Products Liability Law Daily Settlements totaling $741M in Takata airbag MDL receive final approval
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Thursday, November 2, 2017

Settlements totaling $741M in Takata airbag MDL receive final approval

By Susan Engstrom

Class action settlement agreements resolving economic loss claims against automakers Toyota, Subaru, Mazda, and BMW in the Takata airbag multi-district litigation were given final approval by the Florida federal court overseeing the MDL. The settlements, which have a combined value of about $741.3 million, including a $166-million attorney fee award to class counsel, will compensate vehicle owners and lessees for their economic losses and facilitate the removal of dangerous airbag inflators from nearly 16 million vehicles manufactured by the four companies. According to the court, the settlements are fair, reasonable, adequate, and in the best interest of the classes. Thus, the plaintiffs’ economic loss claims against the auto manufacturers were dismissed (Takata Airbag Products Liability Litigation (Toyota Final OrderJudgmentSubaru Final OrderJudgmentMazda Final OrderJudgmentBMW Final OrderJudgment), October 31, 2017, Moreno, F.).

The plaintiffs had filed claims for economic losses related to the automakers’ use of allegedly defective Takata airbag inflators that could, upon deployment, rupture and spray metal shrapnel toward the vehicle’s occupants. In their omnibus motion for final approval of the settlements, the plaintiffs explained that this common defect, which is tied to the inherent instability of the phase-stabilized ammonium-nitrate propellant used in Takata’s airbag inflators, gave rise to the single largest automotive recall in U.S. history. However, approximately 70 percent of the defective airbags—i.e., around 40 million—have yet to be removed from vehicles and replaced with safe airbags.

Settlement classes. Members of the settlement classes include: (1) all persons or entities that owned and/or leased, on the date of the issuance of the Preliminary Approval Order, affected vehicles distributed for sale or lease in the U.S. or any of its territories or possessions; and (2) all persons or entities that formerly owned and/or leased affected vehicles and sold or returned, pursuant to a lease, the affected vehicle after April 11, 2013 and through the date of the issuance of the Preliminary Approval Order.

Settlement provisions. In light of the low numbers of affected vehicles that have received the recall remedy since the National Highway Traffic Safety Administration (NHTSA) first announced recalls of defective Takata airbag inflators, the settlements reached by ToyotaSubaruMazda, and BMW provide for the establishment of outreach programs designed to increase recall remedy completion rates. Under these programs, which will be overseen by a Settlement Special Administrator, class members will receive regular notices via direct mail, phone calls, email, Internet ads, and social media to educate them about the settlements and encourage them to complete the recall remedy and exercise their rights under the settlement agreements.

The settlements also will: establish a Rental Car Loaner Program through which the most at-risk class members can receive a rental/loaner vehicle in the event that a recall remedy part is not available; provide reimbursement for certain reasonable out-of-pocket expenses related to the Takata airbag inflator recalls, such as taxi fare and child care costs; set up a Customer Support Program to cover repairs and adjustments of current and replacement inflators, including the expense of parts and labor, for an extended period of time; and provide for residual distribution of any remaining settlement funds.

Attorney fees. The court approved class counsel’s request for fees equal to 30 percent of the common fund in each of the four settlements, providing for a total of $166 million in attorney fees. In addition to finding this amount to be reasonable, the court noted that the requested fees actually amounted to less than 30 percent of the value of the respective common fund due to the value of the Customer Support Program, and that class counsel will be required to expend considerable time and effort over the four-year lifespan of the settlements by overseeing and adjusting the outreach programs and the out-of-pocket claims process for the benefit of the class members.

Dismissal of claims. The court dismissed all economic loss claims against the four automakers with prejudice on the merits and without costs to any party, except as otherwise provided in its orders or in the settlement agreements.

The case is MDL No. 2599 (Master File No. 15-02599-MD-MORENO; 14-24009-CV-MORENO) (Toyota Final OrderJudgment; Subaru Final OrderJudgment; Mazda Final OrderJudgment; BMW Final OrderJudgment).

Attorneys: David Fernandes (Baron & Budd, PC) for Craig Dunn. Peter Prieto (Podhurst Orseck, PA) for Daniel S. Silva and James Herron. Brian O. Beverly (Young, Moore & Henderson, PA) for Takata Corp. Alex P. Tilling (Leake & Anderson LLP) for TK Holdings, Inc. Derek S. Whitefield (Dykema Gossett LLP) for Toyota Motor Corp. Homer B. Ramsey (Herzfeld & Rubin, PC) for Subaru of America, Inc. Christopher J. Dalton (Buchanan, Ingersoll & Rooney, PC) for BMW of North America, LLC and BMW Manufacturing Co., LLC. Cari K. Dawson (Alston & Bird) for Mazda Motor of America, Inc. and Mazda Motor Corp. Martin Leonard Steinberg (Hogan Lovells US, LLP) for FCA US LLC. Stephen J. Krigbaum (Carlton Fields Jorden Burt, PA) for Inflation Systems Inc.

Companies: Takata Corp.; TK Holdings, Inc.; Toyota Motor Corp.; Subaru of America, Inc.; BMW of North America, LLC; BMW Manufacturing Co., LLC; Mazda Motor of America, Inc.; Mazda Motor Corp.; FCA US LLC; Inflation Systems Inc.

MainStory: TopStory SettlementAgreementsNews DamagesNews MotorVehiclesNews MotorEquipmentNews

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