Verdict - Spring 2018 - 35

Jennifer Griffin with blood gushing from a gash

and families and a $25 million criminal fine.

types of losses, including economic losses,

in her neck, they were baffled by the extent

A month later, Takata paid the $125 million to

caused by the malfunctioning airbag. The

of her injuries. They thought she had been

the Individual Restitution Fund (IRF), which

Special Master, Professor Eric D. Green, who

stabbed. Instead, her injuries were the result

was established through a Restitution Order

was appointed by the federal court oversee-

of the exploding Takata airbag in her Honda

from the federal court handling the criminal

ing Takata's criminal case, will administer the

Civic. The bomb-like explosion sent a two-inch

case. The fund was created to compensate

IRF and announce additional eligibility criteria

piece of shrapnel flying into Griffin's neck. In

those who have suffered, or will suffer in the

after it is approved by the federal court. The

another case, Angelina Sujata was driving her

future, a personal injury or wrongful death

Special Master is also developing a formula for

2001 Honda Civic in 2012 at about 25 miles per

caused by a malfunctioning Takata airbag

allocating funds to those eligible, and will make

hour near Columbia, South Carolina, when the

inflator and who have not already resolved

recommendations to the court on distributions

vehicle in front of her slammed on the brakes.

their claims against the company.7

to eligible claimants.

The next thing Sujata remembered was a sharp

However, within four months of creating the

pain in her chest, which was sliced open to the

IRF, Takata filed for bankruptcy and Chapter

TAKATA AIRBAG TORT

bone. Victims of the exploding airbags have

11 protection, leaving many plaintiffs to fear

COMPENSATION TRUST FUND

also been left with fractured facial and upper

the promised compensation would be dimin-

The Trust Fund is separate from the IRF but,

torso bones, partially or completely blinded

ished or eliminated entirely. So, to protect the

again, will complement the IRF's role in com-

and even killed.

failed manufacturer's dwindling assets and

pensating Takata airbag victims. The IRF was

I have represented dozens of individuals

hold it accountable, lawyers representing TK

created by a Channeling Injunction entered

who lost their vocal cords, eyesight, received

Holdings, Inc., (Takata's U.S. division) and a

by the bankruptcy court that will channel all

horrible laceration injuries to their face, neck,

number of plaintiff groups reached agreement

claims into the fund that are made against a

arms and massive burn injuries. Most recently,

on a Bankruptcy Plan of Reorganization (Plan)

participating OEM. All OEMs have the right to

I filed a case involving a Ford vehicle where my

in February 2018, which centered on the $1.6

join in the fund, but as of the date of writing this

client has a golf ball sized hole in his chest from

billion sale of Takata's remaining assets to

paper, only Honda has entered the Fund. It, too,

shrapnel thrown out of the airbag. Each case

Key Safety Systems, Inc.

will compensate personal injury and wrong-

8

ful death claims resulting from Takata airbag

is a tragedy not only because of the individual
stories of pain and disfigurement it causes,

BANKRUPTCY PLAN OF

malfunctions, as well as personal injury and

but because deep down, we know that Takata

REORGANIZATION PROTECTS

wrongful death cases that result from a mal-

and the car companies knew long before these

CLAIMS AGAINST TAKATA

function of other Takata products. Professor

injuries occurred the deadly problems with
this airbag.

The Plan includes two resolutions and

Green has also been appointed as the Trustee

was approved by Judge Brendan Shannon of

for the Trust Fund. The Trust Fund will remain

the U.S. Bankruptcy Court for the District of

under the Bankruptcy Court's jurisdiction. It is

Delaware. It creates the Takata Airbag Tort

expected to be funded and operational by mid-

Since the recall was initiated, consumers

Compensation Trust Fund (Trust Fund) and

April 2018 and should able to receive claims by

have sought justice in several ways, including:

the Original Equipment Manufacturer (OEM)

May 2018. After the Trust Fund is operational,

individual personal injury or wrongful death

Channeling Injunction - two additional avenues

Takata airbag claimants will be able to file a

lawsuits; class action lawsuits to recover the

for those seeking reparation from the failed

single claim for both the Trust Fund and the

economic losses; and through a multidistrict

Takata company. The Trust Fund will work

IRF. Takata airbag claimants may be eligible

litigation (MDL).

together with the IRF to pay out compensa-

to recover from one or both funds.

HOLDING TAKATA ACCOUNTABLE

The U.S Department of Justice (DOJ) also

tion to those eligible, while the OEM Channeling

Those seeking justice through the Trust Fund

launched a criminal case against the company

Injunction provides assurance to future victims

for claims related to malfunctioning Takata

and indicted three of its executives for falsi-

that their claims will be protected.

airbags will receive compensation based on

fying documents. The criminal case, U.S. v.

©ISTOCK.COM/ZORAZHUANG

Takata Corporation, Case No. 16-cr-20810 (E.D.

the severity of the injury. The amount will range
INDIVIDUAL RESTITUTION FUND

from $10,000 for bruising to $5 million for death

Mich.), was filed in the U.S. District Court for

Under the IRF, injured individuals or families

or loss of eyesight. The injuries are stackable,

the Eastern District of Michigan. In February

of those killed may collect regardless of which

so a claimant would be compensated based on

2017, to end the criminal case, Takata pleaded

company manufactured the vehicle they were

each injury, excluding death - which would be

guilty to fraud because of its attempts to

in at the time of their injury or death. Injuries

paid only once.

cover up data showing the lethal nature of

may include lacerations; eye injuries (vision

its products, as well as falsifying documents

damage or loss of vision); burns; fractures to

ORIGINAL EQUIPMENT

in order to make the airbags appear safe. The

the skull, face or neck; traumatic brain injury;

MANUFACTURER

fraud charge was accompanied by $1 billion

Larynx or vocal cord injury; vascular complica-

CHANNELING INJUNCTION

in penalties, including $850 million in restitu-

tions related to laceration; nerve damage and

The OEMs that installed defective airbags

tion to automakers, $125 million for victims

hearing injury. The IRF does not cover other

in the vehicles they manufactured may also
Spring 2018 35
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