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Auto Recyclers File Class Action Lawsuit Against Takata and Automakers

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On February 10, 2015, the Automotive Recyclers Association (ARA) announced they had filed a class action lawsuit against Takata Corporation, its subsidiaries, and a number of automakers. They stated in a press release that they filed the case on behalf of “all persons and entities who operate professional automotive recycling facilities in the United States who have purchased for resale any of the vehicles containing undeployed and allegedly defective airbags manufactured by Takata.”

The lawsuit was filed in the Southern District of Florida, the location of the current Takata air bag MDL.

ARA States Takata Misled Recyclers About Value of Air Bags

The ARA is an international trade association dedicated to the “efficient removal and reuse of automotive parts,” according to their website, and “the safe disposal of inoperable motor vehicles.” It serves the automotive recycling industry in 12 countries, and operates through direct membership and affiliated chapters.

The Alliance of Automobile Manufacturers states that automotive recycling is the 16th largest industry in the U.S., with about 7,000 operations around the country. “Recycling autos provides enough steel to produce almost 13 million new automobiles, while generating jobs for 46,000 people.” They add that the automobile is the most recycled consumer product in the world today, with 95 percent of retired vehicles processed for recycling each year.

Part of the recycling process is removing reusable parts from the vehicles for use in other vehicles, or removing parts for remanufacturing or rebuilding. Automotive recyclers, for instance, can retrieve never-deployed air bags and sell them as replacement parts to collision repair shops. The ARA conducted tests on such airbags in the late 1990s, and showed them to operate within performance specifications.

According to their complaint, the ARA states that Takata knew about the alleged defects causing some of their air bags to explode and injure or kill vehicle occupants, yet withheld this information from the public and from the ARA. As a result, many recyclers overpaid for what are now considered to be worthless air bags, since they cannot be used as replacement parts.

Class Action Lawsuit Joins Takata MDL

The ARA goes on to state in their complaint that they expected Takata would disclose “in a timely manner” the defects associated with their air bags, so that recyclers would have had the option not to purchase vehicles containing them for more than they were worth. As it is, recyclers were unaware until the information came out last year (2014), leaving them with thousands of air bags they can’t sell.

This class action lawsuit joins five others that were already pending and had been transferred to the Southern District of Florida via the February 5, 2015 order of the U.S. Judicial Panel on Multidistrict Litigation (JPML). At least 65 other individual Takata air bag lawsuits pending around the country are also expected to join the MDL.