Products Liability Law Daily Honda settles states’ airbag defect lawsuits for $85 million
Wednesday, August 26, 2020

Honda settles states’ airbag defect lawsuits for $85 million

By Leah S. Poniatowski, J.D.

Coalition of 48 attorneys general and Honda agree to injunctive relief, fines to resolve state consumer protection law-based claims.

American Honda Motor Co., Inc. and Honda of America Manufacturing, Inc. (collectively, Honda) entered into a multi-state settlement agreement with a coalition of 48 state attorneys general to resolve the allegations that the auto maker violated state consumer protection laws when it failed to notify regulators and consumers of risks posed by air bags supplied by Takata in its vehicles (New York Attorney General Press Release, August 25, 2020).

Beginning in 2008, Honda initiated a recall of its vehicles after reports of air bags had malfunctioned, affecting approximately 12.9 million vehicles, including A cura models. The air bags presented serious risks, the attorneys general argued, allegedly caused by an issue with the propellant in the air bags that could cause the inflator to burst. In the United States, 14 deaths and over 200 injuries had resulted from this type of malfunction. The attorneys general formed the Attorneys General Multi state Working Group, which initiated an investigation into the matter in 2015. The coalition filed lawsuits based on state consumer protection laws, contending that Honda violated these laws when it failed to share the risks posed by the air bags and it promoted their safety—even as complaints emerged and it initiated a recall of the affected vehicles.

Consent judgment. The attorney general coalition, representing 48 jurisdictions, and Honda agreed to strong injunctive relief and the payment of $85 million in fines, according to the final consent order and judgment issued by a New York State court. Among the actions Honda has agreed to take will be to change how it procures air bags and to ensure that air bag designs include "fail-safe" features. Additionally, the auto maker will implement a recurrence prevention procedure in addition to improvements to its risk-management, quality control, whist leblower protections, and related areas of the company. Further, the company will be prohibited from sharing misleading advertisements and point-of-sale representations about vehicle safety. This settlement is separate from a class action settlement between Honda and vehicle owners.

The attorneys general represented the following states, territories, and districts: Alabama, Alaska, Arkansas, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Guam, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Northern Mariana Islands, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.

Settlement fine shares. The $85 million in fines will be divided among the jurisdictions represented in the agreement, with New York receiving $3,385,945, according to the attorney general’s press release. Several other attorneys general issued press releases reporting their jurisdiction’s share of the total, for example: Alaska, $930,742.18; District of Columbia, $1,987,820.17; Illinois, $2,496,588.83; Tennessee, $1,730,909.22; and Virginia, $1,954,154.58.

Attorneys: Christopher L. McCall, Office of the New York State Attorney General, for the People Of The State Of New York. Ashley L. Taylor, Jr. (Troutman Pepper Hamilton Sanders LLP) and Clayton S. Friedman (Crowell & Moring LLP) for American Honda Motor Co., Inc. and Honda of America Mfg., Inc.

Companies: American Honda Motor Co., Inc.; Honda of America Mfg., Inc.

MainStory: TopStory SettlementAgreementsNews MotorVehiclesNews MotorEquipmentNews NewYorkNews

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