with the faulty airbag inflators.
Companies recalling vehicles for the airbag defect include: Audi, Nissan, Jaguar-Land Rover, Subaru, Daimler Vans, Tesla, Mitsubishi, BMW, Ferrari, Mercedes, Mazda, McLaren and Karma.
The Takata exploding airbag recall has been the largest auto recall in United States history. A total of 19 automakers and 69 million inflators are affected.
Globally, the faulty inflators have been attributed to at least 16 deaths and over 180 injuries. The ammonium nitrate can degrade and become unstable, causing an explosion under pressure. This has caused injuries and death when the airbag explodes, sending metal shrapnel flying towards vehicle occupants.
BMW is among the latest to recall vehicles that may contain defective airbag inflators. The company is recalling 230,000 cars and SUVs that may have been replaced with a Takata inflator following a crash or another recall. Initially, the vehicles contained different inflators. The company is recalling certain 3 series vehicles from 2000 to 2002, certain 5 series from 2001 to 2002 and certain X5 SUVs from 2001 to 2003.
BMW says it learned of the issue in late November, after a customer asked which company makes the inflator in their 3 Series sedan. Roughly 14,600 airbag replacement parts were shipped to the US between 2002 and 2015. Since BMW has not been able to identify which replacement parts may be from Takata, the automaker has decided to issue its recall “in an abundance of caution.”
In 2015, the Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) imposed a civil penalty of $200 million against Takata. The agency issued a Consent Order requiring the company to phase out the manufacture and sale of the faulty inflators. The fine was “the largest civil penalty in NHTSA’s history for Takata’s violations of the Motor Vehicle Safety Act,” the agency said.
Filing a Takata Exploding Airbag Lawsuit
If you or someone you know is interested in filing a Takata exploding airbag lawsuit or airbag defect lawsuit, contact one of our product liability lawyers today. Parker Waichman offers free, no-obligation case evaluations. For more information, fill out our online form or call 1-800-YOURLAWYER (1-800-968-7529).