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Miami hearing tackles logistics of Takata product defect suits

On Feb. 20, a federal judge here in Miami held the first hearing involving potential class-action suits over defective air bags made by Takata Corp. The Japanese company's air bags have been the subject of government scrutiny for a flaw that reportedly causes their inflators to deploy so forcefully that they rupture and shrapnel flies at the occupants.

So far, 64 injuries worldwide have been blamed on the air bags in vehicles manufactured by ten auto makers. At least six fatalities have been reported. The plaintiffs seeking damages for injuries are outnumbered, however, by those asking for compensation for their vehicles' loss in value.

These potential suits aren't the company's only problem. On the same day as the Miami hearing, U.S. Transportation Secretary Anthony Foxx announced that the federal government will begin fining Takata $14,000 each day for its lack of cooperation with the National Highway Transportation Safety Administration investigation up to a total of $70 million. Secretary Foxx noted an instance where Takata gave over two million pages of documents to the agency without an index or explanation of the information contained in them.

While Takata has refused NHTSA's demand to recall its product, auto makers have recalled about 22 million cars worldwide due to the problem. Investigators with NHTSA are still trying to determine the reason for the defect.

Meanwhile, over 100 class-action attorneys who attended the Miami hearing to determine the rules for the litigation against Takata as well as automakers. This would be a multidistrict litigation case. It's been proposed that the plaintiffs in the MDL would be represented by five co-lead counsel who would reflect the diversity of the plaintiffs who live in various parts of the world.

An attorney for Honda asked if all state and federal cases could be consolidated to avoid duplication in discovery. According to one attorney at the hearing, there are currently 17 personal injury cases against Takata in state court. The federal judge said he would take the cases if other judges asked him to, but said he wouldn't be comfortable requesting them to do so.

When a large number of people have suffered injury or other damages from a defective product, it can simplify things if they can participate in class actions suits. Such suits can also bring more media attention than individual ones and perhaps help incentivize defendants to agree to a substantial settlement.

Source: The Miami Herald, "US to fine air bag maker Takata $14,000 per day" Joan Lowy and Tom Krisher, AP, Feb. 20, 2015

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