State of Hawaii v. Takata Corporation Complaint

8/17/2019 State of Hawaii v. Takata Corporation Complaint

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F I R S T

CikCull

C O U R T

S T T E O F H W I I

F I L E D

2 1 6 M A Y 1 3 1 1 :3 1

A

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MELINA D SANCHEZ 6613

Enforcement A ttorney

S T A T E O F H A W A I 'I O F F I C E

O F C O N S U M ER P R O T E C T I O N

235 South Beretania Street, Room 801

Honolulu, H awai'i96813-2419

T elephone: (808) 586-2636

Of Counsel:

C R ON IN , FR I F , D , SEKIYA,

K E K I N A F A I R B A N K S

L . R I C H A R D F R I I H D , J R . 0 76 4 -0

P A T R I C K F . M c T E R N A N 4 26 9-0

600 D avies Pacific C enter

841 Bishop S treet

Honolulu, Hawaii96813

T elephone: (808) 524-1433

L I N D A S I N G ER

Pro Hac Vice Pending)

A N T H O N Y R . J U Z AI T I S

Pro Hac Vice Pending)

C O H E N M I L S T E I N

S E L LE R S T O L L P LL C

1100 New York Avenue, NW

S uite 500 East

Washington, DC20005

T elephone: (202) 408-4600

Attorneys for Plaintiff

I N T HE C IR C U I T C O U R T O F T H E F I R S T C I R C U I T

S T A T E O F H A W A I I

S T AT E O F H AW AI I , b y its O f f ice of C ons um er

Protection,

Plaintiff,

VS

T A K A T A C O R P O R A T I O N ; T K H O L D IN G S ,

I N C .; H O N D A M O T O R C O . , LT D . ;

A M E R I C A N H O N D A M O T O R C O . , I N C .;

H O N D A O F A M E R I C A M A N U F A C T U R I N G ,

C I V I L N O .

16 1 0922 05

(Other Civil Action)

C O M P L AI N T ; S U M M O N S T O

A N S W E R C I V I L C O M P LA I N T

H

do hereby certify that this is a full, true,

art

correct copy of the ongnal on file in this

office.

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Clerk, Circuit Court,

F i r s l i r c u s


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INC., and DOE DEPEN DA NTS 1-100,

Defendants.

No trial date has been set.

C O M P L A IN T

Plaintiff STA TE OF HA W AII, by its Office of Con sumer Protection (hereinafter State

or Plaintiff '), for cause of action against the above-nam ed Defend ants, alleges and avers upon

information and belief as follows:

JURISDICTION AN D VENUE

1

The O ffice of Consumer Protection is a division of the State of Haw ai'i

Department of Com merce and C onsum er Affairs that is charged with the enforcement of

Haw ai'i 's consum er protection laws, including those statutes prohibiting unfair or deceptive acts

or practices in the cond uct of any trade or com merce.

2

In its enforcement of the aforementioned laws, the Office of Con sumer Protection

is authorized by law to bring this suit in the nam e of the State of H awaii.

3

This action is brought by the Office of Consum er Protection pursuant to Chap ters

480 and 487, Haw ai'i Revised Statutes ( H RS ), and other applicable Hawai' i law, seeking

declaratory and injunctive relief, restitution, disgorgement, non-compensatory civil penalties,

and other and additional relief against the above -named D efendants, as warranted.

4

This Court has jurisdiction over this case pursuant to HRS §§ 480 -21 and 603 -

21.5. This Court is also the appropriate venue for this action pursuant to HRS § 4 80-21 bec ause

the seat of government of the State of Hawai'i, the plaintiff in this action, is situated within the

City and Co unty of Hono lulu, State of Haw aii.

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5

This Court has jurisdiction over the above-nam ed Defend ants pursuant to HR S §

634-35, which ex tends this Court 's

in personam

jurisdiction o ver foreign defendan ts to the

fullest extent permitted by the U nited States Constitution, because, amon g other things,

Defend ants placed the products which are the subject of this action into the stream of com merce

with the knowledg e and intent that their products wou ld be widely disseminated throughout the

United States, including the State of Haw aii, and that the adve rse effects of the unsafe co ndition

of their products wou ld likely be felt in the State of H awai' i , and/or Defendants otherwise

directed their activities toward the S tate of Haw ai'i and/or otherwise availed them selves of the

benefits and protections of the laws o f the State of H awai' i .

NO FEDERAL REMO VAL JURISDICTION

6

The S tate of Hawaii, as a sovereign governm ental entity, is not a citizen of any

State within the m eaning of 28 U .S.C. § 1332 and/or 28 U .S.C. § 1441

et seq.

7

This action is not a class action or m ass action under H awai' i law, 28 U.S.C. §

1332(d) and/or 28 U.S.C. § 1441 et seq.

and P laintiff expressly disavows an y intent to bring this

action as a class action or m ass action.

8

This action doe s not arise und er the Co nstitution, laws, or treaties of the U nited

States within the mean ing of 28 U .S.C. § 1331 and/or 28 U .S.C. § 1441

et seq

PARTIES

9

Plaintiff STATE OF H AW AI'I is, and was at all times material herein, a

sovereign bod y politic formed un der the Co nstitution and law s of the State of Haw ai'i , with its

principal place of business in the City and Cou nty of Ho nolulu, State of Hawai' i .

10

Defend ant Takata Corporation ( Takata Corp. ) is, and was at all times m aterial

herein, a foreign for-profit corporation engag ed in the design, man ufacture, testing, marketing,

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promo tion and sale of motor veh icle airbags and com ponent parts thereof, with its principal place

of business in Tokyo, Japan.

11

Defendan t TK H oldings Inc. ( TK H oldings ) is, and was at all t imes material

herein, a subsidiary of Tak ata Corp. engaged in the design, manu facture, testing, m arketing, and

distribution of motor veh icle airbags and their component p arts throughout the U nited States,

with its principal place of business in A uburn H ills, M ichigan.

12

Hereinafter, Takata C orp. and TK Holdings m ay be referred to collectively as

Takata or Takata Defendants.

13

Defend ant Honda M otor Co., Ltd. ( Ho nda Japan ) is, and was at all times

material herein, a foreign for-profit corporation w ith its principal place of business in T okyo,

Japan, engaged in the man ufacture and sale of mo torcycles, automobiles, and pow er products

through indepen dent retail dealers, outlets, and authorized dealerships primarily in Japan, North

Am erica, Europe, and A sia.

14

Defendant American Honda M otor Co., Inc. ( Am erican Honda ) is , and was at

all times m aterial herein, a subsidiary of A merican H onda he adquartered in Torrance, California,

wh ich conducts the sales, m arketing, and operational activities for H onda c ars, trucks, and sport

utility vehicles' automob ile parts in the U nited States.

15

Ho nda of America Manu facturing, Inc. ( Ho nda Ma nufacturing ) is a corporation

organized under the law s of Oh io, with its principal place of business in M arysville, Ohio.

Hon da M anufacturing is responsible for designing and marketing H onda M otors' vehicles for the

Un ited States Market. It designs, tests, manufactures, marke ts, distributes and sells those

vehicles in the U nited States.


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16

Hereinafter, Defendants Honda Japan, Am erican Honda, and Honda

M anufacturing may be referred to collectively as Hon da or Hon da Defenda nts.

17

DO E DE FEN DA NT S 1-100 are sued herein under fictitious names for the reason

that after diligent and good faith efforts to ascertain their names and identities, their true names

and identities are presently unknow n to Plaintiff except that they are connected in som e m anner

with the named Defendants and/or were the agen ts, servants, emp loyees, employers,

representatives, co-venturers, associates, vendors, suppliers, manufacturers, governmental

entities, sub-contractors or contractors and/or owners, lessees, assignees, licensees, and designers

of the named D efendants; and/or were in some m anner presently unknown to Plaintiff engaged in

the activities alleged herein; and/or were in some man ner responsible for the statutory violations

and or o ther wrongful acts and/or om issions alleged herein; and/or manu factured and/or designed

and/or placed on the market a product which w as unsafe and concealed and/or misrepresented or

failed to ad equately disclose its risks, which affected the safety of the m otor vehicle airbags

discussed herein and/or created an unreasonable risk of harm to persons or property; and/or

inspected and/or maintained and/or controlled some object or product in an u nfair or deceptive or

otherwise wrongful man ner; and/or were in some man ner related to the named D efendants; and

Plaintiff prays for leave to insert herein the ir true na me s, identities, capac ities, activities and/or

responsibilit ies w hen the sam e are ascertained.

C O U N T I — T A K A T A D E F E N D A N T S

U N F A I R O R D E C E P T I V E A C T S O R P R A C T I C E S

18

Plaintiff reasserts and rea lleges, as if fully set forth herein, the allegations of all

preceding p aragraphs.

19

At all t imes material herein, Takata designed, manufactured, marketed an d/or sold

motor vehicle airbags and/or comp onent parts thereto that were expected and intended to be and

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were installed in m otor vehicles sold or leased throughout the United States, including Haw aii

(hereinafter Takata Airbags ).

20

Airbags are critical safety features that protect drivers and pa ssengers from injury

in the event of an accident. How ever, Takata Airbags have m ade the vehicles in which they are

installed, and their occup ants, less safe.

21

As used herein with respect to Takata Airbags, the term unsafe means that

Takata airbags fail to operate as safely as an ordinary user or con sumer w ould expect.

22 From 1999 to the present, Takata Airbags have been unsafe in that, amo ng other

things, they have been inflated by mean s of an exp losive charge powered by an u nstable, volatile

com pound k nown as am mo nium nitrate that Takata began using in its airbags in 1999.

23

Heat and h umidity, independently or in comb ination, can further aggravate the

instability of am mon ium nitrate. Over time, either or both of these cond itions can alter the

physical properties of am mon ium n itrate, causing it to explode wh en an airbag is deployed (often

euphem istically referred to by Defendants as overly aggressive combustion ). As discussed

below, such an explosion can result in the body of the inflator erupting, sending metal fragments

through the airbag and into the vehicle's occupants at lethal velocities.

24

Haw ai'i 's geography and location create precisely the kinds of temp erature and

hum idity cond itions that adversely affect the stability of am mo nium nitrate. Tem perature

fluctuations across a num ber of d ifferent temperature thresholds can alter the p hysical structure

of am mo nium nitrate, causing it to go from one structural phase to another. Haw ai' i's

temperatures routinely fluctuate across one such threshold, and, as a result , cause changes in the

structure of amm onium n itrate from one phase to ano ther and back again, rendering it even m ore

unstable.

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25 Ove r time, exp osure to high absolute hum idity w ill also reportedly w orsen the

stability of amm onium nitrate. Hawai'i is surrounded by warm ocean w ater, which con tributes to

a mu ch higher absolute hum idity than in m ost regions in the Un ited States. Given the persistent

condition of high absolute hum idity in Ha wai'i and the routine temperature fluctuations that

wo uld trigger phase changes in am mo nium nitrate, Haw ai'i residents have alway s been at a

significantly greater risk of o verly aggressive com bustion, rupture, and injury and/or death

caused by T akata's unsafe airbags.

26 Takata purported to m oderate the volatility of the amm onium nitrate in its airbags

through a process it called phase stabilization, but the phase stabilization itself has proven

unreliable and ineffective for long-term an d even short-term u se.

27

In or before 2003, Takata A irbags began injuring and killing mo tor vehicle

occupan ts. A full three years earlier, in 2000, Takata covered u p evidence that it knew its

airbags might fail , producing just that outcom e.

28

Takata began investigating unsafe deploym ent of i ts airbags as early as January

2004, following an incident involving a BM W wh ose airbag inflator had been m anufactured in

Takata's LaGrange, Georgia plant.

29

Ano ther incident in May 20 04 that resulted in the death of a wom an in Alabam a

(hereinafter the 2004 Alabam a incident ), involved a Honda Accord, which was reported to and

exam ined by Hond a and then investigated by Takata during the Sum mer of 2004.

30

Hon da reportedly notified Takata of an add itional incident in February 2007 a nd

two add itional incidents in M ay 2007 , and from that t ime to the present Takata Airbags

reportedly have been injuring and killing m otor vehicle occupants in increasing num bers.

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31 As o f the latest count, Takata A irbags have killed ten people in the U nited States.

Takata A irbags have also injured more than 10 0 peop le, with injuries ranging from severe

lacerations, puncture wou nds, broken bo nes and b urns, to permanen t disfigurem ent, blindness,

traumatic brain injury, and quadriplegia.

32

Takata knew even before it began using amm onium n itrate in its airbags in 1999

that amm onium nitrate was too un stable to be suitable for use in motor vehicle airbags,

particularly in areas of the country with high h eat and/or high hum idity, like Haw aii. Takata

even ack now ledged the risks inherent in amm onium nitrate in its initial application to patent its

am mo nium nitrate inflator, which described the chem ical as problematic and thermally

unstable. Although safer alternative inflator propellants were available, and had been used by

Takata from the time it first began man ufacturing airbags in the 1980's, amm onium nitrate was

much cheaper. Takata overrode these concerns and switched to am monium nitrate as the

prope llant for its airbag inflators.

33

After Takata changed its airbag propellant to the m arkedly cheaper amm onium

nitrate in 19 99, Takata ex perienced a significant increase in its share of the w orldwide airbag

mark et. By 201 5, almo st one-quarter of all m otor vehicle airbags sold worldw ide were Takata

Airbags.

34

Takata has k now n that its airbags were injuring and killing people since at least

the 2004 A labama incident, but Takata has tried to conceal that know ledge from the pu blic, and

has withheld m aterial information regarding the hazards of Takata Airbags from the public for

years. Further, Takata introduced its amm onium nitrate airbags onto the market even thou gh

they had never passed its initial product testing, a particularly glaring failure given wh at it knew

about the dan gers of this chemical.

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35.

Even at the time, Takata employees discussed the risk they were taking. One

former Takata engineer has testified that, prior to the launch of the new inflators, he warned a

manager that if we go forward with [ammonium nitrate], someone will be killed. The manager

acknowledged that he understood the issue, but [stated that] the decision was out of his hands.

36.

During its investigation of the 2004 Alabama incident, Takata instructed its

engineers at a facility in the United States to run secret tests on a series of 50 airbags. After

Takata received the results, it ordered its employees to dispose of the airbags and destroy the test

results. Takata successfully hid this information from the unsuspecting public until one or more

Takata whistleblowers revealed it to the

New York Times

which published the information in

November 2014. However, Takata continued to deny that ammonium nitrate was responsible for

the safety issues in its airbags, failed to disclose what it knew about its own testing of the

airbags, and continued to attempt to minimize the scope of the problem.

37.

Any purported doubts Takata may claim to have had regarding the dangers of

ammonium nitrate as an airbag inflator propellant were most certainly laid to rest when the

violent explosion of several containers of ammonium nitrate propellant rocked Takata's main

inflator production plant in Monclava, Mexico in March 2006 (photo below).

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38

The exp losions reportedly blew out windows on houses a kilometer away.

39

Takata has engag ed in a pattern and practice of hiding and then dow nplaying the

significance of the u nsafe deploym ent of its airbags. Takata failed to disclose what it knew

about the dangers of its airbags, then tried to hide it . When the danger began to come to light,

Takata m isled the public about how w idespread the danger was; and then, when the widespread

nature of the danger could no longer b e denied, Takata (along with Ho nda) dragged its feet in

recalling and replacing its products. As late as 201 3, Taka ta falsely stated pub licly that i t was

not aware of an y injuries associated with the improper deploym ent of any air bags containing

the suspect inflators. Takata continued this pattern of deception and intransigence throughou t

multiple hearings before Cong ress in 2014 an d 2015, even op posing governm ent pleas for a

nationwide recall as late as Decem ber 2015.

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40

Internal Takata docum ents released by the U nited States Senate Com mittee on

Com merce, Science, and Transportation Office of Oversight and Investigation reveal that Takata

engaged in a pattern and practice of man ipulating and selectively modify[ing] test data as early

as 2004 in o rder to conceal the flaws in its airbag designs. Eleven years later, in hearings before

Con gress, Takata execu tives testified to theories regarding the cause of certain airbag incidents

that i ts own personnel had earlier characterized as technically unsuppo rtable and a clear

misrepresentation o f the produ ction records.

41

Takata has acknow ledged that [i]n several instances it provided the National

Highw ay Traffic Safety Adm inistration (or NH TSA ) with testing reports that contained

selective, incom plete, or inaccurate data and failed to disclose information regarding the

safety-related defects that may arise in som e of [its] inflators. Takata likewise m isled and failed

to inform consum ers about the safety of Takata A irbags and the source and scope of the risks of

its airbags, and aided and abetted H onda in making similar material misrepresentations and

omissions.

42

From 1 999 to the present, man y mak es and mod els of mo tor vehicle were

available for sale or lease in the U nited States, including Haw aii, with airbags that did not use

amm onium nitrate as a propellant. During that time, Takata concealed, misrepresented, and/or

failed to d isclose to the p ublic material information regarding the hazards o f i ts airbags, thereby

depriving the public of the op portunity to purchase vehicles containing airbags that did not use

the volatile, unstable amm onium nitrate as a propellant.

43

Takata did so in order to increase its own profits and m arket share, and to avoid

the expense an d negative pub licity from a wider recall .

44

The aforem entioned acts and omissions of Takata we re unfair and deceptive.

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45

The aforem entioned acts and omissions of Takata constituted violations of HRS

Chapter 480 and other applicable Haw ai i law, and constituted a continuing violation of H RS §

480-2 s prohibition aga inst unfair or deceptive acts or practices in the conduct o f any trade o r

business.

46

Specifically, the aforementioned acts an d om issions of Takata co nstituted unfair

trade practices, in that Takata, by m isrepresenting and w ithholding m aterial information from the

public, offended established pub lic policy and acted imm orally, unethically, and unscrupulously,

and sub stantially injured con sumers by subjecting them to serious injury, death and/or the risk of

serious injury and dea th. Takata also took advantage of consum er ignorance and exercised

oppressive pow er over consum ers because consum ers were not in a position to investigate, or to

recognize the need to investigate, the unsafe cond ition of the airbags for themselves.

47 As a result of the aforementioned unfair or deceptive acts and omissions, Takata

was ab le to continue m anufacturing Takata Airbags and selling them to automob ile

man ufacturers, which, in turn, installed the unsafe T akata Airbags in their vehicles and sold

and/or leased the vehicles to unsuspecting m emb ers of the public, including Haw ai i consum ers.

48

M ore than 70,000 cars containing Takata A irbags were sold or leased in the State

of Haw aii.

49

Takata s sale and distribution of its unsafe airbags with amm onium nitrate

propellant, which Takata kn ew was inherently unstable, which it failed to adequately test and

appropriately m anufacture, and wh ich yielded a widening toll of injuries and deaths that only

confirmed T akata s assessment of their risks, resulted in enorm ous p rofits to Tak ata, including

profits from airbags installed in veh icles ultimately sold or leased in the S tate of Haw ai i .

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50 Takata s concealment, m isrepresentations, and o missions with regard to the

nature and scope o f the unsafe condition of its airbags were also unfair and decep tive and

delayed and m inimized the extent of recalls by automob ile manufacturers, thereby delaying and

minimizing its own lost profits and the expense of replacing unsafe Takata A irbags containing

amm onium nitrate.

51

Due to the widespread nature of the un safe condition of Takata Airbags, the

demand for replacement airbags and/or replacement airbag inflators has allegedly been

overwhelm ing for Takata and autom obile manufacturers, resulting in long delays before unsafe

Takata A irbags have been o r will be replaced. To date, only about one-third of the Takata

Airbags have been replaced nationw ide, and the number o f vehicles being recalled increases

almost daily. At last report, an estimated 35 to 40 m illion additional vehicles will soon be add ed

to the list of approximately 24 million already subject to recall in the United States alone.

52

M oreover, those replacement airbags still use am mon ium n itrate as the propellant

for their inflators, making the replacement parts, upon information and b elief, as unreliable and

dangerous as the original parts.

53

As a result of the foregoing, mem bers of the Hawaii public have now been placed

in an untenable position by T akata s misconduct — they m ust either: (1) continue to op erate their

vehicles with their existing Takata A irbags, and thereby face expo sure to a risk of serious injury

or death o n a daily basis; (2) disable their Takata A irbags and thereby face potentially serious

injury or death due to the lack of a functioning airbag; or (3) stop using their vehicles altogether,

and face the co st of securing a replacement v ehicle or other means of transportation until their

Takata A irbag is replaced.

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54.

one of these solutions is satisfactory, and two of them are potentially life-

threatening. Ev en the safest alternative of not u sing the vehicle wo uld impo se an intolerable

financial hardship on m ost Haw aii residents and businesses.

55.

laintiff therefore, pursuant to H RS § 480 -15, other applicable Haw aii law, and

the equitable authority of the court, seeks the relief laid out below.

56.

laintiff requests that this Court enter an order:

a

enjoining the Takata Defendants from engaging in their unfair and

deceptive conduct;

b

comp elling T akata to engage in a robust public education effort to ensure

that affected H awai i consumers are aw are of the potential hazards of their Takata A irbags and

the availability of repairs;

c

comp elling Tak ata to promptly, on an ongoing b asis, reimburse and/or

otherwise provide restitution to all affected veh icle owners and to assume the cost of distributing

such restitution;

d

compelling Takata to disgorge to Plaintiff all ill-gotten gains unjustly

obtained; and

e

assessing and awarding all additional remedies available under HR S

Chapter 48 0 and other applicable Hawai i law.

57.

laintiff further seeks a declaration by this Court that:

a.

akata engaged in unfair or deceptive acts or practices in violation of HR S

§ 4 80-2 by selling and distributing T akata Airbags for installation in motor vehicles wh ile

concealing m aterial information from , m isrepresenting, and/or failing to disclose m aterial

information to the pu blic regarding the hazards o f i ts airbags and /or while inaccurately

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dow nplaying the significance, severity and/or widespread n ature of the hazards posed to the

public by T akata Airbags and the appropriate scope of a proper recall;

b

Takata's acts and/or omissions constitute a continuing violation of H RS

Chapter 480 from the time it f irst used amm onium n itrate propellant through D ecember 201 5, in

that Takata engaged in a course of unfair and deceptive conduct that included and dep ended

upon: (i) ma nufacturing, marketing and selling u nsafe airbags; (ii) actively concealing from,

misrepresenting, and/or failing to disclose to the public and to the governm ent the source and

scope of the un safe condition of Takata A irbags; and (iii) pursuing inappropriately narrow recalls

and inadequate repairs that allowed, and con tinues to allow, Haw aii consumers to drive and be

sold automob iles that are unsafe; wh ich acts and omissions prevented consum ers and the State of

Haw aii from being aw are of the unsafe condition of Takata A irbags; and

c

Takata's sale and/or distribution of each Takata A irbag installed in a

vehicle sold or leased in the State of H awai'i, or later transported to the State of Haw ai'i,

constituted multiple, separate violations of HRS § 480-2 for w hich a civil penalty shall be

imposed.

58.

laintiff further requests that this Court imp ose civil penalties of up to 10,000

per defenda nt for each violation of Ch apter 480. Plaintiff asserts that Taka ta's sale and/or other

distribution of each Takata A irbag installed in a vehicle sold or leased in H awaii, or transported

to Ha waii after its original purchase, con stitutes multiple, separate violations of C hapter 480 by

Takata. Du e to the aggrava ted nature of Tak ata's misconduct, Plaintiff asserts that impo sition of

the maxim um civil penalty is warranted for each v iolation.

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COUNT II — HOND DEFEND NTS

UNF I R OR DE C E P T I V E C T S OR P R C T I C E S

59. Plaintiff reasserts and realleges, as if fully set forth herein, the allegations of all

preceding paragraphs.

60.

Upon information and belief, at all times material herein Honda knew that the

airbags it was purchasing from Takata used ammonium nitrate as a propellant.

61. At all times material herein, Honda and its engineers knew or should have known

that ammonium nitrate was commonly used as an explosive in mining, construction and other

industries and that ammonium nitrate was not used by any other maker of airbags.

62.

In or before 2004, when the first Takata Airbag rupture was reported, Honda

knew or should have known that there was a problem with the airbags that could cause them to

unexpectedly explode and injure or kill vehicle occupants and/or Honda was put on notice of that

fact and turned a blind eye toward it.

63.

From and after 2007 and 2008, when the injuries and fatalities began mounting,

Honda again either knew of the unsafe condition of the Takata Airbags or turned a blind eye

toward the existence of such unsafe condition.

64.

Honda had numerous discussions with Takata in which Takata offered shifting

explanations of the source and potential extent of the hazardous condition of the airbags.

Privately, Honda expressed concern about these shifting explanations, but Honda did not share

its knowledge or concerns with the public or the government, and instead offered unqualified

and inaccurate) descriptions of the nature and scope of the hazardous condition of Takata

Airbags.

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65

Despite its reasons for concern, through D ecember 20 15, Hond a continued to

install unsafe Takata A irbags in Hond a autom obiles, and continued to sell and/or lease such

vehicles to the m otoring public, including p urchasers and lessees in H awai i .

66

It was not until Novem ber 2008 that Honda b egan slowly notifying vehicle

own ers and the federal government that the airbags in some of its vehicles should be replaced.

But it did so in sm all incremen ts, apparently in the ho pe of av oiding widespread p ublicity

regarding the problem. In Novem ber 2008, Hon da indicated there was a problem in only 3,940

vehicles. In June 20 09, Hon da revealed that more veh icles were involved, but claimed that it

was only approx imately 440,000 of the many m illions of vehicles Ho nda had sold. In February

2010 , Honda indicated that other Honda vehicles were involved, but only about 379 ,000 mo re. It

was not until April 2011 that Honda ackno wledged that approxima tely another 833,277 vehicles

were affected. Only in 201 4 did H onda reveal that nearly another 4.5 m illion vehicles were

involved, and only in 2015 did H onda reveal that more than 5 m illion additional Hon da vehicles

were im plicated.

67

In Decem ber 2014, Hon da adm itted that between 2003 and 2 014 it failed to

disclose more than 1,729 accidents resulting in injuries or deaths, including eight involving

Taka ta Airbags. Honda likewise m isled and failed to inform consum ers about the safety of its

vehicles, the source an d scope of the risks of its airbags, and the adequacy of its recalls.

68

From 19 99 to the present, many mak es and mod els of mo tor vehicle were

available for sale or lease with airbags that did not use amm onium nitrate as a propellant. During

that time, H onda concealed, m isrepresented, and/or failed to disclose to the pu blic material

information regarding the hazards of its airbags, thereby depriving the pu blic of the oppo rtunity

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to purchase vehicles containing airbags that did not use the vo latile, unstable amm onium nitrate

as a propellant.

69

Ho nda did so in order to increase i ts own profits and m arket share and to avoid

the expense and negative publicity from a w ider recall .

70

The aforemen tioned acts and om issions of Hond a were unfair and deceptive.

71

The aforem entioned acts and omissions of Honda co nstituted continuing

violations of H RS C hapter 480 and o ther applicable H awai i law, and con stituted a continuing

violation o f HR S § 480-2 s prohibition ag ainst unfair or deceptive acts or practices in the

conduc t of any trade or business.

72

Specifically, the aforementioned acts and omissions of H onda co nstituted unfair

trade practices, in that Hond a, by m isrepresenting and w ithholding m aterial information from the

public, offended established pub lic policy and acted imm orally, unethically, unscrupulously, and

substantially injured consum ers by subjecting them to serious injury, death and /or the risk of

serious injury and death. Hon da also took advantage of consum er ignorance and exercised

oppressive pow er over consum ers because consum ers were not in a position to investigate, or to

recognize the need to investigate, the unsafe cond ition of T akata A irbags for themselves.

73

As a result of the aforementioned unfair or deceptive acts and om issions, Ho nda

was able to continue distributing its vehicles to dealers w ho sold an d/or leased Ho nda veh icles to

unsuspecting mem bers of the public, including mem bers of the Haw ai i public, with unsafe

Takata A irbags inside.

74

M ore than 20,000 Ho nda vehicles containing Tak ata Airbags were sold or leased

in the State of H awa i i .

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75

Hon da s continued sale and distribution of its vehicles containing Tak ata Airbags

with dangerous am mo nium n itrate propellant, which it failed to ensure was adeq uately tested and

appropriately m anufactured, and which yielded a widening toll of injuries in deaths that only

confirmed its risks, resulted in enorm ous profits to Ho nda, including profits from veh icles sold or

leased in the S tate of Haw ai i.

76

Hon da s concealment, misrepresentations, and om issions w ith regard to the nature

and scope o f the unsafe condition of Takata Airbags were also unfair and deceptive and d elayed

and m inimized the extent of its recalls, thereby delaying and m inimizing its own lost profits and

the expense of replacing unsafe Takata A irbags containing am mon ium nitrate.

77

Due to the widespread nature of the unsafe condition of Takata Airbags, the

deman d for replacement airbags and/or replacemen t airbag inflators has allegedly been

overwh elming for Takata and H onda, resulting in long delays before unsafe Takata Airbags have

been or w ill be replaced. To date, just over one-half of the Tak ata Airbags in Hon da vehicles

have been replaced nationwide, and the num ber of vehicles being recalled increases almost daily

now . At last report, an estimated 35 to 40 m illion additional vehicles will soon be add ed to the

list of approx imately 24 million a lready subject to recall in the Un ited States alone.

78

M oreover, many of the replacement airbags offered by Honda still used

amm onium nitrate as the propellant for its inflator, making the replacement parts, upon

information and belief, as unreliable and dangerous as the original parts.

79

As noted abov e, due to the foregoing, me mb ers of the Haw aii public have now

been placed in an un tenable position by H onda s misconduct — they mu st either: (1) continue to

operate their vehicles with their existing T akata Airbags, and thereby face exposure to a risk of

serious injury or d eath on a daily basis; (2) disable their Takata Airbags and thereby face

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potentially serious injury or death due to the lack of a functioning airbag; or (3) stop using their

vehicles altogether, and face the cost of securing a replacement vehicle or other m eans of

transportation until their Takata Airbag is replaced.

80.

one of these solutions is satisfactory, and two of them are potentially life-

threatening. Even the safest alternative of not using the v ehicle wou ld impose an intolerable

financial hardship on most H awai i residents and businesses.

81.

laintiff therefore, pursuant to HRS § 48 0-1 5, other applicable Hawa ii law, and

the equitable authority of the court, seeks the relief laid out below.

82.

laintiff requests that this Cou rt enter an order:

a

enjoining the Honda D efendants from engaging in their unfair and

deceptive conduct;

b

com pelling H onda to engag e in a robust public education effort to ensure

that affected Haw ai i consum ers are aware of the potential hazards of their Takata Airbags and

the availability of repairs;

c

com pelling Ho nda to promptly, on an ongoing basis, reimburse and/or

otherwise provide restitution to all affected vehicle owners an d to assum e the cost of d istributing

such restitution;

d

com pelling Takata to disgorge to Plaintiff all i l l-gotten gains u njustly

obtained; and

e

assessing and awarding all additional remedies available under HR S

Chap ters 480 and other applicable Haw ai i law.

83.

laintiff further seeks a declaration by this Court that:

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a

Hon da engaged in unfair or deceptive acts or practices in violation of HR S

§ 480 -2 by installing Takata A irbags in its vehicles w hile concealing material information from,

misrepresenting, and /or failing to disclose m aterial information to, the public regarding the

hazards of T akata Airbags and /or while inaccurately downp laying the significance, severity

and/or widespread nature of the hazards posed to the public by Takata Airbags and the

appropriate scope of a proper recall;

b

Hon da's acts and/or omissions constitute a continuing violation of H RS

Chap ter 480 from at least the time it learned of the 2004 A labama incident through Decem ber

2015, in that, from at least 2004 through D ecemb er 2015, Hon da engaged in a course of unfair

and deceptive condu ct that included and depended up on: (i) man ufacturing, ma rketing and

selling au tomob iles with unsafe airbags; (i i) actively concealing from , misrepresenting, and/or

failing to disclose to the public and to the gov ernment the source and scope of the unsafe

condition of i ts airbags; and (ii i) pursuing inappropriately na rrow recalls and inadequate repairs

that allowed , and continues to allow, Haw aii consumers to drive and be so ld automob iles that

are unsafe. These acts and om issions prevented con sum ers and the State of Haw ai' i from being

aware of the un safe condition of T akata Airbags; and

c

Ho nda's sale and/or distribution of each Takata A irbag in a Honda ve hicle

sold or leased in the State of Haw aii, or later transported to the State of Haw ai' i, constituted

mu ltiple, separate violations of HR S § 4 80-2 for w hich a civil penalty shall be impo sed.

84.

laintiff further requests that this Court impose civil penalties of up to 10,000

per defend ant for each violation of Ch apter 480. Plaintiff asserts that Honda's sale and/or other

distribution o f each T akata A irbag in each H onda-affiliated vehicle sold or leased in H awai'i , or

transported to Haw aii after its original purchase, constitutes a violation of C hapter 480 by

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Honda. D ue to the aggravated nature of Hond a's misconduct, Plaintiff asserts that imposition of

the maxim um civil penalty is w arranted for each violation.

WHEREFORE

the State of Haw aii, by and through its Office of Consum er Protection,

respectfully prays this C ourt for the follow ing relief against Defendants:

1

A declaration by this Court that the Defendants each engag ed in unfair or

deceptive acts or practices, in violation of H RS §480-2(a) and other applicable Haw ai'i law, by

concealing and/or failing to disclose to the pu blic material information regarding the po tential

hazards of Takata A irbags.

2.

A dec laration by this Court that the Takata D efendants' sale or other distribution

of each Takata Airbag that was installed in any vehicle ultimately sold or leased in Hawaii

and/or otherw ise transported to Haw aii after purchase, constituted m ultiple, separate violations

of HR S § 480-2(a) and other applicable Haw ai'i law by each T akata Defendant;

3.

A declaration by this Court that each Takata A irbag in a Honda vehicle that was

sold or leased in Hawaii, or otherwise transported to Hawai'i after purchase, constituted

mu ltiple, separate violations of HR S § 480 -2(a) and other applicable Haw aii law b y each H onda

Defendant;

4.

A d eclaration by this Court that the acts and omissions of Defenda nts described

herein and otherwise proved at trial constitute continuing violations of H RS § 480 -2.

5. Pursuant to HR S § 480-3.1, an award of civil penalties of 10,000 against each

Takata D efendant for each Takata A irbag installed in any vehicle ultimately sold or leased in

Haw ai'i and/or otherwise transported to H awai'i after purchase, in am ounts to be p roved at trial;

2 1 3 0 4 0 2 1

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DA TED : Honolulu, Haw ai'i , M ay 13, 2016.

L. RICHARD FRIED, JR.

PATRICK F. MCTERN

Attorneys for P laintiff

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6

Pursuant to HRS § 480-3.1, an award of civil penalties of 10,000 against each

Honda Defendant for each Takata Airbag in a Honda-affiliated vehicle that was sold, leased or

otherwise distributed in Hawaii and/or otherwise transported to Hawaii after purchase, in

amounts to be proved at trial;

7

Pursuant to HRS § 480-15, an order enjoining each Takata and Honda D efendant

from future violations of the law and compe lling D efendants to inform Hawai'i consumers about

the potential hazards of and repair options for their Takata Airbags;

8

An aw ard com pelling each Defendant to pay restitution to any purchasers or

successor vehicle ow ners in Haw aii and to assume the cost of d istributing such restitution;

9

An award com pelling each Defendant to disgorge to Plaintiff all ill-gotten gains

unjustly obtained; and

10 An award of:

a

Plaintiff's cost of investigation and reasonable attorneys' fees, pursuant to

HRS Chapter 480,

b

Interest allowed by law, including pre judgment interest, and

c

Such other and further relief as provided by law and/or as the Court deems

just in the premises.

Plaintiff asserts claims herein in excess of the minimum jurisdictional requirements of

this Court.

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I N THE CI RCUI T COURT O F THE FI RST CI RCUI T

STATE OF HAW AII

STAT E OF HA W AII, by its Office of Consumer

Protection,

Plaintiff,

VS

TA KA TA CO RPORA TI ON; TK HOLDI NGS,

INC.; HON DA M OTO R CO., LTD.;

A M ERI CA N H ONDA M OTO R CO. , INC. ;

HOND A OF A M ERI CA M A NU FA CTURI NG,

INC. , and DOE DEFEN DAN TS 1-100,

Defendants.

CIVIL NO.

(Other C ivil Action)

S UMM ONS TO ANS WER CIVIL

COMP LAINT

No trial date has bee n set.

SUMMONS TO NSWER CIVIL COMPL INT

TO THE A BO V E- NA M ED D EFENDA NT( S):

You are h ereby summ oned and required to f i le with the court and serve upon L . Richard

Fried, Jr., Esq. and Patrick F. M cTernan, Esq ., plaintiff s attorneys, whose add ress is 600 D avies

Pacific C enter, 841 B ishop Street, Honolulu, Hawaii , 96813, an answer to the C omplaint which

is herewith served upon y ou, within twenty (20) days after service of this Summ ons upon y ou,

exclusive of the date of service. If you fail to do so, judgmen t by default will be taken against

you for the relief demanded in the C om plaint.

This sum mo ns shall not be personally delivered between 10:00 p.m. and 6:00 a.m.

on prem ises not open to the general public unless a judge of the above-entitled court

perm its in writing to this summ ons personal delivery during those hours.

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A failure to obey this summons may result in an entry of default and default

judgment against the disobeying person or party.

M A Y 1 3 2 1 6

DATE ISSUED:

In accordance with the Americans with Disabilities Act and other applicable state and federal laws, if you require a reasonable accommodation

for a disability please contact the ADA Coordinator at the First Circuit Court Administration Office at PHONE NO. 539-4333 FAX 539-4322

or TTY 539-4853 , at least ten 10) working days prior to your hearing or appointm ent date.

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State of Hawaii v. Takata Corporation Complaint

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Transcript of State of Hawaii v. Takata Corporation Complaint