Class counsel have asked a Florida federal court to grant final approval for the $741 million in settlements with four automakers in class actions over dangerously defective Takata Corp. air bags. The class counsel highlighted two ways the agreements are below average: the number of objections and the portion going to attorneys’ fees. The settlements were reached with Toyota Motor Corp., BMW of North America LLC, Subaru of America Inc. and Mazda North American Operations. During the final fairness hearing in Miami, lead class counsel Peter Prieto of Podhurst Orseck urged approval and said the $166 million that will go to pay the class attorneys, while a substantial sum, is only 22 percent of the total value, well below the Southern District of Florida’s recent averages, which studies have found range between 30 to 33 percent.
The 30 objections filed from a class of nearly 20 million members is well below the approximately 230 that is typical for these types of multidistrict litigations. The number is far below the more than 400 in Volkswagen’s recent settlement related to its diesel emissions scandal. The substantial work of the 26 Plaintiffs’ firms involved in the case included reviewing more than 10 million documents produced by the Defendants and deposing 70 class members and 45 Defense witnesses.
Under the terms of the settlements, BMW will pay $131 million; Subaru, $68.26 million; Mazda, $75.8 million, and Toyota, $278.5 million, for a total of $553.6 million. The overall value reaches $741 million when extended warranties of 10 years or 150,000 miles on the new inflators is factored in, according to a warranty valuation expert’s review. The four automakers were the first to settle and get out of the multidistrict litigation (MDL) over the largest auto recall in the nation’s history. Takata’s air bag inflators have been linked to at least 11 deaths in the United States. The cheap but volatile ammonium nitrate that inflates the bags can misfire, especially in humid conditions, blasting chemicals and shrapnel at passengers and drivers.
Takata has pled guilty to wire fraud and agreed to pay $1 billion in fines and restitution. The company also acknowledged that it ran a scheme to use false reports and other misrepresentations to convince automakers to buy air bag systems that contained faulty, inferior or otherwise defective inflators. Nissan also reached a settlement agreement in the case. Ford is the lone remaining defendant in the MDL.
The case is In re: Takata Airbag Products Liability Litigation, case number 1:15-md-02599, in the U.S. District Court for the Southern District of Florida.
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