$702.7 Million Class Settlement Resolves Defective Takata Airbag Claims Against Honda and Nissan

Takata Corporation supplied airbag inflators to nearly every major automaker sold in the United States. The inflators used ammonium nitrate as a propellant, a compound that degrades over time, especially in humid environments. When an inflator failed, the metal housing could rupture violently, sending shrapnel into the vehicle cabin at the moment of a crash. The first confirmed U.S. fatality tied to a Takata inflator occurred in May 2009; by the time federal regulators began coordinating a government-wide response, the recall had grown to cover an estimated 37 million vehicles, making it the largest automotive safety recall in American history.

In 2015, plaintiffs from across the country filed economic-loss lawsuits, arguing that even owners whose airbags had not yet fired suffered real financial harm: vehicles with known-defective safety equipment lost resale value, and owners were forced to absorb out-of-pocket costs when taking their cars in for repairs. The Judicial Panel on Multidistrict Litigation consolidated these cases as MDL No. 2599 in the Southern District of Florida before Judge Federico A. Moreno.

In March 2015, Judge Moreno appointed four plaintiffs' attorneys to lead the litigation. Todd Smith, then of Power Rogers and Smith, was named co-lead counsel for the economic loss track alongside David Boies of Boies Schiller Flexner. Two additional attorneys led the personal injury track. The appointment put Smith at the center of negotiations with manufacturers whose vehicles collectively represented tens of millions of affected consumers.

Honda, which had more recalled vehicles than any other single automaker, agreed to a $605 million settlement covering U.S. owners of Honda and Acura vehicles equipped with Takata inflators. Nissan separately agreed to pay $97.7 million to resolve claims by its vehicle owners. Together the two settlements totaled $702.7 million. The agreements received preliminary court approval in September 2017. Judge Moreno granted final approval on March 7, 2018.

Class members could claim reimbursement for childcare costs and lost wages incurred during dealership repair visits, refunds for rental vehicles and storage fees paid while awaiting parts, and free extended warranties on the replacement inflators. The settlement also imposed obligations on Honda and Nissan to cooperate with ongoing repair efforts and provide class-member outreach.

Smith described the result as unusual in its scope, noting that the manufacturers 'fought terribly hard' before agreeing to the terms. The $702.7 million recovery from Honda and Nissan came on top of a separate $553.6 million economic-loss settlement announced in 2017 with BMW, Subaru, Mazda, and Toyota, bringing the MDL's total recoveries past $1.25 billion before the Ford litigation concluded.