U.S. Judge Denies Honda & Takata’s Request to Dismiss Racketeering Claims

Honda and Takata wanted to throw out a class-action lawsuit. Though they have already agreed to settlements in six of eight deaths linked to defective Takata air bags, they wanted to end this particular case that claims owners of vehicles with Takata air bags overpaid for those vehicles, and that the value has been reduced because of the air bag recalls.

The companies filed a motion to toss out the class action, which represents millions of vehicle owners, but U.S. District Judge Federico Moreno denied the request. According to Daily Business Review, plaintiffs can now move forward taking depositions to support their claims.

Plaintiffs Accuse Honda and Takata of Federal Racketeering

A total of 107 consumers and four auto recyclers are plaintiffs in this class action lawsuit, which is proceeding in the current Takata MDL in the Southern District of Florida. They all claim that the presence of defective air bags in their vehicles reduces the value of those vehicles, and that had they known about the dangers, they never would have bought the vehicles.

Takata air bags have been under investigation for about a year now, because of their potential to explode upon deployment, sending shrapnel into the interior of the vehicle. The air bags have been linked with 8 deaths and over 100 injuries so far.

The plaintiffs in this case also claim that both Honda and Takata knew about the potential safety dangers, yet continued to hide information and mislead regulators about the risks. Judge Moreno accepted that the plaintiffs had established plausible claims for violations of the Racketeer Influenced and Corrupt Organizations Act and the Magnuson-Moss Warranty Act. Should the plaintiffs prove successful in this case, they could win big, as the law allows triple damages for racketeering claims.

According to Reuters, Honda stated that it looks forward to “the opportunity to properly challenge plaintiffs’ claims,” and that the company is confident the racketeering claim will eventually be dismissed. At the time, Takata had made no statement on the ruling.

Takata’s Actions Harms Scores of Consumers

Takata lawsuits claiming economic losses are being heard separately from those claiming personal injury. Air bag recalls affect over 34 million vehicles in the U.S. so far, and that number may continue to increase as the National Highway Traffic Safety Administration (NHTSA) continues its investigation into the matter.

In November 2015, the administration fined Takata a record $200 million—$70 million to be paid immediately, and $130 to be paid if Takata doesn’t meet the conditions the company set up for how the recalls will proceed, and for safety improvements within the company itself.

“For years, Takata has built and sold defective products,” said Anthony Fox, Department of Transportation secretary, “refused to acknowledge the defect, and failed to provide full information to 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.”

Takata has admitted it was aware of the defect and failed to issue a timely recall.