Hawaii Becomes First State to Sue Takata

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By Martina Barash

May 16 — Takata Corp. and Honda Motor Co. are each facing civil penalties up to $10,000 per vehicle over allegedly defective air bags in a complaint filed by the state of Hawaii, the first state to bring such a suit.

The complaint doesn't specify a total civil penalty for the alleged violations of the state's consumer protection statute. But residents of Hawaii purchased or leased more than 70,000 vehicles with Takata air bags, of which more than 20,000 were Hondas, according to the complaint, which was filed April 13 in Hawaii's First Circuit Court.

Takata air bags using ammonium nitrate as a propellant have exploded, causing 10 deaths in the U.S. and more than 100 injuries, the state alleges.

The 10th fatality occurred in late March (44 PSLR 388, 4/11/16).

The companies should also pay restitution to affected consumers, disgorge “ill-gotten gains” to the state and launch an education campaign, the state's Office of Consumer Protection says in the complaint.

“Hawai'i's geography and location create precisely the kinds of temperature and humidity conditions that adversely affect the stability of ammonium nitrate,” the complaint says.

Takata allegedly engaged in unfair or deceptive conduct by concealing knowledge about the air bags' hazards, manipulating test data and failing to provide full data to the National Highway Traffic Safety Administration, according to the complaint. Honda also failed to disclose information about the air bags to the public, the complaint says.

Vehicle owners are in an “untenable position” because they must continue driving with their existing air bags, disable their air bags and risk injury in an accident, or stop driving entirely, the complaint says.

Melina D. Sanchez, enforcement attorney for the Office of Consumer Protection, along with Cronin, Fried, Sekiya, Kekina & Fairbanks and Cohen Milstein Sellers & Toll PLLC, represented the state.

To contact the reporter on this story: Martina S. Barash in Washington at mbarash@bna.com

To contact the editors responsible for this story: Steven Patrick at spatrick@bna.com and Jeffrey D. Koelemay at jkoelemay@bna.com

For More Information

The complaint is available at http://src.bna.com/e1N.