Takata Asks Court to Stall Airbag Victims' Lawsuits Against Automakers

Takata, the airbag supplier whose cost-cutting measures ended up killing people, issued a request on Wednesday to suspend lawsuits against automakers filed by those injured by its faulty inflators.

Without the injunction, Takata claims the rampant litigation would prohibit management from completing the sale of the company’s viable operations to Key Safety Systems for $1.6 billion, threatening the supply of air bag inflators meant to replace already recalled ones (which may include all previously repaired units, pending an EPA investigation).

Obviously, the injured parties want restitution. Plaintiffs’ lawyers call the proposed injunction “an abuse of the bankruptcy laws for the benefit of all of the world’s largest automobile manufacturers.” The fear is that Takata’s request will delay consideration of numerous lawsuits for several months to a year, which is a long time to wait when you’ve been wronged.

Takata and TK Holdings Inc. filed for bankruptcy in June after suffering through the biggest recall in automotive history and tens of billions of dollars in outstanding liabilities. While the bankruptcy automatically delayed hundreds of lawsuits against TK Holdings for wrongful death, injuries, and breach of consumer protection laws, the company still sought a preliminary injunction to stall lawsuits against automakers that used its inflators.

According to Reuters, the committee that represents injured drivers said in court papers that the injunction would possess “human consequences” and prevent people from pursuing important compensation — citing a grisly example of a 23-year-old New Jersey woman whose quadriplegia resulted from brain injuries sustained from a Takata inflator. The woman’s lawyers estimated her lifetime financial loss would be roughly $18 million, which does not include damages for pain and suffering.

The supplier initially set aside $125 million to compensate those injured by its faulty safety systems as part of its guilty plea. But there is no way that sum could possibly be sufficient and it’s unlikely the $850 million reserved to compensate automakers for recalls will be, either.

Earlier this week, Nissan agreed to pay a $98 million settlement to “significantly increase customer outreach and to accelerate recall remedy completion rates for Takata airbag inflator recalls.”

In June, a federal judge granted preliminary approval to similar settlements with BMW AG, Toyota Motor Corp, Subaru Corp, and Mazda Motor Corp — totaling $553 million and affecting 15.8 million vehicles outfitted with Takata inflators.

“Nissan, as well as Toyota, BMW, Mazda and Subaru previously, have done right by their customers in reaching these agreements,” read the plaintiff committee’s announcement. “They stand in contrast to other auto manufacturers that continue to avoid responsibility to the detriment of their customers. We will continue prosecuting our claims against Honda and Ford to make sure all affected consumers receive the recourse they deserve.”

All the settlements reached include an outreach program to contact owners of recalled vehicles, address the low number of completed repairs, as well as compensation for economic losses for plaintiffs. There is also the potential for residual funds to go toward rental vehicles for some owners, as well as a customer support program.

That said, automakers including BMW, Ford, Honda, and Toyota agreed in the court filing that a six-month delay in lawsuits, would “advance the interests of their customers and the safety of the motoring public by increasing the likelihood” the Takata restructuring will succeed and “protect the supply of replacement inflators and diminish the risk of future deaths and injuries.”

Takata’s faulty inflators are linked to at least 18 deaths and over 180 injuries. The supplier claims it expects 125 million vehicles worldwide to be recalled by 2019.

[Image: Takata]