December 4, 2014 Trial News | The American Association For Justice

December 4, 2014 Trial News

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Air bag crisis erupts, leading to more recalls, lawsuits

Alyssa E. Lambert

photo of car with airbags deployed

Car manufacturers began installing driver’s-side air bags to protect people from head-on collisions in the 1970s. In 1998, federal legislators made driver’s- and passenger-side air bags mandatory. Now, 10 different manufacturers have recalled millions of air bags because they may explode—even in low-impact crashes—ejecting shrapnel-like material and turning a crucial safety device into a deadly weapon.

Takata Corp., one of the world’s largest air bag manufacturers, is at the center of the firestorm. Several months ago, evidence surfaced that the company and carmakers have known about the defect for years. What has followed is a series of recalls, federal agency investigations, a congressional hearing, and personal injury, wrongful death, and consumer class actions.

The first reported incident happened in 2004, when a driver was injured in a 2002 Honda Accord in Alabama. Excessive generant in the bag’s inflator module was blamed. But the first recall was not until 2008.

In 2009, Honda recalled 510,000 vehicles for the same problem, which caught the National Highway Traffic Safety Administration (NHTSA)’s attention. NHTSA concluded there was insufficient information to suggest the companies had failed to take timely action. Over the next few years, Honda issued more recalls, but it did not report its death and injury statistics to federal regulators until 2011. It has now issued 10 recalls for more than 6 million cars.

Nine other automakers have issued recalls. More than 11 million air bags have been recalled in the United States since 2008—nearly 8 million since 2013 alone—and about 16 million globally; those numbers are expected to grow. Takata and automakers have offered various explanations for why the air bags are defective: excessive pressure; the explosive propellant used to rapidly inflate the air bag being handled incorrectly during production; inadequate venting that prevents the bag from deflating; humidity causing the inflator to rupture; and ammonium nitrate in the propellant being too volatile.

Takata initially recommended “regional recalls” in high-humidity areas, including Florida, Hawaii, Puerto Rico, and the Virgin Islands, arguing humidity is the root cause of the problem. Honda also recalled air bags in Alabama, Georgia, Mississippi, South Carolina, and Texas. Experts and attorneys said limiting the recall is problematic.

“They don’t have a root cause they can agree on, so how can you segregate different populations of vehicles?,” said Houston attorney Robert Ammons. “These air bags are a ticking time bomb, and there is no way to protect the public unless you get them out of the cars.”

At least five people have been killed, and more than 160 injuries have been reported.

In June, NHTSA opened a preliminary investigation of air bags made between 2000 and 2007. In October, internal Takata documents surfaced that suggested the problems continued until at least 2011, leading to more recalls. In an unusual step, the agency launched a public awareness campaign urging consumers to obtain immediate repairs, which caused NHTSA’s website to temporarily crash as panicked consumers checked the list of recalled car models. It ordered Takata to turn over documents and answer 36 under-oath questions related to the air bags; NHTSA is currently reviewing the manufacturer’s responses. The U.S. Attorney’s Office in the Southern District of New York has issued a grand jury subpoena to Takata as well.

On Nov. 18, NHTSA called for a nationwide recall of driver’s-side bags only, after reports indicated at least one incident was not in a high-humidity state. Takata has refused to comply, and NHTSA is also investigating expanding the recall to passenger-side bags.

Larry Coben of Scottsdale, Ariz., called the regional recalls “nonsensical.” “Just like we saw with the [GM] ignition switch cases, it starts out: It was only certain models, but then it could include these, too,” he said.

At a Nov. 20 hearing before the Senate Committee on Commerce, Science, and Transportation, Hiroshi Shimizu, Takata’s vice president for global quality assurance, apologized for the injuries and deaths, but some of his answers were evasive; he didn’t readily admit the air bags were defective. At a Dec. 3 hearing before the House Committee on Energy and Commerce, Shimizu acknowledged Takata did not know the root cause of the defect yet and defended the company’s decision to limit the recalls regionally.

The Honda executive, Rick Schostek, admitted the company may not have complied with the 2000 Transportation Recall Enhancement Accountability and Documentation (TREAD) Act, which requires companies to report injuries, lawsuits, and complaints to federal regulators. Less than a week later, Honda confirmed that it failed to report more than 1,700 claims of injury or death involving its cars over an 11-year period. It could face up to $35 million in fines. At the House committee hearing, Schostek announced Honda will institute a nationwide recall.

At both hearings, the pace of replacement was a hot topic: Takata can manufacture only 300,000 air bags per month and will increase that rate to 450,000 in January, far short of the millions of recalls. According to reports, only 6 percent of all affected vehicles have been repaired. Chrysler, for example, is waiting to notify 371,000 customers about the defect until replacement parts become available on Dec. 19, which drew harsh criticism. Nissan and Toyota said their dealers would temporarily disable air bags in some cases, advising customers not to use the passenger side or not to drive the vehicle if it was the driver’s side.

“There will be people who are injured because the manufacturers, in some instances, are having the air bags disengaged until they get replacement parts,” said Ammons. He added that increasing production doesn’t solve the problem. “You are talking about Takata plants that already had quality control issues, which contributed to this in the first place. So you increase their production by a factor of 150 percent or more? That doesn’t make sense.”

Coben, who represents some of the plaintiffs, noted another problem. “The air bags simply can’t be taken off the shelf and put into these older vehicles. Companies attune the air bag system so that it functions with each specific car,” he said. “To make reasonable replacement parts that will fit and function in those older model vehicles—well, it [Takata] is not capable of doing that right now.”

At least a dozen personal injury and wrongful death lawsuits have been filed in state and federal courts. In 2013, Stephanie Erdman was driving her 2002 Honda Civic when she was involved in a low-impact collision. The air bag deployed, sending shards of metal into her face and right eye, leading to serious lacerations. She sued Honda and Takata. (Erdman v. Am. Honda Motor Co., Inc., No. 2014CI08596 (Tex., Bexar Co. Jud. Dist. filed May 29, 2014).)

In September, Hien Tran was driving her 2001 Honda Accord when she was in a collision. The air bag exploded and inflicted stab-like wounds on her neck, and she died from her injuries. Her recall notice arrived a week later. Her family is also suing Takata and Honda. (Dang v. Honda Motor Co., No. 14-11970 (Fla., Orange Co. Ct. filed Nov. 17, 2014).)

More than 20 consumer class actions have been filed against Takata and automakers, alleging they committed fraud by concealing information about the defects. The plaintiffs seek economic damages, including reimbursement for the decline in the cars’ value, out-of-pocket costs for alternative means of transportation, and injunctive relief—requiring Takata to reveal its design parameters for the older cars so that other air bag manufacturers can help make replacement parts. The plaintiffs filed a motion with the Judicial Panel on Multidistrict Litigation to consolidate and centralize the federal lawsuits. The hearing is set for Jan. 29. (In re Takata Air Bag Litig., MDL No. 2599 (J.P.M.L. filed Nov. 3, 2014).)

“This is one of those cases that cries out for expedited coordination, and the defect is such that they [consumers] could have life-threatening, dangerous equipment in their cars,” said Los Angeles lawyer Roland Tellis, who represents some of the class action plaintiffs. “In some cases, people were told it would take six months to get the air bag replaced, and they shouldn’t worry about it. That kind of logic doesn’t present a problem—until you get into an accident.”