By Susan Engstrom
In the multidistrict litigation involving airbags manufactured by Takata Corp., automaker Nissan has agreed to pay $97.7 million to settle all economic loss actions brought against it by owners of Nissan vehicles equipped with the allegedly defective devices. If approved by the court handling the MDL, the proposed settlement would provide for a rental car/loaner program, an out-of-pocket claims process, and an outreach program for Takata airbag inflator recalls, among other things (In re: Takata Airbag Products Liability Litigation, August 8, 2017).
In their class action complaint, the plaintiffs alleged that several automakers, including Nissan Motor Co., Ltd. and Nissan North America, Inc. (collectively, Nissan), sold vehicles equipped with defective airbags supplied by Takata. The airbags had an unreasonably dangerous propensity to rupture, expelling debris toward the vehicle’s occupants. The plaintiffs alleged that the airbags shared a common defect: the use of ammonium nitrate, a volatile and unstable compound, as the propellant in the defectively designed inflators. This defect led to the recall of over 60 million vehicles. The economic loss claims asserted against Nissan included fraudulent concealment and violation of state unfair trade practices/consumer protection laws.
In their motion for preliminary approval of the settlement, the plaintiffs noted that four automakers—Toyota, BMW, Mazda, and Subaru—have agreed to resolve the economic loss claims against them through separate class action settlements, which have been granted preliminary approval by the court. Nissan has now agreed to resolve the economic loss claims brought against it.
Terms of proposed settlement. Under the proposed settlement, Nissan would pay a total of $97,679,141, less a 10 percent credit for a rental car/loaner program, to non-reversionary common funds over a four-year period to pay for a state-of-the-art "Outreach Program," to fund cash payments to class members, and to cover all settlement-related fees and costs. Under the Outreach Program, the Settlement Special Administrator would take additional actions beyond those already taken to notify vehicle owners about the Takata airbag inflator recalls and to promptly remedy those issues. The program would include: (1) direct contact of class members via U.S. mail, telephone, social media, email, and text; (2) contact of class members by third parties, such as independent repair shops; and (3) multi-media campaigns, including through print, television, radio, and Internet.
Under the rental car/loaner program, Nissan would provide free rental or loaner vehicles to class members exposed to the greatest risk of airbag rupture when replacement parts are not available after a reasonable period of time. Nissan also would provide class members with prospective coverage for repairs and adjustments of current and replacement inflators, including the expense of parts and labor.
Also under the proposed settlement, class members would be able to submit claims for the reimbursement of reasonable expenses they incurred in connection with having the recall remedy performed on their vehicles, ranging from taxi fare and towing expenses to lost wages and child care costs. Class members also would have the option of registering for a payment of up to $250 from distributions made from residual funds.
The case is No. 1:15-md-02599-FAM.
Attorneys: David Fernandes (Baron & Budd, PC) for Craig Dunn. Emily Ullman (Covington & Burling LLP) for Takata Corp., TK Holdings, Inc. and Highland Industries, Inc.
Companies: Takata Corp.; TK Holdings, Inc.; Highland Industries, Inc.
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