January 17, 2017

The U.S. Department of Justice’s decision to pursue criminal charges against Takata executives allegedly connected to a yearslong scheme to cover up the company’s potentially deadly air bag inflators shows an increased comfort in bringing criminal charges over safety violations, attorneys say.

The company agreed last week to plead guilty to wire fraud and pay $1 billion, including $25 million in criminal penalties, over a scheme to falsify data from test reports for the since-recalled air bag inflators the Japanese company provided to automakers. The development comes a year after the National Highway Traffic Safety Administration imposed its largest-ever fine of $200 million on Takata. Historically, there have rarely been criminal charges over safety violations in the transportation field, attorneys noted, but the DOJ ‘s recent actions with Takata signal a willingness to go down that road.

Currently, massive multidistrict litigation involving personal injury victims and people whose cars have lost value is underway in Florida. Takata is one of the defendants, along with a number of automakers.

“I think the auto manufacturers will have a defense — to what extent and how great I think it may depend on each individual auto manufacturer — but the defense will be that Takata never gave them the full story,” said Theodore J. Leopold of Cohen Milstein Sellers & Toll PLLC.

“How valid that story is, that’s to be seen,” he added.

Mr. Leopold represented a Florida woman who became quadriplegic as a result of a Takata air bag and later died from complications of her injuries in early 2016. That suit was resolved this past summer.

The full Law360 article can be read here.