Case 2:14-cv-02407-SLB Document 1 Filed 12/16/14 Page 1 of 57 … · Airbags. Takata will also soon face questioning from the United States Senate Committee on Commerce. 11. Takata’s

IN THE UNITED STATES DISTRICT COURT FOR

THE NORTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

CATHRYN TANNER and MARITA

MURPHY, individually and on behalf

of all others similarly situated,

Plaintiffs,

vs.

TAKATA CORPORATION, TK

HOLDINGS, INC., HIGHLAND

INDUSTRIES, INC., HONDA

MOTOR CO., LTD, HONDA MOTOR

CO., INC., FORD MOTOR

COMPANY, BMW OF NORTH

AMERICA LLC, BMW AG, BMW

MANUFACTURING CO., LLC,

NISSAN NORTH AMERICA, INC.,

NISSAN MOTOR CO., LTD,

TOYOTA MOTOR CORP., TOYOTA

MOTOR SALES, U.S.A., INC.,

TOYOTA MOTOR ENGINEERING &

MANUFACTURING NORTH

AMERICA, INC., CHRYLSER

GROUP, LLC, GENERAL MOTORS

CO., MAZDA MOTOR CORP.,

MAZDA MOTOR OF AMERICA,

INC., MITSUBISHI MOTORS

CORP., and SUBARU OF AMERICA,

INC.

Defendants.

Case No.

CLASS ACTION COMPLAINT

JURY TRIAL DEMANDED

FILED 2014 Dec-17 PM 03:58U.S. DISTRICT COURT

N.D. OF ALABAMA

Case 2:14-cv-02407-SLB Document 1 Filed 12/16/14 Page 1 of 57

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1. Plaintiffs, Cathryn Tanner and Marita Murphy, bring this action

individually and on behalf of all persons similarly situated in the United States who

purchased or leased certain vehicles manufactured, distributed, and/or sold by Honda

Motor Co., Ltd., Ford Motor Company, BMW NA LLC, BMW AG, Nissan North

American, Inc., Nissan Motor Co., Ltd., Toyota Motor Corp., Toyota Motor Sales,

U.S.A., Inc., Toyota Motor Engineering & Manufacturing North America, Inc.,

Chrysler Group, LLC, General Motors Co., Mazda Motor Corp., Mazda Motor of

America, Inc., Mitsubishi Motors Corp., and Subaru of America, Inc., and/or any of

their related subsidiaries, successors, or affiliates (collectively, the “Vehicle

Manufacturers”), with defective airbags manufactured by Takata Corporation, TK

Holdings, Inc., Highland Industries, Inc., and/or its related subsidiaries, successors,

or affiliates (collectively, “Takata”), as described below.1 Plaintiffs bring this action

for violation of the Magnuson-Moss Warranty Act, fraudulent concealment, and

assert additional statutory and common law claims. Plaintiffs seek damages,

including punitive damages, in addition to equitable and declaratory relief, based

upon the following allegations.

2. Takata is headquartered in Japan with worldwide subsidiaries, and is

a leading manufacturer of transportation-related safety devices, including airbags,

1 Takata and the Vehicle Manufacturers are referred to collectively herein as

“Defendants.”


2

seat belts, school bus seats, and child restraint systems. Takata is the manufacturer

of all of the Defective Airbags (defined below) at issue in this Complaint.

3. Defendants manufactured or installed defective airbags (“Defective

Airbags”) in millions of vehicles, and then actively concealed the defects from

federal regulators and the public. The Defective Airbags not only cannot be relied

upon to provide the expected safety, but in many cases can become a weapon,

exploding with metal debris and projecting shrapnel into the face, neck, and body of

passengers. Only after exhausting their attempts to downplay the extent of the harm

caused by the Defective Airbags did Defendants finally acknowledged the massive

scope of the problem.

4. To date, approximately 16 million motor vehicles with Takata-

manufactured airbags have been recalled worldwide due to the defects described

herein.

5. Vehicles that have been recalled because they contain Defective

Airbags manufactured by Takata (referred to herein as the “Class Vehicles”) include

the following:2

2 As reported in the October 22, 2014 National Highway Traffic Safety

Administration (“NHTSA”) Consumer Advisory.


3

BMW: 627,615 total number of

potentially affected vehicles

2000 – 2005 3 Series Sedan

2000 – 2006 3 Series Coupe

2000 – 2005 3 Series Sports Wagon

2000 – 2006 3 Series Convertible

2001 – 2006 M3 Coupe

2001 – 2006 M3 Convertible

Chrysler: 371,309 total number of


2003 – 2008 Dodge Ram 1500

2005 – 2008 Dodge Ram 2500

2006 – 2008 Dodge Ram 3500

2006 – 2008 Dodge Ram 4500

2008 – Dodge Ram 5500

2005 – 2008 Dodge Durango

2005 – 2008 Dodge Dakota

2005 – 2008 Chrysler 300

2007 – 2008 Chrysler Aspen

Ford: 58,669 total number of


2004 – Ranger

2005 – 2006 GT

2005 – 2007 Mustang

General Motors: undetermined total

number of potentially affected

vehicles

2003 – 2005 Pontiac Vibe

2005 – Saab 9‐2X

Honda: 5,051,364 total number of


2001 – 2007 Honda Accord)

2001 – 2002 Honda Accord

2001 – 2005 Honda Civic

2002 – 2006 Honda CR‐V

2003 – 2011 Honda Element

2002 – 2004 Honda Odyssey

2003 – 2007 Honda Pilot

2006 – Honda Ridgeline

2003 – 2006 Acura MDX

2002 – 2003 Acura TL/CL

2005 – Acura RL

Mazda: 64,872 total number of


2003 – 2007 Mazda6

2006 – 2007 MazdaSpeed6

2004 – 2008 Mazda RX‐8

2004 – 2005 MPV

2004 – B‐Series Truck

Mitsubishi: 11,985 total number of


2004 – 2005 Lancer

2006 – 2007 Raider

Nissan: 694,626 total number of


2001 – 2003 Nissan Maxima

2001 – 2004 Nissan Pathfinder

2002 – 2004 Nissan Sentra

2001 – 2004 Infiniti I30/I35

2002 – 2003 Infiniti QX4

2003 – 2005 Infiniti FX35/FX45


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Subaru: 17,516 total number of


2003 – 2005 Baja

2003 – 2005 Legacy

2003 – 2005 Outback

2004 – 2005 Impreza

Toyota: 877,000 total number of


2002 – 2005 Lexus SC

2002 – 2005 Toyota Corolla

2003 – 2005 Toyota Corolla Matrix

2002 – 2005 Toyota Sequoia

2003 – 2005 Toyota Tundra

6. The defect in Takata’s airbags dates back to at least April 2000, when,

according to a recall notice, some airbags produced by Takata between April 2000 and

September 2002 were said to contain defects. Takata first became aware of the defect

no later than 2001 when the dangers associated with its airbags came to light in Isuzu

vehicles and the first recall was issued. Since the initial announcement in 2001,

additional recalls were announced every year from 2008 to 2011.

7. The Defective Airbags have repeatedly exploded in a violent and

uncontrolled fashion, literally spraying vehicle interiors with metal shrapnel, maiming

and sometimes killing the occupants. At least four people have been killed, and well

over one hundred injured, some severely, by Takata’s violently exploding, shrapnel-

spewing defective airbags.

8. Moreover, when Takata engineers investigated and discovered the causes

of these violent injuries and deaths, corporate management ordered them to delete their

findings, destroy the evidence, and keep silent about their discoveries as well as their

proposed redesign of the malfunctioning airbag parts.


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9. Management from the Vehicle Manufacturers learned about the defects

from Takata, and even assisted Takata in obtaining airbags from their vehicles that had

been brought in for service so that Takata could secretly test them. Yet, the Vehicle

Manufacturers failed until relatively recently to take any action, such as recalling

vehicles, to address and remedy the defects. Instead, for years, the Vehicle

Manufacturers kept the facts secret to preserve their profits and protect their corporate

reputations.

10. Takata and the Defective Airbags are the subject of numerous

governmental investigations. For example, on November 13, 2014, Takata

confirmed that it had received a subpoena from a federal grand jury in New York

which seeks documents related to Takata’s knowledge of risks posed by its Defective

Airbags. Takata will also soon face questioning from the United States Senate

Committee on Commerce.

11. Takata’s unlawful cover-up, in tandem with the Vehicle Manufacturers,

has endured over ten years, until whistleblower employees came forward to reveal the

truth. During that time, Takata falsely and fraudulently misrepresented the safety of its

airbags, and the Vehicle Manufacturers have falsely and fraudulently misrepresented

the safety of their affected vehicles to the public, to customers, and to federal regulators.

Takata also falsely and fraudulently misrepresented to several automobile


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manufacturers that there were no defects in its airbags, and/or that any defects were

confined to a small number of the Vehicle Manufacturers’ vehicles.

12. The Defective Airbags installed in the Class Vehicles are defective and

prone to rupturing when they are deployed and inflated during a collision. When the

Defective Airbags rupture, metal shards, shrapnel, and other potentially lethal debris

are expelled into the Class Vehicles, placing the occupants in immediate risk of serious

bodily injury or death.

13. Despite their early knowledge of the defective nature of the airbags,

Takata and the Vehicle Manufacturers failed to timely disclose the defect in the Class

Vehicles’ airbags, breaching their duty to do so.

14. Defendants’ conduct is in breach of express and implied warranties and in

violation of state and federal law. Defendants have and will continue to benefit from

their unlawful conduct while consumers are harmed as they continue to drive the Class

Vehicles. Had Plaintiffs and the other members of the proposed Class known about the

defect at the time of purchase or lease, they would not have bought or leased the Class

Vehicles, or would have paid substantially less for them.

15. To remedy Defendants’ unlawful conduct, Plaintiffs, on behalf of the

proposed Class and Alabama Subclass, seek damages and restitution from Defendants,

as well as notification to Class members about the full extent of the defect in the Class

Vehicles’ Defective Airbags.


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PARTIES

16. Plaintiff Cathryn Tanner is a citizen of the State of Alabama. Ms.

Tanner owns a 2003 Honda Civic.

17. Plaintiff Marita Murphy is a citizen of the State of Alabama. Ms. Murphy

owns a 2003 Honda Pilot.

18. Defendant Takata Corporation (“Takata”) is a foreign, for-profit

corporation with its principal place of business in Tokyo, Japan. Takata is a specialized

supplier of automotive safety systems that designs, manufactures, tests, markets,

distributes, and sells airbags. Takata manufactures component parts in its own facilities.

19. Defendant TK Holdings, Inc. (“TK Holdings”) is a subsidiary of Takata

headquartered in Auburn Hills, Michigan. TK Holdings designs, sells, manufactures,

tests, and distributes airbags in the United States, including the Defective Airbags at

issue in this litigation.

20. Defendant Highland Industries, Inc. (“Highland”) is a subsidiary of

Takata and is headquartered in Kernersville, North Carolina. Highland manufactures

industrial and automotive textile product solutions, including airbag fabrics for the

automotive airbag industry. Highland manufactures airbags in the United States,

including the Defective Airbags at issue in this litigation.

21. Defendant Honda Motor Co., Ltd. is a Japanese corporation with its

principal place of business in Tokyo, Japan, that designs, markets, manufactures, and


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sells automobiles through independent retail dealers, outlets, and authorized dealerships

primarily in Japan, North America, Europe, and Asia.

22. Defendant Honda Motor Co., Inc., is a California corporation with its

headquarters in Torrance, California. It is the North American subsidiary of Honda

Motor Co., Ltd., for which it conducts the sales, marketing, manufacture, assembly, and

operational activities in North America.

23. Defendants Honda Motor Co. Ltd. and Honda Motor Co., Inc. are

collectively referred to herein as “Honda.”

24. Defendant Ford Motor Company (“Ford”) is a Delaware corporation with

its principal place of business in Dearborn, Michigan.

25. Defendant BMW of North America LLC (“BMW NA LLC”) is a

Delaware limited liability company with its principal place of business in Woodcliff

Lake, New Jersey. BMW NA LLC imports and sells BMW automobiles within the

United States.

26. Defendant BMW Manufacturing Co., LLC (“BMW Manufacturing”) is

part of BMW’s global manufacturing network and is located in Spartanburg, South

Carolina.

27. Defendant BMW AG is a German stock corporation with its principal

place of business in Munich, Germany. BMW AG manufactures BMW automobiles.


9

Defendants BMW NA LLC, BMW Manufacturing Co., LLC, and BMW AG are

collectively referred to herein as “BMW.”

28. Defendant Nissan North America, Inc. is a California corporation with its

principal place of business in Franklin, Tennessee. Nissan North America, Inc.

manufactures and imports automobiles and sells them in the United States.

29. Defendant Nissan Motor Co., Ltd. is a Japanese corporation with its

principal place of business in Kanagawa, Japan. Nissan Motor Co., Ltd. manufactures

Nissan automobiles.

30. Nissan North America, Inc. and Nissan Motor Co., Inc. are collectively

referred to herein as “Nissan.”

31. Defendant Toyota Motor Corp. is the world’s largest automaker and the

largest seller of automobiles in the United States and is a Japanese corporation

headquartered in Aichi Prefecture, Japan.

32. Defendant Toyota Motor Sales, U.S.A., Inc. is a wholly-owned subsidiary

of Toyota Motor Corp. and is responsible for the sales, marketing, and distribution in

the United States of automobiles manufactured by Toyota Motor Corp.. It is

headquarter in Torrance, California.

33. Defendant Toyota Motor Engineering & Manufacturing, North America,

Inc. is a subsidiary of Toyota Motor Corp., is headquartered in Erlanger, Kentucky, and

has major operations in Arizona, California, and Michigan.


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34. Defendants Toyota Motor Corp., Toyota Motor Sales, U.S.A., Inc., and

Toyota Motor Engineering & Manufacturing, North America, Inc. are collectively

referred to herein as “Toyota.”

35. Defendant Chrysler Group, LLC (“Chrysler”) is a Delaware corporation

with its principal place of business in Auburn Hills, Michigan. Chrysler manufactures

and sells automobiles through independent retail dealers, outlets, and authorized dealers

worldwide.

36. Defendant General Motors, Co. (“GM”) is a Delaware corporation with

its principal place of business in Detroit, Michigan. GM manufactures and sells

automobiles through independent retail dealers, outlets, and authorized dealers

worldwide.

37. Defendant Mazda Motor Corp. is a foreign for-profit corporation with its

principal place of business in Hiroshima, Japan. It manufactures and sells automobiles

through independent retail dealers, outlets, and authorized dealers worldwide.

38. Defendant Mazda Motor of America, Inc. is a subsidiary of Mazda Motor

Corp. headquartered in Irvine, California. It conducts the sale, marketing, and

operational activities for Mazda cars, trucks, and sport utility vehicles and automobile

parts in the United States.

39. Defendants Mazda Motor Corp. and Mazda Motor of America, Inc. are

collectively referred to herein as “Mazda.”


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40. Defendant Mitsubishi Motors Corp. (“Mitsubishi”) is a foreign for-profit

corporation with its principal place of business in Tokyo, Japan. It manufactures and

sells automobiles through independent retail dealers, outlets, and authorized dealers

worldwide.

41. Defendant Subaru of America, Inc. (“Subaru”) is a for-profit corporation

with its principal place of business in Cherry Hill, New Jersey. It manufactures and

sells automobiles through independent retail dealers, outlets, and authorized dealers

worldwide.

JURISDICTION AND VENUE

42. Jurisdiction is proper in this Court pursuant to the Class Action Fairness

Act, 28 U.S.C. §1332(d), because members of the proposed Class are citizens of states

different from Defendants’ home states and the aggregate amount in controversy

exceeds $5,000,000, exclusive of interest and costs.

43. This Court also has original federal question jurisdiction because

Plaintiffs’ first claim for relief arises under the Magnuson-Moss Warranty Act, 15

U.S.C. §2301, et seq.

44. The Court has supplemental jurisdiction over Plaintiffs’ remaining

claims pursuant to 28 U.S.C. §1367.


12

45. Venue is proper in this Court pursuant to 28 U.S.C. §1391(a) because

Defendants conduct substantial business in this District and have caused harm to

Members of the Class who reside in this District.

THE STATUTE OF LIMITATIONS IS TOLLED

A. Fraudulent Concealment

46. Takata has known of the Defective Airbags in the vehicles since at least

2001 – and possibly earlier – and certainly well before Plaintiffs and Class Members

acquired the Class Vehicles.

47. Takata has concealed from or failed to notify Plaintiffs, Class Members,

and the public of the full and complete nature of the Defective Airbags.

48. The Vehicle Manufacturers also knew of the Defective Airbags much

earlier than they disclosed this information to the public.

49. Although Defendants now acknowledge that they know of the serious

and possibly deadly defect, Defendants did not fully disclose the Defective Airbags

and, in fact, downplayed the widespread prevalence of the problem.

50. In 2007, Defendants jointly studied the Defective Airbags in a secret

program. In this program, certain Vehicle Manufacturers would replace all or part

of the Defective Airbags from cars brought into their dealerships for unrelated

warranty repairs. The Defective Airbags, or their component parts, would then be

sent to Takata for study and review of the defect.


13

51. Despite early knowledge of the Defective Airbags and the damage they

could cause, Defendants fraudulently concealed their knowledge from the public,

insisting that the defect was not serious and was limited to a small subset of motor

vehicles.

52. While Defendants have only now acknowledged to safety regulators

that Takata’s airbags were defective, Defendants for years neither adequately

investigated nor disclosed the lethal nature of the problem, and affirmatively

downplayed and concealed the pervasiveness of the problem.

53. Defendants’ failures to warn or take timely remedial action constitute

substantial factors in causing Plaintiffs’ current injuries.

54. Defendants are under a continuing duty to disclose the true character,

quality, and nature of the Takata airbags used in their vehicles, and because

Defendants concealed the true character, quality, and nature of these airbags, they

may not assert any statute of limitations defense.

55. The claims alleged herein did not accrue until Plaintiffs and the other

members of the Class discovered that their vehicles had the Defective Airbags.

56. Plaintiffs and other members of the Class had no realistic ability to

discern that the vehicles were defective.


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B. Estoppel

57. Defendants were and are under a continuous duty to disclose to

Plaintiffs and Class Members the true character, quality, and nature of the Class

Vehicles and the Defective Airbags therein. They actively concealed the true

character, quality, and nature of the Class Vehicles and the Defective Airbags

therein, and knowingly made misrepresentations about the quality, reliability,

characteristics, and performance of the Class Vehicles and their Defective Airbags.

Plaintiffs and Class Members reasonably relied upon Takata and Honda’s knowing

and affirmative misrepresentations and/or active concealment of these facts.

CLASS ACTION ALLEGATIONS

58. Plaintiffs bring this lawsuit as a class action on their own behalf and

on behalf of all other persons similarly situated as members of the proposed

Class, pursuant to Fed. R. Civ. P. 23(a) and (b)(3) and/or (b)(2) and/or ( c)(4).

This action satisfies the numerosity, commonality, typicality, adequacy,

predominance, and superiority requirements of those provisions.

59. Plaintiffs seek to represent the following Class (the “National Class”):

All persons or entities who purchased or entered into a

lease for one or more vehicles in the United States for

personal use and not for resale that contained Defective

Airbags.

60. Plaintiffs further seek to represent the following Subclass (the

“Alabama Subclass”):


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All persons or entities who purchased or entered into a

lease for one or more vehicles in the state of Alabama for

personal use and not for resale that contained Defective

Airbags.

61. The National Class and the Alabama Subclass are collectively referred

to as the “Classes.” Excluded from the Classes are Defendants, their employees,

co-conspirators, officers, directors, legal representatives, heirs, successors, and

wholly or partly owned subsidiaries or affiliated companies; and the judicial

officers and their immediate family members and associated court staff assigned to

this case. Also excluded from the Classes are any individuals claiming damages

from personal injuries allegedly arising from the Class Vehicles.

62. Plaintiffs reserve the right to modify or amend the definition of the

Classes before the Court determines whether certification is appropriate.

63. Certification of Plaintiffs’ claims for class-wide treatment is

appropriate because Plaintiffs can prove the elements of her claims on a class-wide

basis using the same evidence as would be used to prove those elements in individual

actions alleging the same claims.

A. Numerosity

64. Members of the proposed Classes are so numerous that joinder of

all s u c h members would be impracticable. On information and belief, there are

millions of Class Vehicles nationwide, and thousands of Class Vehicles in each

state. The individual Class Members are also ascertainable, as the names and


16

addresses of all Class Members can be identified in Defendants’ books and records,

as well as registration and sales records. The precise number of Class Members

numbers at least in the thousands and can be obtained only through discovery, but

the numbers are clearly more than can be consolidated in one complaint such that it

would be impractical for each member to bring suit individually. Plaintiffs do not

anticipate any difficulties in the management of the action as a class action.

B. Commonality

65. There are questions of law and fact that are common to all of the

Plaintiffs’ and the Class Members’ claims. These common questions predominate

over any questions that go particularly to any individual member of the Classes.

Among such common questions of law and fact are the following:

(a) whether the impacted vehicles contain or contained

Defective Airbags;

(b) whether the vehicles containing Defective Airbags have

suffered diminution of value as a result of having the

Defective Airbags;

(c) whether Defendants knew or should have known about the

Defective Airbags;


17

(d) whether Defendants had a duty to disclose the Defective

Airbags to Plaintiffs and other members of the proposed

Classes;

(e) whether Defendants omitted or failed to disclose material

facts that might affect Plaintiffs’ and the Class Members’

decision whether to purchase or lease vehicles with Defective

Airbags;

(f) whether Defendants misrepresented that the vehicles

containing Defective Airbags were safe;

(g) whether Defendants engaged in unfair, deceptive, unlawful,

and/or fraudulent acts or practices by failing to disclose that

the vehicles with Defective Airbags were manufactured with

defective airbag inflators;

(h) whether a reasonable consumer would be likely to be misled

by Defendants’ conduct;

(i) whether Defendants have been unjustly enriched by their

conduct;

(j) whether the vehicles containing Defective Airbags were unfit

for the ordinary purpose for which they were purchased or

leased; and


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(k) whether Plaintiffs and the Classes are entitled to equitable

relief, including injunction.

C. Typicality

66. Plaintiffs are members of the Classes they seek to represent.

Plaintiffs’ claims are typical of the Nationwide Class and the Alabama Subclass

claims because of the similarity, uniformity, and common purpose of Defendants’

unlawful conduct. Each Class Member has sustained, and will continue to sustain,

damages in the same manner as Plaintiffs as a result of Defendants’ wrongful

conduct.

D. Adequacy of Representation

67. Plaintiffs are adequate representatives of the C lasses t hey seek to

represent and will fairly and adequately protect the interests of those Classes.

Plaintiffs are committed to the vigorous prosecution of this action and have retained

competent counsel, experienced in litigation of this nature, to represent them. There

is no hostility between Plaintiffs and the unnamed Class Members. Plaintiffs

anticipate no difficulty in the management of this litigation as a class action.

68. To prosecute this case, Plaintiffs have chosen the undersigned law

firms, which are very experienced in class action litigation and have the financial

and legal resources to meet the substantial costs and legal issues associated with this

type of litigation.

E. Requirements of Fed. R. Civ. P. 23(b)(3)


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69. The questions of law or fact common to Plaintiffs’ and each Class

Members’ claims predominate over any questions of law or fact affecting only

individual members of the Classes.

70. Common issues predominate when, as here, liability can be determined

on a class-wide basis.

71. When determining whether common questions predominate, courts

focus on the liability issue, and if the liability issue is common to the class as is the

case at bar, common questions will be held to predominate over individual questions.

F. Superiority

72. A class action is superior to individual actions in part because

of the non- exhaustive factors listed below:

(a) joinder of all Class Members would create extreme

hardship and inconvenience for the affected

customers as they reside all across the states;

(b) individual claims by Class Members are impractical

because the costs to pursue individual claims exceed

the value of what any one class member has at stake.

As a result, individual Class Members have no

interest in prosecuting and controlling separate

actions;


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(c) there are no known individual Class Members who

are interested in individually controlling the

prosecution of separate actions;

(d) the interests of justice will be well served by

resolving the common disputes of potential Class

Members in one forum;

(e) individual suits would not be cost effective or

economically maintainable as individual actions;

and

(f) the action is manageable as a class action.

G. Requirements of Fed. R. Civ. P. 23(b)(2)

73. Defendants have acted or failed to act in a manner generally

applicable to the class, thereby making appropriate final injunctive relief or

corresponding declaratory relief with respect to the Classes as a whole.

FACTUAL ALLEGATIONS

74. Takata is one of the largest manufacturers in the world of automotive

safety devices, including airbags. It was established in 1933 as a textile


21

manufacturer in Japan. In or around 1976, Takata began manufacturing airbags for

automobiles.

75. Starting in 1983, Takata began supplying airbags to United States

customers, including police agencies for use in an airbag fleet test program as part

of a safety campaign started by the United States Department of Transportation.

76. In 1987, Takata began production of its driver’s side airbag modules

and supplied those to American customers.

77. In 1988, Takata established Highland as a production base for textiles,

airbags, and other automobile interior components. In 1989, Takata established TK

Holdings as a designer, manufacturer, distributor, seller, and tester of airbags in the

American market.

78. In 1990, Takata began the production and sale of its passenger seat

airbags in the United States and internationally.

79. Takata not only makes airbags, but also the high-explosive devices that

inflate them, using technology borrowed from rocket engines. Airbags evolved from

an expensive option to become standard equipment on millions of cars, and Takata

became one of the top three manufacturers worldwide.

80. By 2006, airbags accounted for approximately 37.3% of Takata’s sales,

and since then, that figure has increased. In 2011, airbags accounted for

approximately 46.2% of Takata’s sales.


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81. After a series of accidents, including those described above and the

deaths of at least four people, Takada has become the epicenter of the largest airbag-

related recall in history.

82. The Vehicle Manufacturers have used Takata’s Defective Airbags for

lengthy periods of time.

83. This lawsuit concerns the following Class Vehicles equipped with

Takata airbags:

BMW: 627,615 total number of


2000 – 2005 3 Series Sedan

2000 – 2006 3 Series Coupe

2000 – 2005 3 Series Sports Wagon

2000 – 2006 3 Series Convertible

2001 – 2006 M3 Coupe

2001 – 2006 M3 Convertible

Chrysler: 371,309 total number of


2003 – 2008 Dodge Ram 1500

2005 – 2008 Dodge Ram 2500

2006 – 2008 Dodge Ram 3500

2006 – 2008 Dodge Ram 4500

2008 – Dodge Ram 5500

2005 – 2008 Dodge Durango

2005 – 2008 Dodge Dakota

2005 – 2008 Chrysler 300

2007 – 2008 Chrysler Aspen

Ford: 58,669 total number of


2004 – Ranger

2005 – 2006 GT

2005 – 2007 Mustang

General Motors: undetermined total

number of potentially affected

vehicles

2003 – 2005 Pontiac Vibe

2005 – Saab 9‐2X


23

Honda: 5,051,364 total number of


2001 – 2007 Honda Accord)

2001 – 2002 Honda Accord

2001 – 2005 Honda Civic

2002 – 2006 Honda CR‐V

2003 – 2011 Honda Element

2002 – 2004 Honda Odyssey

2003 – 2007 Honda Pilot

2006 – Honda Ridgeline

2003 – 2006 Acura MDX

2002 – 2003 Acura TL/CL

2005 – Acura RL

Mazda: 64,872 total number of


2003 – 2007 Mazda6

2006 – 2007 MazdaSpeed6

2004 – 2008 Mazda RX‐8

2004 – 2005 MPV

2004 – B‐Series Truck

Mitsubishi: 11,985 total number of


2004 – 2005 Lancer

2006 – 2007 Raider

Nissan: 694,626 total number of


2001 – 2003 Nissan Maxima

2001 – 2004 Nissan Pathfinder

2002 – 2004 Nissan Sentra

2001 – 2004 Infiniti I30/I35

2002 – 2003 Infiniti QX4

2003 – 2005 Infiniti FX35/FX45

Subaru: 17,516 total number of


2003 – 2005 Baja

2003 – 2005 Legacy

2003 – 2005 Outback

2004 – 2005 Impreza

Toyota: 877,000 total number of


2002 – 2005 Lexus SC

2002 – 2005 Toyota Corolla

2003 – 2005 Toyota Corolla Matrix

2002 – 2005 Toyota Sequoia

2003 – 2005 Toyota Tundra

84. The airbags installed in the Class Vehicles were designed,

manufactured, and tested by Takata in the 1990s and early 2000s. The airbags in the

Class Vehicles represented a redesign of earlier airbag models and relied on inflation

through an explosive based on a compound used in fertilizers, which is housed in a


24

metal structure (the “Inflator”). The redesign was done to make the airbags more

compact, and to also reduce the toxic fumes that were emitted after deployment in

earlier models.

85. The Inflator is, however, defective. Upon deployment of the Class

Vehicles’ airbags, the Inflator explodes and ruptures the metal structure housing in

the process. Upon rupture, the Inflator and metal debris and shrapnel puncture the

airbag and are expelled into the interior of the Class Vehicles, placing the driver and

any occupants of the Class Vehicles at risk of serious bodily injury or death.

86. The Takata airbags were propelled with a blend of chemicals that

included ammonium nitrate (a common explosive also used to make fertilizer).

Azides, which previously were used in most airbags, were phased out early in the

2000s, which caused Takata’s new, azide-free inflators to be in high demand.

87. The ammonium nitrate mix generates gas more efficiently than other

chemicals used by some rivals, but it can also be unstable, and particularly so if

exposed to moisture.

88. Machines at Takata’s factories packed the chemical propellant into

“wafers,” which are then stacked inside the inflator, a device that shoots out hot gas

to inflate an airbag within thousandths of a second after sensors detect a car crash.

89. But if the wafers crumble or break, they can burn too fast, creating a

high- pressure explosion.


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90. Takata now acknowledges where it went wrong was in making those

wafers. Takata identified a list of problems to United States safety regulators,

including that it failed to properly store propellant to shield it from moisture, which

can cause wafers to crumble many years later, and that some wafers were pressed

together with too little force. In some cases, inflators were even made with just six

wafers, instead of the required seven.

91. According to an anonymous former Takata insider, the defective wafers

were made at a period when the company was under intense pressure from its

customers to boost output to meet surging demand. Takata said at the time:

“Production demands vary over time, but our company’s commitment to delivering

quality products never varies.”

92. This turned out not to be so. The two Takata plants that manufactured

the Defective Airbags at issue here, located in Moses Lake, Washington and

Monclova, Mexico, respectively, have made Defective Airbags that have been

installed in vehicles manufactured by no fewer than ten different automakers.

93. While Takata’s own philosophy statement claims that Takata is

“motivated by the preciousness of life” and further pledges to “communicate openly

and effectively,” this has proven not to be the case. Takata has fallen woefully short

of living up to its “dream of ‘a society with zero fatalities from traffic accidents[,]’”


26

and particularly so where people are being severely injured, and in some cases dying,

not from the “traffic accident,” but from Takata’s airbags themselves.

94. Starting in or about 2000 and continuing until at least 2002, Takata

experienced problems in its manufacturing plants in Moses Lake, Washington and

Monclava, Mexico. Specifically, propellant “wafers” in units manufactured at

Moses Lake were improperly compressed, and wafers at the Mexican plant had been

exposed to excess moisture.

95. Also in the early 2000s, Takata had weak and insufficient controls over

the transportation of its airbag units to manufacturers. Takata’s internal safety rules

for storing, handling and transporting airbag components and units required that any

dropped or impacted device “must be immediately recycled as an ‘unsafe device’”

because “[s]uch impact to a device can cause several problems that may result

in an increased potential for an energetic disassembly” (i.e., uncontrolled

explosion). Similarly, a 2005 email warned employees that “[t]he propellant

arrangement inside [the Inflator] is what can be damaged when the airbags are

dropped. Here you can see why it is important to handle our product properly.”

96. Internal Takata videotapes from that period show pallets of airbags

toppling off a forklift onto a loading dock at a Takata plant, and then being loaded

onto trucks for delivery. Manufactured Takata airbags were also exposed to

moisture during shipment, despite efforts to seal trucks from inclement weather.


27

97. Takata has known about the Defective Airbags since at least early 2001,

when Isuzu recalled various models of its vehicles due to a number of airbag

explosions caused by the defective Inflators.

98. Likewise, in April 2002, a Takata airbag exploded in a Toyota Corolla.

Shortly thereafter, Takata made certain changes and/or upgrades to its production

facility in Moses Lake, changes it claims are unrelated to the 2002 incident, but

should have stopped the factory from producing airbags with a defect.

99. Between 2004 and 2010, there were numerous reported incidents of

Takata airbags exploding in various makes and models of the Class Vehicles.

100. In Alabama in 2004, a Takata airbag exploded in a Honda Accord,

shooting out metal fragments and severely injuring the car’s driver. Honda and

Takata could not explain it, deemed it an “anomaly,” and did not issue a recall or

seek involvement of federal safety regulators. Though Takata reported to Honda

that it was unable to find a cause, Honda determined that Takata provided

reasonable explanation of the event as an anomaly, and did not tell regulators about

this incident for more than four years after it happened.

101. In February and June 2007, Honda told Takata about additional airbag

ruptures that year, but, again, Honda did not initiate a recall or provide information

about the ruptures to federal regulators. According to regulatory filings, Honda

wanted to wait for results from a “failure mode analysis” being conducted by Takata.


28

102. The danger was not disclosed for years after the first reported incident

in 2004, despite warning signs, including three additional ruptures reported to Honda

in 2007. In each of the incidents, Honda settled confidential financial claims with

the injured, but did not issue a safety recall until late 2008, and even then, for only a

small fraction (some 4,200) of its vehicles eventually found to be equipped with the

potentially explosive airbags.

103. Honda had filed standard reports on the initial air bag injury in 2004

and followed up with similar filings for the 2007 incidents, yet in none of the four

instances of ruptured airbags did Honda go beyond the standard form — which

requires automakers to list the component (i.e., the airbag) that was responsible for

an injury, but does not allow for elaboration about the circumstances (like a rupture)

— and separately alert safety regulators about the most critical detail: that the air

bags posed an explosion risk.

104. In late 2007, Takata engineers claimed that they had discovered the

potential source of the Defective Airbags: between late 2001 and late 2002, workers

at a Takata plant in Monclova, Mexico, had left moisture-sensitive explosives out

on the plant floor, which made them prone to combustion. Takata shared the results

of its inflator survey analysis with Honda in November 2008, which indicated an

airbag inflator issue. This triggered a Honda recall, but for only about 4,200 of its


29

vehicles. This recall took place four years after the first airbag explosion in a Honda

vehicle.

105. In April 2009 the airbag of Jennifer Griffin’s 2005 Honda Civic

exploded after a minor traffic accident in Orlando, Florida. State troopers

investigating the incident were baffled by the fact that such a minor accident could

cause a 2-inch piece of metal shrapnel to tear through Ms. Griffin’s neck. Although

Ms. Griffin somehow survived this explosion, she sustained devastating injuries.

106. In May 2009, 18 year old Ashley Parham was killed in Midwest City,

Oklahoma, when the airbag in her 2001 Honda Accord exploded out of her steering

wheel in a minor crash.

107. In December 2009, Gurgit Rathore collided with a mail truck in

Richmond, Virginia in her Honda Accord. The airbag exploded, propelling shrapnel

into her neck and chest. The injuries caused by the shrapnel caused her to bleed to

death in front of her three children.

108. In April 2010, Kristy Williams stopped at a red light in Georgia. Her

airbags spontaneously deployed, and the inflator canister exploded, sending metal

shards through the airbag. The shards punctured her neck and carotid artery, causing

extreme bleeding, strokes, and seizures.

109. In or about September 2011, a driver in Puerto Rico was injured when

his Honda Civic was involved in an accident and the defective Takata airbags


30

exploded, sending “sharp pieces of metal” into his body and causing extensive

injuries.

110. Takata provided another report to Honda in June 2009 concerning

its 2008 analysis, stating that issues related to propellant production appeared to

have been responsible for the improper inflator performance. Honda would

receive two more claims of “unusual deployments,” including Ms. Parham’s May

2009 accident and death described above, and another in June 2009. Takata

engineers claimed that the defect was linked to Takata’s factory in Moses Lake,

Washington: between 2000 and 2002, a defect in a machine that pressed air bag

explosives into wafers had made the explosives unstable. Honda then recalled

approximately 510,000 Honda and Acura vehicles. Again, Honda failed to mention

the injuries and deaths it was aware of at the time.

111. In total, the Vehicle Manufacturers have blamed Takata’s Defective

Airbags for at least 139 injuries.

112. Subsequent to these incidents, Defendants failed to issue a sufficient

recall or announcement to inform owners of the Class Vehicles that their vehicles

contained Defective Airbags that were prone to rupture and expulsion of metal

fragments and shrapnel. Rather, Defendants conducted various internal

investigations and secret testing that did not result in sufficient recalls or

announcements to the public over a decade later.


31

113. In February 2010, Honda ordered a recall of an additional 438,000

Honda and Acura vehicles. Honda did not mention past injuries and/or deaths that

sparked the recalls.

114. Honda issued subsequent recalls in April and December 2011, April

2013, and August 2014. The total number of recalled Honda vehicles with Takata’s

Defective Airbags now exceeds six million.

115. Yet, Defendants have continued to attempt to limit the recalls to certain

consumer states, and as of this date, have refused to issue the broad-based recall that

is critical to protect occupants of the Class Vehicles.

116. This pattern of incomplete disclosure resulted in the NHTSA issuing a

special order on November 3, 2014, directing Honda to fully explain its failure to

fully report deaths and injuries related to possible auto safety defects, as is required

by the Transportation Recall Enhancement, Accountability and Documentation Act

(“TREAD Act”).

117. On November 24, 2014, Honda disclosed to the NHTSA that it had

failed to report 1,729 deaths and injuries since 2003, including one death and seven

injuries caused by eight Takata airbag inflator ruptures.

118. The other Vehicle Manufacturers who sold Class Vehicles containing

the Defective Airbags were misled by Takata’s concealment of the true nature of the

Defective Airbags.


32

119. In March 2010, BMW wrote a letter to Takata seeking assurances with

respect to why Takata believed its BMW vehicles were not affected by the airbag

explosion risks in Honda vehicles. Takata responded that BMW’s airbags were

manufactured on a different production schedule and were therefore unaffected. In

2014, however, Takata reversed its position and informed BMW that its airbags

suffered from the same defect as those installed in Honda vehicles. BMW has since

recalled over 1.8 million vehicles.

120. Ford and Nissan did not even write to Takata to inquire about the

defects in the Honda Defective Airbags. Notwithstanding the potentially deadly

consequences of the Defective Airbags, and the substantial possibility that the

Takata airbags installed in their automobiles were equally defective, Ford and

Nissan made no efforts to determine whether the Takata airbags installed in their

vehicles suffered the same defects as the Honda Defective Airbags.

121. The other Vehicle Manufacturers have followed BMW with belated

recalls of their vehicles that contain Takata’s Defective Airbags.

122. Over the last decade-plus, Takata was in frequent communication with

the NHTSA. Takata concealed the true facts known to it regarding its Defective

Airbags, and provided NHTSA with materially misleading and/or incorrect

information.


33

123. On November 20, 2009, the NHTSA requested information from

Takata as part of its investigation into the scope and causes of the airbag injuries.

Takata’s responses, a partial response issued on December 23, 2009, and a full

response on February 19, 2010, provided the NHTSA with materially misleading

information and concealed the degree and widespread nature of the Defective

Airbags.

124. For example, Takata’s February 19, 2010 response claimed, inter alia,

that the Defective Airbags were limited to specific production dates. Takata also

claimed that it had not provided any Defective Airbags that were the same or similar

to the airbags subject to Honda’s recalls. Takata also stated that the number of

vehicles with Defective Airbags was small. These statements were all false.

125. Takata admitted it did not have the dates on which the inflators were

shipped (it concededly kept flawed records), and instead gave the manufacturing

dates.3 In both its responses, Takata stated it did not provide to anyone other

than Honda the type of airbag inflators associated with the recalls in 2008 and

2009, claiming the “inflator housing” used in the Honda vehicles was unique to

Honda. This was also untrue.

3 Takata’s factory workers kept important records in unreliable, non-

standardized ways, which were often handwritten, making it nearly impossible to

identify which airbag production batches contained defective parts. This prevented

Takata from identifying the shipment dates for the Defective Airbags when

requested by NHTSA in December 2009.


34

126. Honda and Takata represented to NHTSA and to the consuming public

that the total number of affected vehicles was relatively small, but by 2010 — only

months after the last recall — Honda announced a third recall for an additional

379,000 vehicles. Honda would have another recall in 2011, and by 2013 it became

apparent that the defective airbag issue was of far greater magnitude than disclosed

by Honda or Takata in their initial NHTSA reports.

127. In April 2013, Takata filed a report that identified the Defective

Airbags: certain airbag inflators installed in frontal passenger-side airbag modules

equipped with propellant wafers manufactured at Takata’s Moses Lake, Washington

plant during the period from April 13, 2000 through September 11, 2002, and certain

airbag inflators manufactured at Takata’s Monclova, Mexico plant during the period

from October 4, 2001 to October 31, 2002.

128. Based on these and other admissions, six major automakers, including

Defendants Nissan, BMW, and Mazda, issued recalls affecting over 3.5 million

motor vehicles containing Takata’s Defective Airbags.

129. Takata’s acknowledgement of the greater problem led other

automakers to issue recalls, and, in October 2014, NHTSA issued a revised list of

vehicles affected by recall.

130. Through the present, over 14 years after manufacture of the Defective

Airbags began, Takata has failed to accurately disclose the precise cause of the


35

airbag explosions and the actual number of Defective Airbags Takata produced.

Furthermore, Takata has identified inflators that were improperly welded or sealed

because of mistakes by workers at the Monclova, Mexico plant or because Takata

had been using the wrong type of steel tube. Takata’s Monclova plant has

experienced a defect rate that was six to eight times above the acceptable range.

131. Approximately 16 million motor vehicles have been recalled

worldwide as a result of Takata’s Defective Airbags, and it is likely that many more

vehicles will also be recalled.

132. On November 6, 2014, the New York Times reported that, according to

two former employees, one of whom was a senior member of its testing lab (the

“former employees”), Takata secretly conducted tests in 2004 on at least 50 of its

airbags retrieved from scrapyards. These tests were initiated as a reaction to the

ruptured airbag that spewed metal debris into the driver in the Alabama accident

described above, and the secret tests were conducted after normal work hours and

on weekends and holidays at Takata’s American headquarters in Auburn Hills,

Michigan.

133. While Takata and Honda had declined to disclose details of the initial

Alabama accident, which ended in a confidential settlement with the driver, the

former employees said that Takata was determined to know more. Tests on the 50

airbags were supervised by Al Bernat, Takata’s then-vice president for engineering,


36

and were unknown to all but a small group of people, including lab technicians,

fabricators, and engineers.

134. The former employees said that the steel inflators in two of the airbags

cracked during the tests, which can lead to rupture. This result was so alarming that

engineers began designing possible fixes in preparation for a recall.

135. Rather than alerting federal safety regulators of this possible danger,

Takata executives discounted the results of these tests and ordered the lab

technicians to delete the testing data from their computers and dispose of the airbag

inflators in the trash.

136. The former employees, who between them had four decades of

experience at the Company, said they are now speaking up because of concerns that

their former employer is not being forthright about the Defective Airbags. One of

the former employees said, “All the testing was hush-hush,” and “one day, it was,

‘Pack it all up, shut the whole thing down,’” which was “not standard procedure.”

137. Engineers had theorized that the problem was due to the welding of the

inflators’ canisters (intended to hold the airbag’s explosives), making its structure

vulnerable to splitting and rupturing. The engineers accordingly designed prototypes

for possible fixes, including a second canister to strengthen the unit.

138. But after three months, the testing was ordered halted. Laboratory

employees were instructed that all data, including video and computer backups, must


37

be destroyed. Inflators and prototypes of fixes were to be disassembled and disposed

of in a scrap-metal dumpster, and, while according to a former employee this “was

not considered surprising given the secret nature of the testing,” no one at Takata

offered an explanation.

139. Takata was eminently concerned with its profits, and a primary reason

it so cavalierly disregarded its own internal studies indicating the potentially lethal

nature of its airbags was, according to former managers, because Takata struggled to

keep up with the surge of demand for its airbags in the early and mid-2000s as it won

big new clients like General Motors.

140. The Vehicle Manufacturers began driving down costs using “just-in-

time” production, which requires parts to arrive at assembly plants only as they are

required, rather than having them stored as inventory. Takata was under pressure to

meet intense delivery schedules. The New York Times reported that workers “were

often told that if a client like Honda or Toyota was required to stop production at their

plants because of a late Takata shipment, the parts supplier would be fined tens of

thousands of dollars for every minute of lost production.”

141. Naturally, this created immense financial incentive for Takata never to

miss a shipment, and the focus on profits overcame the importance of human lives.

Indeed, a former Takata manager stated that he expressed concern and would ask,


38

“What if my daughter bought the car with the bad airbag?” and the plant would

respond, “Just ship it.”

142. The NHTSA, the United States Department of Justice, and the United

States Congress are all investigating Takata to determine whether, and to what

extent, Takata misled American governmental entities regarding the total number of

Defective Airbags.

143. Vehicle Manufacturers do not have adequate supplies to conduct the

extensive recall and replacement of Takata’s Defective Airbags.

144. As a result, many members of the Class have not received notice and

continue to drive their Class Vehicles, risking serious bodily injury or death in the

process. Dealerships have informed current owners and lessees that they may have

to wait months until replacement parts are available to remedy the Defective

Airbags.

145. Some of the Vehicle Manufacturers, like Toyota, have opted to place

decals that say “Do Not Sit Here” in affected vehicles, and have disabled the airbags

entirely as Toyota waits for replacement parts to come in.

146. In sum, Defendants either knew or should have known about the

widespread use of the Defective Airbags in the Class Vehicles. Yet, instead of

immediately and completely addressing this problem, Defendants: (a) publicly

denied the problems; (b) concealed secret testing results that would have revealed


39

the problems; (c) stated that the problems were limited to a small subset of the Class

Vehicles; (d) attempted to remedy the problems using a piecemeal approach, as

opposed to a comprehensive, global approach; (e) concealed information from

government regulators and the public; (f) directly and/or indirectly caused numerous

deaths and injuries to innocent people; and (g) caused Plaintiffs and the other

members of the Class substantial damages.

147. Plaintiffs and the members of the proposed Classes are faced with the

appalling choice of continuing to use their Class Vehicles with Defective Airbags—

a potentially lethal flaw—or not using their vehicles at all. Plaintiffs and the

members of the Classes were deceived and misled and seek damages, including

punitive damages, in addition to equitable and declaratory relief.

COUNT ONE

Violation of the Magnuson-Moss Warranty Act

15 U.S.C. §§2301, et seq.

(Brought on behalf of the Nationwide Class)

148. Plaintiffs incorporate by reference all of the allegations set forth above

as if fully set forth herein.

149. Plaintiffs bring this claim on behalf of members of the Nationwide

Class.

150. This Court has jurisdiction to decide claims brought under 15 U.S.C.

§2301 by virtue of 28 U.S.C. §1332 (a)-(d).


40

151. The Class Vehicles are “consumer products” within the meaning of

the Magnuson-Moss Warranty Act, 15 U.S.C. §2301(1).

152. Defendants are “supplier[s]” and “warrantor[s]” within the meaning

of the Magnuson-Moss Warranty Act, 15 U.S.C. §2301(4)-(5).

153. Plaintiffs and Class Members are “consumers” within the meaning of

the Magnuson-Moss Warranty Act, 15 U.S.C. §2301(3), because they are persons

entitled under applicable state law to enforce against the warrantor the obligations

of its express and implied warranties.

154. The Magnuson-Moss Warranty Act, 15 U.S.C. §2310(d)(1), provides

a claim for relief for any consumer who is damaged by the failure of a warrantor

to comply with a written or implied warranty.

155. In connection with the purchase or lease of their vehicles, Defendants

provided Plaintiffs and other members of the Nationwide Class with an implied

warranty of merchantability that is an “implied warranty” within the meaning of

the Magnuson-Moss Warranty Act, 15 U.S.C. §2301(7). As a part of the implied

warranty of merchantability, Defendants warranted that the Class Vehicles were

fit for their ordinary purpose as safe passenger motor vehicles, would pass without

objection in the trade as designed, manufactured and marketed, and were

adequately contained, packaged and labeled.


41

156. Defendants breached these implied warranties, as described in more

detail above, and are therefore liable to Plaintiffs and the Nationwide Class

pursuant to 15 U.S.C. §2310(d)(1). Without limitation, the Class Vehicles share

common design or manufacturing defects in that they are equipped with Defective

Airbags that can explode, leaving occupants of the Class Vehicles vulnerable to

serious injury and death. Defendants have admitted that the Class Vehicles are

defective by issuing recalls, but the recalls are woefully insufficient to address each

of the defects.

157. In their capacity as warrantors, Defendants had knowledge of the

inherent defects in the Class Vehicles. Any efforts to limit the implied warranties

in a manner that would exclude coverage of the Class Vehicles are

unconscionable, and any such effort to disclaim, or otherwise limit, liability for

the Class Vehicles is null and void.

158. The limitations on the warranties are procedurally unconscionable.

There was unequal bargaining power between Defendants and Plaintiffs and Class

Members as, at the time of purchase and lease, Plaintiffs and Class Members had

no other options for purchasing warranty coverage other than directly from

Defendants.

159. The limitations on the warranties are substantively unconscionable.

Defendants knew that the Class Vehicles were defective and would continue to


42

pose safety risks after the warranties purportedly expired. Defendants failed to

disclose these defects to Plaintiffs and Class Members. Thus, Defendants’

enforcement of the durational limitations on those warranties is harsh and shocks

the conscience.

160. Plaintiffs and each of the other Class Members have had sufficient

direct dealings with Defendants or their agents (dealerships) to establish privity

of contract. Nonetheless, privity is not required here because Plaintiffs and each

of the other Class Members are intended third-party beneficiaries of contracts

between Defendants and their dealers, and specifically, of the implied warranties.

The dealers were not intended to be the ultimate consumers of the Class Vehicles

and have no rights under the warranty agreements provided with the Class

Vehicles. Instead, the warranty agreements were designed for and intended to

benefit consumers. Finally, privity is also not required because the Class Vehicles

are dangerous instrumentalities because of the aforementioned defects and

nonconformities.

161. Pursuant to 15 U.S.C. §2310(e), Plaintiffs may bring this class action

and are not required to give Defendants notice and an opportunity to cure until

such time as the Court determines the representative capacity of Plaintiffs

pursuant to Fed. R. Civ. P. 23.


43

162. Furthermore, affording Defendants an opportunity to cure their

breach of written warranties would be unnecessary and futile here. At the time

of sale or lease of each Class Vehicle, Defendants knew, should have known, or

were reckless in not knowing of their misrepresentations concerning the Class

Vehicles’ inability to perform as warranted, but nonetheless failed to rectify the

situation and/or disclose the Defective Airbags and/or defective design. Under

the circumstances, the remedies available under any informal settlement

procedure would be inadequate, and any requirement that Plaintiffs resort to an

informal dispute resolution procedure, and/or one which affords Defendants a

reasonable opportunity to cure their breach of warranties, is excused and thereby

deemed satisfied.

163. Plaintiffs and other members of the Nationwide Class would suffer

economic hardship if they returned their Class Vehicles but did not receive the

return of all payments made by them. Because Defendants are refusing to

acknowledge any revocation of acceptance and to return immediately any

payments made, Plaintiffs and Class Members have not re-accepted their Class

Vehicles by retaining them.

164. Pursuant to 15 U.S.C. §2310(d)(3), the amount in controversy of

Plaintiffs’ individual claims meets or exceeds the sum of $25. The amount in

controversy of this action exceeds the sum of $50,000, exclusive of interest and


44

costs, computed on the basis of all claims to be determined in this lawsuit.

Plaintiffs, individually and on behalf of the other Class Members, seeks all

damages permitted by law, including diminution in value of their vehicles, in an

amount to be proven at trial.

165. In addition, pursuant to 15 U.S.C. §2310(d)(2), Plaintiffs and Class

Members are entitled to recover a sum equal to the aggregate amount of costs and

expenses (including attorneys’ fees based on actual time expended) determined by the

Court to have reasonably been incurred by Plaintiffs and Class Members in connection

with the commencement and prosecution of this action.

166. Further, Plaintiffs and Class Members are also entitled to equitable relief

under 15 U.S.C. §2310(d)(1). Based on Defendants’ continuing failures to fix the

known, dangerous defects, Plaintiffs seek a declaration that Defendants have not

adequately implemented their recall commitments and requirements and general

commitments to fix their failed processes, and that injunctive relief in the form of

judicial supervision over the recall process is warranted. Plaintiffs also seek the

establishment of a Defendants-funded program for Plaintiffs and Class Members to

recover out-of-pocket costs incurred.

167. Plaintiffs also request, as a form of equitable monetary relief, re-payment

of the out-of-pocket expenses and costs Plaintiffs have incurred in attempting to

rectify the Defective Airbags in Plaintiffs’ vehicles. Such expenses and losses will


45

continue as Plaintiffs and Class Members must take time off from work, pay for rental

cars or other transportation arrangements, child care, and the myriad expenses

involved in going through the recall process.

168. The right of Class Members to recover these expenses as an equitable

matter to put them in the place they would have been but for Defendants’ conduct

presents common questions of law. Equity and fairness requires the establishment by

Court decree, and administration under Court supervision, of a program funded by the

Defendants, using transparent, consistent, and reasonable protocols, under which such

claims can be made and paid.

COUNT TWO Fraudulent Concealment





Class.

171. Defendants concealed and/or suppressed material facts concerning the

safety of their vehicles. Defendants knew that the Class Vehicles were designed

and manufactured with airbag defects, but Defendants concealed those material

facts. Defendants recklessly manufactured and distributed the Class Vehicles to

consumers in the United States, even though Defendants knew, or should have


46

known, at the time of distribution, that the Class Vehicles contained material airbag

defects. Plaintiffs and Class Members had no knowledge of these defects at the

time they purchased or leased the Class Vehicles.

172. Defendants made material omissions and/or affirmative

misrepresentations regarding the safety of their vehicles.

173. Defendants each knew these representations were false when they

were made.

174. The Class Vehicles purchased or leased by Plaintiffs and Class

Members were, in fact, defective, unsafe, and unreliable, because the vehicles

contained dangerous airbag defects.

175. Defendants had a duty to disclose these safety issues to Plaintiffs,

Class Members, the public, and NHTSA, but failed to do so.

176. Defendants had a duty to disclose the true facts about the safety of the

Class Vehicles because Defendants had superior knowledge and access to those

facts, and the facts were not known to or reasonably discoverable by Plaintiffs and

Class Members. Defendants knew that Plaintiffs and Class Members had no

knowledge of the dangerous Defective Airbags in the Class Vehicles, and that

neither Plaintiffs nor the other Class Members had an equal opportunity to discover

the facts to inform them of those defects. Indeed, Plaintiffs and Class Members


47

trusted Defendants not to sell or lease them vehicles that were defective or that

violated federal laws governing motor vehicle safety.

177. Defendants had a duty to disclose that the Class Vehicles were

defective, unsafe, and unreliable in that they contained dangerous airbag defects,

because Plaintiffs and Class Members relied on Defendants’ representations that the

vehicles they were purchasing, leasing, and/or retaining were safe and free from

defects.

178. The aforementioned concealment was material, because if it had been

disclosed, Plaintiffs and Class Members would not have bought, leased, or retained

their vehicles.

179. The aforementioned representations were also material because they

were facts that would typically be relied on by a person purchasing, leasing or

retaining a new or used motor vehicle. Defendants each knew or recklessly

disregarded that their representations and/or statements on the safety of the Class

Vehicles were false.

180. By misrepresenting and/or failing to disclose these material facts,

Defendants intended to induce Plaintiffs and Class Members to purchase or lease the

Class Vehicles.

COUNT THREE Unjust Enrichment



48




Class.

183. Each of the Plaintiffs brings this Count for unjust enrichment on behalf

of herself and the Nationwide Class.

184. Although there are numerous permutations of the elements of the

unjust enrichment cause of action in the various states, there are few real

differences. In all states, the focus of an unjust enrichment claim is whether the

defendant was unjustly enriched. At the core of each state’s law are two

fundamental elements – the defendant received a benefit from the plaintiff and it

would be inequitable for the defendant to retain that benefit without compensating

the plaintiff. The focus of the inquiry is the same in each state.

185. Since there are no material conflicts relating to the elements of unjust

enrichment between the different jurisdictions from which Class Members will be

drawn, general unjust enrichment law principles apply to those claims.

186. Plaintiffs and Class Members conferred a benefit on Defendants by

purchasing the Class Vehicles.

187. Defendants have been unjustly enriched in retaining the revenues

derived from Plaintiffs’ and Class Members’ purchases and/or leases of the Class


49

Vehicles equipped with Defective Airbags, which retention under these

circumstances is unjust and inequitable because Defendants, particularly Takata,

actively concealed known defects in the Defective Airbags, despite their obligation

under applicable law and good conscience to disclose the existence of the defects

and to replace the Defective Airbags.

188. Because Defendants’ retention of the non-gratuitous benefit conferred

on them by Plaintiffs and the Nationwide Class is unjust and inequitable, Defendant

should be required by the Court to pay restitution to Plaintiffs and the Nationwide

Class.

189. Privity is not required. Nevertheless, Defendants are in privity with

Plaintiffs and members of the Class. Plaintiffs and Class Members were the

intended end users of the Defective Airbags.

COUNT FOUR Breach of Express Warranty

(Brought on behalf of the Alabama Subclass)



191. Plaintiffs bring this claim on behalf of members of the Alabama

Subclass.


50

192. As express warrantors, manufacturers and merchants, Defendants had

certain obligations under Alabama Code §7-2-313, to ensure that their automobiles, and,

in particular, the airbags installed in them, complied with the express warranties.

193. When Plaintiffs and the members of the Alabama Subclass purchased

and/or leased their vehicles equipped with Defective Airbags, Defendants expressly

warranted under their respective Limited Warranties that they would correct any defects,

at no charge to the customer, in the automobiles within the period of the warranty.

194. The defects at issue in this litigation were present at the time vehicles

equipped with the Defective Airbags were sold and leased to the Plaintiffs and members

of the Alabama Subclass.

195. Defendants breached their express warranties (and continue to breach these

express warranties) because they did not (and have not) corrected the defects in the

Defective Airbags.

196. Pursuant to their express warranties, Defendants were obligated to correct

the defects in the Defective Airbags in the vehicles owned or leased by Plaintiffs and the

Alabama Subclass Members.

197. Defendants and their agent dealers have failed and refused to conform the

Defective Airbags to the express warranties provided by the respective automobile

manufacturers.


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198. Plaintiffs and the members of the Alabama Subclass have performed each

and every duty required of them under the terms of the warranties, except as may have

been excused or prevented by the conduct of Defendants or by operation of law in light

of Defendants’ conduct as described throughout this Complaint.

199. Defendants received timely notice regarding the problems at issue in this

litigation and, notwithstanding such notice, Defendants have failed to provide an

effective remedy. Although Defendants have issued recalls for affected vehicles, there

is an inadequate supply of replacement airbags to replace all of the Defective Airbags in

a timely manner. As a result, affected vehicles will either never be repaired or will be

without a crucial safety device for a considerable period of time.

200. Plaintiffs and the Alabama Subclass Members have suffered damages

caused by Defendants’ breach of its express warranties and are entitled to recover

damages, including but not limited to, diminution of value.

COUNT FIVE Breach of the Implied Warranty of Merchantability

(Brought on behalf of the Alabama Subclass)



202. Plaintiffs bring this claim on behalf of members of the Alabama

Subclass.


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203. Defendants are, and were at all relevant times, merchants with respect

to the vehicles equipped with Defective Airbags under Alabama Code §7-2-104(1).

204. A warranty that the Defective Airbags were of merchantable quality

and condition is implied by law pursuant to Alabama Code §7-2-314.

205. Defendants impliedly warranted that the Defective Airbags were of

good and merchantable condition and quality – fit and safe for their ordinary,

intended and foreseeable use.

206. In fact, the Defective Airbags would not pass without objection in the

trade because they were a safety device which, rather than protecting the occupant

of an automobile in the event of a crash, shot deadly shrapnel at the persons they

were designed to protect. The defect in the Defective Airbags was exacerbated by

operating vehicles with the Defective Airbags in a humid environment, like

Alabama.

207. By virtue of the conduct described herein, Defendants breached the

implied warranty of merchantability.

208. Plaintiffs and the Alabama Subclass members have been damaged as a

direct and proximate result of Defendants’ breach of the implied warranty.

209. Plaintiffs and the Alabama Subclass Members have performed each and

every duty required of them under the terms of the warranties, except as may have


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been excused or prevented by the conduct of Defendants or by operation of law in

light of Defendants’ unconscionable conduct.

210. Plaintiffs and the members of the Alabama Subclass have had sufficient

dealings with either Defendants or their authorized dealers to establish privity of

contract. Notwithstanding this, privity is not required in this case because Plaintiffs

and the Subclass Members are intended third-party beneficiaries of contracts

between Defendants and their dealers; specifically, they are intended beneficiaries

of Defendants’ implied warranties. The dealers were not intended to be the ultimate

consumers of the automobiles with Defective Airbags. The warranty agreements

were designed for and intended to benefit the ultimate consumers only.

211. Defendants received timely notice regarding the problems at issue in

this litigation and, notwithstanding such notice, Defendants have failed to offer an

effective remedy.

212. As a direct and proximate result of Defendants’ breach of warranties,

Plaintiffs and the Alabama Subclass Members were caused to suffer economic

damage, including loss attributable to the diminished value of their vehicles

equipped with Defective Airbags.

PRAYER FOR RELIEF

WHEREFORE, Plaintiffs, individually and on behalf of all others similarly

situated, demand judgment against the Defendants, as follows:


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A. For an order certifying the proposed Nationwide Class and Alabama

Subclass, designating Plaintiffs as the named representatives of the Nationwide

Class and of the Alabama Subclass, and designating the undersigned as Class

Counsel;

B. For a declaration that the Defective Airbags in Class Vehicles are

defective;

C. For a declaration that the Defendants are financially responsible for

notifying all Class Members about the defective nature of the Class Vehicles;

D. For an order enjoining Defendants to desist from further deceptive

distribution, sales, and lease practices with respect to the Class Vehicles, and directing

Defendants to permanently, expeditiously, and completely repair the Class Vehicles to

eliminate the Defective Airbags;

E. For an award to Plaintiffs and Class Members of compensatory,

exemplary, and statutory penalties and damages, including interest, in an amount to

be proven at trial;

F. For the establishment of a Defendants-funded program, using

transparent, consistent, and reasonable protocols, under which out-of-pocket

expenses and damages claims associated with the Defective Airbags in Plaintiffs’ and

Class Members’ Vehicles, can be made and paid, such that Defendants, not the Class


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Members, absorb the losses and expenses fairly traceable to the recall of the vehicles

and correction of the Defective Airbags;

G. For a declaration that the Defendants must disgorge, for the benefit of

Plaintiffs and Class Members, all or part of the ill-gotten profits received from the

sale or lease of the Class Vehicles, or make full restitution to Plaintiffs and Class

Members;

H. For an award of attorneys’ fees and costs, as allowed by law;

I. For an award of pre-judgment and post-judgment interest, as provided

by law; and

J For such other relief as the Court may deem just and proper.

JURY DEMAND

Plaintiffs hereby demand a trial by jury as to all issues so triable.

Dated: December 16, 2014 By: /s/ Richard S. Frankowski

The Frankowski Firm, LLC

231 22nd Street South, Suite 203

Birmingham, AL 35233

Tel.: (205) 390-0399

Fax: (205) 390-1001

Email: [email protected]

SCOTT+SCOTT,

ATTORNEYS AT LAW, LLP

Joseph P. Guglielmo

Joseph D. Cohen

The Chrysler Building

405 Lexington Avenue, 40th Floor

New York, NY 10174

Tel.: (212) 223-6444


56

Fax: (212) 223-6334


[email protected]

SCOTT+SCOTT,

ATTORNEYS AT LAW, LLP

David R. Scott

Stephen J. Teti

156 South Main Street

P.O. Box 192

Colchester, CT 06415

Tel.: (860) 537-5537

Fax: (860) 537-4432


[email protected]

Counsel for Plaintiffs


Documents

Case 2:14-cv-02407-SLB Document 1 Filed 12/16/14 Page 1 of 57 … · Airbags. Takata will also soon face questioning from the United States Senate Committee on Commerce. 11. Takata’s