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$553M in Settlements Reached with Toyota, Subaru, Mazda and BMW in Takata Airbag MDL

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Santa Clara, CA$553.6 million in settlements has been agreed in multi-district litigation (MDL) involving Toyota, Subaru, Mazda and BMW, which will see the automakers pay the sum to end claims brought by plaintiffs over alleged defective Takata airbags. To date, the airbags, which can explode, have been linked with 11 deaths in the US.

According to the settlement terms, BMW of North America LLC will pay $131 million, Mazda North American Operations will pay $75,805,050, Subaru of America Inc. will pay $68,262,257 and Toyota Motor Corp., $278,500,000.

Some 15.8 million vehicles currently have the defective air bag inflators installed, and the settlement is meant to expedite their removal. Additionally, compensation will be provided to class members who suffered economic losses as a result from the Takata airbag recall, such as car rentals.

The settlements provide compensation to class members for economic losses resulting from the recall in the form of reimbursement for reasonable out-of-pocket expenses; a possible residual distribution payment of up to $500; requirements to provide rental cars to the most at-risk class members while they wait for their recall remedies; and the provision of a customer support program for repairs and adjustments on the replacement inflators, including an extended warranty.

Further, a new independent outreach program that seeks to dramatically increase recall remedy completion rates will be established. The program will regularly contact class members through direct mail, phone calls, email, internet ads and social media to educate them about the settlement and incentivize them to receive the recall remedy and exercise their rights under this agreement.

More than nine million Toyota vehicles, 2.6 million Subaru vehicles, 2.3 million BMW vehicles and 1.7 million Mazda vehicles, are covered by the settlement, according to the plaintiffs.

Toyota, Subaru, Mazda and BMW are the first automakers to exit the massive MDL, which covers the largest auto recall in US history.

Takata pled guilty to wire fraud earlier, agreeing to pay $1 billion in fines and restitution. The airbag manufacture has also acknowledged that it used false reports and other misrepresentations to convince automakers to buy air bag systems that contained faulty, inferior or otherwise defective inflators.

The auto companies cite Takata’s guilty plea and the settlement as a “game changer” maintaining they were not aware that the air bags were faulty when they installed them in their vehicles.

The case is In re: Takata Airbag Products Liability Litigation, case number 1:15-md-02599, in the U.S. District Court for the Southern District of Florida.



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