Volkswagen has agreed to pay $42 million to settle consumer lawsuits over the use of defective Takata Corp. air bag inflators in its vehicles, according to a Wednesday filing in a Miami federal court.
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The proposed settlement with Volkswagen Group of America Inc., Audi of America LLC and other affiliates covers 1.35 million vehicles and is modeled on settlements previously approved with seven other global automakers in the expansive multidistrict litigation.
“We are pleased that after three years of hard-fought litigation we have reached a settlement with Volkswagen that will bring significant monetary and other relief to more than a million class members,” plaintiffs’ lead counsel Peter Prieto of Podhurst Orseck PA said in a statement. “This agreement will not only expand awareness of the Takata recalls and improve driver safety by accelerating the removal of defective airbags from our roads but will provide compensation to affected VW and Audi consumers.”
Volkswagen will pay $33.6 million in cash into a nonreversionary common fund over a four-year period, with the remaining 20% of the total coming in the form of its funding an “enhanced rental car program.”
A portion of the funds will go toward an outreach program expanding upon the existing efforts related to increasing recall completion rates among the hundreds of thousands of class members still exposed to the faulty inflators.
Because none of the funds will return to Volkswagen, class members can also apply to receive residual payments of up to $250 from funds remaining at the end of each program year. Class members will be eligible to receive up to $500 in residual payments over the four-year settlement term.
Volkswagen will also provide free rental or loaner vehicles to class members who request one while awaiting repair of their recalled vehicles, and has also extended coverage for repairs and adjustments of current and replacement inflators, including parts and labor.
Takata’s air bag inflators have been linked to at least 11 deaths in the U.S., and the company has faced massive global recalls.
Takata filed for bankruptcy a few shorts months after pleading guilty to wire fraud in January 2017. It acknowledged that it ran a scheme to use false reports and other purposeful misrepresentations to convince automakers to buy air bag systems that contained defective inflators and agreed to pay $1 billion in fines and restitution.
Ford became the seventh automaker to reach a settlement in the MDL in September 2018, agreeing to pay $300 million. Honda agreed to a $605 million deal in September 2017, Nissan settled for $98 million in August 2017, and Toyota, Subaru, Mazda and BMW agreed to pay a combined $553.6 million in May 2017.
The claims against Volkswagen, Mercedes-Benz, GM and Stellantis, were filed in 2018.
“We’re just going to continue to fight for our class members until we get the cases resolved or tried,” Prieto said.
Read more articles from Haute Lawyer, visit https://hauteliving.com/hautelawyer
Source: https://www.law360.com/articles/1418128
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