Taking on Takata

Lately, the National Highway Traffic Safety Administration has come in like a wrecking ball, knocking aside manufacturers’ excuses for delaying recalls and other sundry sins with multi-million dollar fines – and now aggressive legal action.

Wednesday, the agency filed – apparently – its first-ever Preservation Order “requiring Takata to preserve all air bag inflators removed through the recall process as evidence for both NHTSA’s investigation and private litigation cases. The order also ensures NHTSA’s access to all data from the testing of those removed inflators,” according to an agency news release.

The move represents an about-face for NHTSA. Last month, it filed statements of opposition to two South Carolina plaintiffs’ emergency motions to preserve evidence in civil liability cases, Angelina Sujata v. Takata and Robert E. Lyon v. Takata. The Sujata case alleges that an exploding Takata airbag inflator sprayed metal shards in the 18-year-old driver. The Lyon case alleges that a Takata inflator caused the airbag to deploy too aggressively. Both plaintiffs are represented by Kevin R. Dean, of Motley Rice, in Mt. Pleasant, South Carolina.

On February 15, 2008, Mary Lyon Wolfe, 57, was at the wheel of her 2002 Honda Accord, when she veered off the right side of the roadway and it a culvert, a mailbox and a tree before coming to rest in the yard of a home on Griffith Drive in Orangeburg. The suit alleges that the vehicle’s frontal airbags delayed deployment and then burst forward with sufficient force to cause serious head, neck and chest injuries. Wolfe was airlifted to Palmetto Richland Memorial Hospital, where she died of her injuries 17 days later.

Sujata was seriously injured on March 2, 2012, when her 2002 Honda Civic rear-ended another driver who came to an abrupt stop on the highway. The driver’s air bag deployed and the inflator exploded, spraying shrapnel into her chest and face.

“I’m very pleased by NHTSA’s preservation order,” Dean said. “It has accomplished the underlying basic request that we were making which was primarily to preserve 10 percent of the returned inflators in each state for testing and analysis by our experts.”

Preservation orders are garden variety motions in products liability cases, but the issue took on an urgency in early January. Dean discovered that LKQ, which bills itself as North America's largest online provider of recycled original equipment auto parts for cars and light-duty trucks, could not sell him any inflators, because Takata had an agreement to purchase LKQ’s entire inventory. The supplier is gathering some 12,000 inflators a day from recalled vehicles nationwide, and subjecting most of them to destructive testing.  Dean feared that Takata could destroy all of the Florida inventory during testing, leaving none or few for civil litigants to test independently.

Alarmed, Dean, filed an emergency motion for a preservation order on January 9. Honda, Takata and NHTSA immediately objected. The defendants argued that there was no real emergency or threat that evidence would be destroyed. Further, they argued, it would interfere with the multi-district litigation, which is currently in its initial stages.

NHTSA argued that Dean’s effort to preserve some inflators for testing and analysis would interfere with its ongoing investigation into the root cause or causes of Takata airbag inflators malfunctions. The problem appears to be multi-faceted, caused by some combination of manufacturing errors, including improper airbag seam welds on the inflator assembly; the use of ammonium nitrate, a volatile chemical compound which can degrade over time; and potentially defective design of the assembly that does not fail in a controlled manner when it’s over-pressurized. 

In its January 20 statement in the Lyon case, NHTSA said that a preservation order “would put an abrupt halt to Takata’s ongoing testing efforts essential to NHTSA’s safety investigation. Moreover, this order would require the delivery and preservation of hundreds of thousands of recalled Takata inflators at a single location, and thereby would prohibit any transfer of inflators to other entities for further testing, whether carried out by vehicle manufacturers or NHTSA itself. Without readily available access to inflators, including the ability to oversee destructive testing, NHTSA is unable to conduct an effective investigation….This testing will, NHTSA believes, enable the agency to identify the scope of affected vehicles and the root cause of Takata inflator ruptures and to ensure that the recall remedy is robust and effective. This testing is thus a critical element of the agency’s overall mission to protect public safety.”

As Dean pointed out in his reply, NHTSA itself had expressed its doubts about Takata’s honesty and organizational skills. In his November 20 testimony before the Senate Commerce Science and Technology Committee Hearings, Deputy Administrator David J. Friedman conceded:

“[I]t’s been made clear to us they do not have good quality control and do not have good record keeping because further down the road, they had to update indicating they had not provided us with that information. That is one of the key reasons we are demanding under oath they provide us answers about all of these recalls. All of the tests they’ve done on air bags."

And:

"Senator, I’m not a lawyer, so I don’t know the exact meaning of probable cause. But I will say I don’t trust that they [the Honda and Takata Defendants] have provided us with [everything] . . . with—we know that they have not always provided the auto industry with accurate information of all the loss involved. We haven’t gotten the information we need. We’re looking into this. I have serious concerns and will hold them accountable based on the findings"

Dean’s emergency motion was denied, rendered moot by the MDL, still without a leadership team. But, he believes that the issue for civil litigants has not yet been totally resolved.

“I brought this to NHTSA’s attention because this was an important issue,” Dean says. “They began to understand and to ask questions, NHTSA took an unprecedented step, which should be applauded and is necessary, to make sure there is a preservation agreement and protocol. While NHTSA’s order addresses the important issue of collecting, organizing and cataloguing the inflators in a systematic manner, from a civil litigation perspective, I don’t believe the order addresses everything.”

Meanwhile, a consortium of 10 automakers that used Takata airbag inflators in their vehicles has hired Orbital ATK to conduct independent testing on Takata airbag inflators, under the supervision of former NHTSA Acting Administrator David Kelly, they announced today. According Orbital ATK’s website: "ATK expanded into the aerospace market with the acquisitions of Hercules Aerospace Company in 1995 and Thiokol Propulsion in 2001." Morton Thiokol, readers will remember, was the NASA engineering contractor for the Space Shuttle Challenger that exploded in 1986, 73 seconds after the launch, killing all seven aboard. The explosion was traced to a failure of the O-ring seals for the solid rocket boosters. Although Thiokol engineers knew that the rings could fail at low temperatures, management, along with NASA made the decision to launch the space shuttle on Jan, 28, 1986, on a morning with unusually low temperature.

Last week, Chief Counsel O. Kevin Vincent informed Takata, which, up until recently had avoided the civil penalties, that it would be charged $14,000 a day – that’s the maximum $7,000 times two for separate Special Orders sent in October and November -- for each day that it fails to provide an adequate explanation for some 2.4 million documents it has filed with the agency so far.

In looking at Takata’s EWR submissions, we notice that it looks as though there’s something else Takata forgot to give NHTSA. Honda’s already ponied up $70 million for failing to fulfill its EWR obligations.  But, under Transportation Recall Enhancement Accountability and Documentation Act regulations, component manufacturers are also required to submit death and injury claims. We know from Honda’s Part 573 submissions that it was informing the supplier of injuries as earlier as 2004. We know that Takata was named in some lawsuits. Takata has filed some EWR claims, but we see no EWR submissions that match up to any known deaths or injuries. In fact, there is but one airbag claim for a 2003 incident involving a Honda side airbag. The last time Takata submitted anything to the agency was in 2010.

Takata knew of no inflator claims? More fines to come?

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