Publication Date: December 10, 2014
Publication: Los Angeles Daily Journal
Authors: Hrag Kouyoumjian and Brian Kabateck
The automotive world is under siege as unrelenting media coverage exposes more details about a massive, worldwide, recall involving defective airbags. The recall is unique because it involves products made exclusively to promote and ensure safety. Unfortunately for the Japanese airbag manufacturing company Takata Corporation, its safety products are allege to do just the opposite. Takata failed to protect its consumers by designing, producing, and supplying automobile manufacturers across the globe with defective airbags.
Takata’s airbags were installed in millions of cars around the world because the Japanese company maintains about a 20 percent share of the global market. To date, over 11 million cars have been recalled in the Unites States alone and 17 million worldwide. Tuesday, Honda and Mazda reported that they will expand their regional recalls in the U.S. as well as worldwide recalls – likely pushing the total number of recalled cars close to 20 million.
Along with Honda and Mazda, the most recent National Highway Traffic Safety Administration (NHTSA) recall identifies BMW, Chrysler, Ford, General Motors, Mitsubishi, Nissan, Subaru and Toyota as automakers with Takata’s potentially defective airbags included in their various make and model vehicles. NHTSA derives its broad authority from the National Traffic and Motor Vehicle Safety Act of 1966. The act ensures that NHTSA has control over issues concerning vehicle safety standards, compliance, recalls, and safety research and development.
The defective airbags pose a significant risk to both the driver and the passenger. The airbag inflators may produce excessive pressure, causing them to rupture and discharge small metal fragments into the car- even without a collision or impact. Sometimes, the consequences proved fatal. In 2009, Oklahoma teen Ashley Parham died when the airbag in her 2001 Honda Accord ruptured and discharged lethal fragments of metal into her neck. In 2010, Kristy Williams from Georgia was stopped at a red light when the airbag in her 2001 Honda Civic spontaneously deployed and metal shards punctured her neck and carotid artery, resulting in nearly fatal and permanent injuries. In both instances, Honda and Takata settled with the victims and their families for an undisclosed amount, admitting no fault.
Where accountability is demanded and warranted, auto manufacturers and suppliers have avoided the full repercussion of their wrongful conduct by paying for the silence of their victims. A Bloomberg News study of a dozen cases involving defective Takata airbags revealed that none involved in the study went to trial. Auto manufacturers and suppliers know exactly what is at stake by going to trial: an open forum for all their shortcoming to be aired.
When General Motors attempted to fight a wrongful death lawsuit involving their ignition switch flaw, the statements made during depositions led to over 2.59 million cars being recalled. Therefore, the benefits of litigating a case can go beyond the walls of a courtroom and result in protecting the general public from previously unknown dangers.
The airbag recalls have also affected the used-car industry. Some used-car dealers, like CarMax, are not mandated by federal law to disclose or repair any of their used-cars that are under recall. In recent months, however, NHTSA has lobbied Congress to enact legislation that would prevent used-car dealers from selling recalled cars until they have been repaired.
Similarly, various consumer groups have called upon the Federal Trade Commission to utilize its broad reach to remedy the problem. The primary issue with holding a used-car dealer accountable for selling recalled vehicles is notice. If a used car dealer is not a franchisee of a manufacturer and their used-car lots have unregistered vehicles, the do not receive recall notices issued by the manufacturer. NHTSA only requires manufacturers to provide notices to registered vehicle owners, their dealers and distributors.
The exact cause of the faulty airbags has yet to be pinpointed. According to NHTSA Deputy Administrator David Friedman, the prevailing theory is that the defect “appears to be a problem related to extended exposure to consistently high humidity and temperatures.” In one recall announced in October, NHTSA focused on specific regional areas with high humidity and temperature levels. Regional recalls issued by NHTSA are allowed. The U.S. Court of Appeals for the D.C. Circuit has held that regional recalls do not violate and are not precluded by the National Traffic and Motor Vehicle Safety Act. Center for Auto Safety Inc. v. Nat’l Highway Traffic Safety Admin., 342 F. Supp. 2d 1,24 (D.D.C. 2004)
The toughest part of the crisis faced by the auto industry is determining the true extent of the defect. General Motors knew about the faulty switch problem in their vehicles in 2001, but they did not connect it to airbag failures until recently when they recalled millions of General Motors vehicles in February and March of this year. Because of the delay in diagnosis, the fault was linked to 29 deaths, and NHTSA levied the maximum fine of $35 million against General Motors.
The same issue that plagued General Motors is also troubling Takata. The airbag manufacturer took until April 2013 to submit a report to NHTSA about defective Takata airbags, even though Honda had issued airbag-related recalls as early as 2008. Takata maintained in the report they were “first notified of an incident related to this issue” in October 2011, based on an incident that occurred in Japan.
President Barack Obama and other politicians and lawmakers have taken notice. Takata says that its U.S. unit has been subpoenaed by a federal grand jury in New York to produce documents related to the airbag defects. The New York Times reported that Takata ordered it’s employees to destroy test results that showed a defect in their airbags, prompting lawmakers to call for a criminal probe.
Even though these measures may hold Takata accountable for prior wrongful actions, the true test for society would be to prevent these types of widespread calamities from ever occurring.