Takata Declares Bankruptcy Potentially Wiping Out Product Liability Claims

Product Liability

Takata Corporation, a Japanese corporation, declared bankruptcy amid its massive liabilities to car manufacturers and consumers for defective airbags. Despite the bankruptcy, news reports indicate that a Chinese owned (but U.S. based) company, Key Safety Systems, acquired Takata’s assets.

UPDATE-

Takata must settle with claimants as a condition to exit bankruptcy. See here for more information.

What Does Bankruptcy Mean For The Consumer?

While the federal government had mandated that Takata increase the rate at which recall repairs were being made to vehicles with defective airbags, the bankruptcy means that repairs will likely no longer be done according to the timeframes mandated by the government or may be halted altogether. When this happens, the individual car manufacturers are likely on the hook to pay for repairs to all of the recalled vehicles in a “stream of commerce” legal theory in which they will be required to step in where their component manufacturer failed. It remains to be seen whether Key Safety Systems, the successor of Takata, will honor Takata’s obligations to make recall repairs.

Is My Vehicle Going To Be Repaired?

If you have a vehicle with a recalled airbag, you should contact your dealer to check on the status of a repair. It is unclear whether the government is going to require the car manufacturers to make repairs to recalled vehicles. One of the issues that car manufacturers will likely encounter is a lack of available of non-defective airbags in order to make the recalls.

This leaves any injury claim that occurs from this point forward in a questionable position. While a car manufacturer may be held legally liable in strict liability for the airbags, the inability to do something about the problem may provide the manufacturers with a defense. While strict liability was intended to make manufacturers use proper care in choosing who their component suppliers are, the problem with Takata airbags is that there are only a few manufacturers of airbags worldwide for a product that all of us use everyday.

On one hand, Takata acted irresponsibly. On the other hand, car manufacturers did not have much by way of choice and may not be able to do anything about the problem.

Where Do We Go From Here?

As a personal injury attorney, I have to recognize that Takata defective airbag cases have just now become a huge risk for anyone bringing a claim. It is unclear (and perhaps unlikely) that Takata’s Chinese successor is going to assume the liabilities. It is also unclear whether an exception to strict liability will be made for the car manufacturers as the massive liability for the recall just now fell on their shoulders. There is no telling how this will play out in the courts and could take many years to resolve.

What Kinds Of Injury Claims Are Airbag Attorneys Accepting?

If you have a serious injury as a result of a defective airbag, the first thing that you should have a personal injury attorney determine whether a third party is responsible for your injury and has the ability to compensate you. This bankruptcy makes it more important for personal injury plaintiffs to get as much as they can from a person who causes an accident rather than try to seek damages from a product manufacturer.

If the accident was your fault, your claim may be difficult or near impossible to bring because the jury will consider your percentage of fault in the verdict.

Section 768.81, Fla. Stat. reads in part:

(b) In a products liability action alleging that injuries received by a claimant in an accident were enhanced by a defective product, the trier of fact shall consider the fault of all persons who contributed to the accident when apportioning fault between or among them. The jury shall be appropriately instructed by the trial judge on the apportionment of fault in products liability actions where there are allegations that the injuries received by the claimant in an accident were enhanced by a defective product. The rules of evidence apply to these actions.

Reach Out For Professional Legal Help

To find out whether you have a viable product liability case, you should contact a Lakeland, FL product liability attorney for a free case review. If we think that you have a case, we will let you know. On the other hand, if your case is likely to be difficult, we will let you know that as well. Either way, a case review with a Lakeland personal injury attorney is free.

Settlement Update

A settlement was proposed in In Re: Takata Airbag Products Liability Litigation, Master Case No. 1:15-MD-02599-FAM. To find out if your VIN is part of the proposed settlement, click here.