Attorney Gen. Curtis Hill Reaches Settlement With US Takata Group

ACROSS INDIANA -- The Indiana attorney general's office says Attorney General Curtis Hill announced a settlement Tuesday with TK Holdings Inc., the U.S. subsidiary of Takata, ending a multi-state investigation into the company’s failure to report known safety defects with certain airbag inflators in a timely manner. The settlement with Attorney General Curtis Hill also includes the attorney general of 43 other states and the District of Columbia, a release from the Indiana attorney general's office says. According to officials, the settlement centers on allegations that the company concealed safety issues related to airbag systems installed in a wide variety of vehicles,

“Protecting the safety of Hoosier consumer is one of our top priorities,” Attorney General Hill said in a release sent to Patch. “We will always work to ensure that automakers and all others doing business in our state are held accountable for following our laws.”

Auto manufacturers started issuing several recalls of vehicles that had these airbag inflators in 2008, in a response to ruptures (some explosive) when the airbag would deploy. Since then, the release says more than 50 million airbags in more than 37 million vehicles have been recalled, while additional recalls are anticipated through the end of 2019, likely bringing the total number of affected airbags to 65-70 million.

According to the release, the recalls involved the use of phase-stabilized ammonium nitrate (“PSAN”) to inflate airbags upon deployment, which degraded when exposed to heat and humidity over time, especially in wet and warm parts of the U.S. Officials add that during deployment the inflator could explode, destroying the metal casing surrounding the propellant and spraying shrapnel into the vehicle’s passenger cabin.

The Indiana attorney general's office reports at least 20 people have died worldwide and hundreds more have been injured as a result of this defect.

TK Holdings Inc. filed a bankruptcy case in Chapter 11 in June 2017, and its reorganization plan has been confirmed by the U.S. Bankruptcy Court for the District of Delaware. The consent decree and settlement agreement have been presented to that court for approval.

Officials report TK Holdings Inc.'s parent company pled guilty to manipulating testing data and turning in false and misleading reports to auto manufacturers. According to the release, the company knew about many ruptures that occurred as early as 2004, but appropriate action to recall these unsafe inflators didn't happen until Nov. 2014..

The Indiana attorney general's office says the states claimed that these actions were unfair and deceptive, adding that the automaker’s actions violated state consumer protection laws, including Indiana’s Deceptive Consumer Sales Act.

The release states that under the consent decree and settlement agreement, TK Holdings Inc. and its successor, Reorganized TK Holdings, shall:

• Not advertise or otherwise represent the safety of its airbag systems or phase-stabilized ammonium nitrate in any way that is false, deceptive, or misleading;
• Not represent that its airbags are safe unless supported by competent and reliable scientific or engineering evidence;
• Not falsify or manipulate testing data, or provide any testing data that the companies know is inaccurate;
• Except as needed to fulfill its obligations under the various recalls, sell any airbag systems using PSAN as a propellant;
• Comply with state and federal law as well as the NHTSA Consent Order and Coordinated Remedy Order; and
• Continue to cooperate with auto manufacturers to ensure that replacement airbag inflators are made available as expeditiously as possible from all possible sources.

RELATED:

• Takata Adds 3.3 Million Air Bag Inflators To Massive Recall
• Raising Awareness About Faulty Takata Airbags

Officials say TK Holdings Inc. has also agreed to reimburse the multi-state coalition for its investigative costs, and for the entry of stipulated civil penalty in the amount of $650 million.

The release also states that the coalition agreed that given the pending bankruptcy and the company’s inability to pay its debts, this penalty would be subordinated in order to maximize the recovery available to consumers who were victims of this airbag defect.

More: in.gov/attorneygeneral/

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