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Takata Hit with $200 Million NHTSA Fine over Defective Airbag Crisis, Violations of the Motor Vehicle Safety Act

Transportation safety regulators at the National Highway Traffic Safety Administration (NHTSA) have just issued Takata two federal orders related to the ongoing Takata airbag recall, the NHTSA announced yesterday. These orders are remarkable in that they:

  • The NHTSA has issued Takata the largest civil penalty in the agency’s history, a Columbia SC personal injury lawyer explains. Here’s why and what this means for Takata moving forward.

    Impose the single largest civil fine the NHTSA has ever issued in its nearly 50-year history – This massive $200 million fine Takata has been hit with includes a $70 million cash penalty that is due immediately, as well as an additional $130 million fine that will become due if the company “fails to meet its commitments” or if it commits any new violations of the Motor Vehicle Safety Act.

  • Mark the first time the NHTSA is invoking its authority to accelerate the rollout of recall remedies – This authority, which the NHTSA was granted in 2000, allows regulators to speed up recall repairs “if manufacturers’ remedy plans are likely to put Americans at risk,” as the NHTSA has pointed out. The decision to invoke this power came out of the findings from regulators’ investigations and review of public comments, which indicated that the use of this authority may be necessary to getting the 23 million or so defective inflators out of circulation ASAP.

Commenting on the NHTSA’s recent actions against Takata, U.S. Transportation Secretary Anthony Foxx explained that:

For years, Takata has built and sold defective products, refused to acknowledge the defect, and failed to provide full information to NHTSA, its customers, or the public… The result of that delay and denial has harmed scores of consumers and caused the largest, most complex safety recall in history. Today’s actions represent aggressive use of NHTSA’s authority to clean up these problems and protect public safety.

NHTSA Administrator Mark Rosekind backed up these statements, noting that:

Today, we are holding Takata responsible for its failures, and we are taking strong action to protect the traveling public… We are accelerating Takata recalls to get safe air bags into American vehicles more quickly, ensuring that consumers at the greatest risk are protected, and addressing the long-term risk of Takata’s use of a suspect propellant.

A Closer Look at the NHTSA Orders Issued to Takata

As part of the two federal orders the NHTSA has issued Takata, the company has agreed to pay the fines and has admitted to:

  • Being aware of the defect associated with its airbags
  • Providing regulators and consumers with “selective, incomplete or inaccurate data” regarding its airbags
  • Failing to issue a “timely recall” for its defective airbags.

As part of the process of getting back into compliance, Takata will now have to do the following (among other things):

  • Submit to “unprecedented oversight” for the next five years
  • Allow the NHTSA to select an independent monitor to track the company’s progress and report on its compliance
  • Phase out the manufacturing and sales of inflators that contain “phase-stabilized ammonium nitrate propellant,” unless Takata can “prove they are safe or can show it has determined why its inflators are prone to rupture”
  • Prioritize the Takata airbag recall according to risk and establish “a schedule by which they must have sufficient parts on hand to remedy the defects for all affected vehicles.”

What do you think about this latest development in the Takata airbag recall? Share your comments with us on Facebook & Google+.

Contact a Columbia SC Personal Injury Lawyer at Chappell Smith & Arden, P.A. Attorneys at Law

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