Honda settles airbag probe with 48 attorneys general

The attorneys general of 48 states and territories and Honda of America have reached an $85 million settlement over allegations the company concealed safety issues and defects in the frontal airbag systems installed in certain Honda and Acura vehicles sold in the United States.

The systems were designed and manufactured by longtime Honda supplier Takata Corp. and were first installed during the 2001 model year. The settlement concludes a multistate investigation into Honda’s alleged failure to inform regulators and consumers that the frontal airbags posed a significant risk of rupture, which could cause metal fragments to fly into the passenger compartments of vehicles.

The ruptures have resulted in at least 14 deaths and more than 200 injuries in the United States.

“Companies have a duty to consumers to disclose dangerous safety issues with their products as soon as they become known,” Nevada Attorney General Aaron Ford said. “My office will hold companies that fail to do so accountable for their dangerous action, or inaction.”

The states have alleged that Honda engineers suspected that the airbags’ propellant, ammonium nitrate, could burn aggressively and cause the inflator to burst. Despite these concerns, Honda delayed warning consumers or automobile safety officials, even as it began partial recalls of affected vehicles in 2008 and 2009. Furthermore, Honda continued to represent to consumers that its vehicles, including its airbags, were safe.

Since 2008, Honda has recalled approximately 12.9 million Honda and Acura vehicles equipped with the suspect inflators.

The states have alleged that Honda’s actions, or its failures to act, as well as its misrepresentations about the safety of its vehicles, were deceptive and that Honda’s conduct violated state consumer protection laws, including Nevada Deceptive Trade Practices Act.

Under the terms of the consent judgment, Honda has agreed to strong injunctive relief which, among other things, require it to take steps to ensure that future airbag designs include “fail-safe” features to protect passengers in the event the inflator ruptures and adopt changes to its procurement process for new frontal airbags to ensure that its suppliers have the appropriate industry certifications and satisfy key industry performance standards, as well as improve record-keeping and parts tracking.

The company also has agreed to implement recurrence prevention procedures designed to prevent a tragedy like this from happening again, such as requiring that Honda approve all new frontal airbag designs before the company will consider them for use in new Honda vehicles, and to abide by prohibitions on misleading advertisements and point-of-sale representations regarding the safety of Honda’s vehicles, including the airbags.

Improvements will be made in critical areas such as risk management, quality control, supplier oversight, training and certifications and implementing mandatory whistleblower protections, according to the settlement.

Honda also agreed to pay the participating attorneys general a total of $85,151,210.15, of which Nevada’s share is $1,238,738.80.

In addition to Nevada, the multistate group – led by South Carolina, Arkansas, Connecticut, District of Columbia, Florida, Georgia, Maryland, New Jersey, Oregon, South Dakota and Texas – includes Alabama, Alaska, Colorado, Delaware, Guam, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New York, North Carolina, North Dakota, Northern Mariana Islands, Ohio, Pennsylvania, Rhode Island, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.