A decade-long conspiracy to cheat U.S. emission tests—and drivers—has now cost Volkswagen $22 billion and counting.
VW has reached a $4.3 billion agreement with the Justice Department stemming from its Dieselgate scandal.
In the latest financial blow, the German automaker has reached a $4.3 billion agreement with the U.S. Department of Justice, which will cover criminal and civil charges stemming from its Dieselgate scandal.
VW equipped almost 600,000 American diesel vehicles with devices that would cheat U.S. emissions tests by showing nitrogen oxide emissions exponentially lower than what the cars would emit on the road.
The devices were discovered in 2014. In September 2015, VW admitted to installing the defeat devices, but not the length or extent of its conspiracy.
Last year, the company reached a $15 billion settlement with owners of 2.0-liter “Clean Diesel” vehicles, and a $1 billion settlement with owners of 3.0-liter vehicles.
Of the $4.3 billion under the terms of the new settlement (which still must receive final approval from a judge), $2.8 billion will serve as a criminal penalty, while $1.5 billion will go to civil lawsuit resolutions.
Due to the severity and extent of this cover-up, several Volkswagen executives also face serious charges for their roles in the Dieselgate scandal.
Six VW Execs Charged with Conspiracy and Fraud
A federal grand jury in Michigan has indicted the following six VW officials for carrying out the emissions cheating scheme and defrauding American drivers:
Richard Dorenkamp (68)
Bernd Gottweis (69)
Jens Hadler (50)
Heinz-Jakob Neusser (56)
Jürgen Peter (59)
Oliver Schmidt (48)
The grand jury also indicted the executives for violating the Clean Air Act.
One of the VW officials, Oliver Schmidt, was arrested while vacationing in Miami earlier this month. The other five live in Germany and will presumably stay out of the U.S. in order to avoid being arrested.
The U.S. government has faced criticism in the past for punishing corporations for white-collar crimes, but not the people who run those corporations and perpetrate those crimes. For some, the indictment of several VW executives represented a welcome break in that pattern.
Deputy Attorney General Sally Yates said, “This wasn’t simply the action of some faceless, multinational corporation. This conspiracy involved flesh-and-blood individuals who used their positions within Volkswagen to deceive both regulators and consumers.”
As a result, more charges could be on the way for other VW employees who engaged in the scheme to defraud drivers, the U.S. government, and the U.S. Environmental Protection Agency (EPA).
Fiat Chrysler Allegedly Cheated on Emissions, Too
Late last week, the EPA said that Fiat Chrysler, too, misled regulators with regard to at least 104,000 of its vehicles, namely Jeep Cherokee and Dodge Ram trucks (2014-2016). Like many of VW’s Dieselgate vehicles, these trucks have 3.0-liter diesel engines.
Fiat Chrysler now faces a $4.6 billion fine for failing to disclose emissions software.
Fiat Chrysler now faces a $4.6 billion fine for failing to disclose that these vehicles have software that can switch off emission controls while driving.
The depths of Fiat Chrysler’s scheme are not yet clear. John German, a senior fellow at the International Council on Clean Transportation, told the Irish Times that the cases are “quite different,” adding that “we don’t know how often the emissions controls were shut off.”
The EPA has not yet used the terms “cheat device” or “cheat software,” so it’s possible Fiat Chrysler’s violation was more of an innocent mistake (or just a smaller, less egregious cheat) than VW’s. We won’t know until the EPA and the Justice Department conclude their investigations.
What is clear is that automakers continue to cheat American regulators and drivers, with no regard for their schemes’ impact on the environment—or on people’s wallets.
In 2016, Uber unleashed a host of innovations: self-driving cars, UberFreight, and more. But with innovation comes new regulations—something Uber consistently demonstrates it doesn’t have the patience for.
Some cities and states believe that by siding with Uber, they are standing for innovation, while others are taking a more cautious approach and are trying to rein in the company. It has created a complicated legal landscape that is still trying to catch up with the new technology.
Here are some of the major legal issues we think Uber will wrestle with in 2017.
State Battles Over Self-Driving Legislation
In November 2016, the Department of Transportation created the first Federal Automated Vehicles Policy, leaving the manufacturing of self-driving cars to companies, and the development of laws and regulations to the states.
Though the document warns against states creating inconsistent legislation, it also says that “states may wish to experiment with different policies and approaches.”
These “experiments” have already been tested during Uber’s self-driving car pilots. In Pittsburgh, the pilot has been relatively uneventful, compared to San Francisco, where the company received a cease-and-desist letter from the Attorney General within two days of the pilot’s launch.
Uber refused to obtain an autonomous vehicle testing permit from the state—which only costs $150.
Uber refused to obtain an autonomous vehicle testing permit from the state—which only costs $150—arguing that their vehicles still required human drivers and therefore did not fit within California’s definition of self-driving. Making matters worse, cameras captured their autonomous cars running red lights and making unsafe turns in bike lanes.
Though Uber dismissed traffic violations as human error from their operators, in the end they shipped their cars to Arizona.
Arizona Governor Doug Ducey welcomed the company, saying, “While California puts the brakes on innovation and change with more bureaucracy and more regulation, Arizona is paving the way for new technology and new businesses.”
In addition to Arizona, Uber may also test their autonomous vehicle technology in Michigan this year. Though there haven’t been any announcements, the state just legalized self-driving cars without licensed drivers, steering wheels or brakes.
Without clear, consistent oversight, though, the legal skirmishes and unsafe driving that we saw in California will likely continue. Increased federal regulation is likely to come, but it may favor Uber and other autonomous vehicle manufacturers: Uber CEO Travis Kalanick and Elon Musk are both on the President-elect’s Strategic and Policy Forum.
Transit Partnerships Demand Greater Transparency
In 2016, some city officials cut back on public transit spending and began offering residents vouchers for Uber rides instead. These programs are often referred to as “First Mile Last Mile” since they replace the first and last few stops of a route where there are the fewest passengers.
Is it wise to give Uber even more power?
For a city’s budget, it often makes financial sense to replace low-traffic bus routes with subsidized Uber rides. Florida cities like Pinellas Park and Altamonte Springs (which pays 20% for all Uber rides within city limits) have done this and claim it’s a success.
It’s a worrisome trend, though, and may negatively affect citizens who rely on public transportation the most. Citizens who don’t own smartphones or credit cards can’t order a ride. And the disabled would likely have a harder time getting around, as it’s still difficult for passengers to find Uber drivers who can accommodate wheelchairs and guide dogs.
Swapping out bus routes for Uber rides also shifts the power away from local authorities to a private company. In addition to replacing public sector jobs with poor contract jobs (see below), it also limits government access to ridership data, which Uber considers confidential information.
New York City is currently battling this issue. The city requires drivers to report pick-up locations and times, but they want to extend this to include drop-off locations and times. Officials argue the data would be used to identify incidents of driver fatigue, but Uber thinks it’s an invasion of privacy.
“At the moment Uber and Lyft are subsidizing U.S. ridership, and one day they’re going to start profiting from it.”
While New York City’s argument certainly has some holes, Uber hasn’t proven to be the best privacy protector: Former employees revealed last year that workers tracked the locations of ex-partners and celebrities.
More importantly, is it wise to give Uber even more power? What happens if Uber decides to end these partnerships and local cities are left without efficient bus or train routes?
And, as Slate author Henry Grabar points out, “At the moment Uber and Lyft are subsidizing U.S. ridership, and one day they’re going to start profiting from it.”
Drivers Push to Be Employees, Not Contractors
Will 2017 finally settle Uber’s longest fight, over whether drivers are employees or contractors?
The company has maintained that by classifying drivers as contractors they are providing them with the flexibility drivers desire. “Flexibility” is a common term the company uses to defend why they deny drivers basic employee rights, like informing them when fares are reduced or ensuring that drivers are paid at least the minimum wage.
Two pending class action lawsuits representing drivers in California and Massachusetts will lend weight to the classification debate.
U.S. District Judge Edward Chen rejected the $100 million settlement, saying that it was unfair to drivers.
In April 2016, Uber proposed a $100 million settlement that, if accepted, would have maintained drivers’ contractor status. But U.S. District Judge Edward Chen rejected the settlement, saying that it was unfair to drivers. (The two parties have since resumed negotiations.)
A new thorn for drivers is the Ninth Circuit Court of Appeal’s decision to uphold Uber’s arbitration agreements—an agreement that Judge Chen declared was “unconscionable.” The September 2016 decision ruled that drivers who joined Uber in 2013 and 2014 must settle their disputes in private arbitration, rather than class action lawsuits. This decision will likely disqualify thousands of drivers who were originally in Massachusetts and California’s employee misclassification suit.
ClassAction.com will continue to follow this debate to provide Uber drivers with the latest information on their worker classification and legal rights. If you are an Uber driver, contact us today with your legal questions.
Hoping to put the Dieselgate scandal in its rearview mirror, Volkswagen is focusing less on individual vehicle ownership and investing more in ride-hailing, autonomous driving, and electric cars.
MOIA’s focus is changing urban mobility.
These efforts will take place under Moia, a new standalone mobility services company.
Moia signals VW’s intent to compete with tech companies such as Google, Apple, and Uber as a provider of innovative transport solutions.
Volkswagen officially launched Moia at the Tech Crunch Disrupt technology event in London on December 5.
Moia (a Sanskrit word meaning “magic”) will operate as an independent brand under the VW umbrella, which also includes the brands Audi and Porsche.
The Moia brand is VW’s second step away from its traditional vehicle manufacturing business. In May, VW invested $300 million in Gett Inc., a ride-hailing company that operates in more than 100 cities.
Moia’s initial focus is on ride-hailing and on-demand pooling services. It also plans to introduce an electric car as soon as 2021. European pilot projects start in 2017, but Moia eyes an international market.
“Even though not everyone will still own a car in future, Moia can help make everyone a customer of our company in some way or another,” said Volkswagen CEO Matthias Mueller in a statement.
“We’re a startup with VW group’s resources and we have a global aspiration,” said Moia CEO Ole Harms. “Our sights are set on becoming one of the global top players for mobility services in the medium term.”
Automakers Facing Seismic Industry Changes
An industry that since its inception has focused on selling internal combustion vehicles to individual drivers is under technological assault.
Dieselgate may have been a blessing in disguise for Volkswagen.
Not only is the industry moving towards electric cars with automated features, it’s also facing a future in which drivers themselves are obsolete.
Companies like Uber and Lyft that provide on-demand ride hailing are obviating the need for personal vehicles. Under legal pressure to classify drivers as employees, Uber and Lyft may scrap drivers altogether and introduce driverless taxis. If they do, they’ll have competition from Google and Apple, which are investing heavily in driverless cars. Vehicles from Tesla, Volvo, Ford and other automakers already feature sophisticated automation systems and may be fully automated within a decade.
Volkswagen is a latecomer in this competitive, rapidly-changing, tech-driven environment. Daimler AG, for example, already has a car-sharing service as well as public-transit and cab hailing apps. General Motors is investing $500 million in Lyft and planning an on-demand network of self-driving cars.
While VW brand Audi offers car sharing in San Francisco and Hong Kong and plans to offer self-driving and fully electric cars in 2017 and 2018, overall VW lags behind the competition from an innovation standpoint.
Ironically, Dieselgate may have been a blessing in disguise for the world’s second-largest automaker. The scandal delivered a near-fatal blow to its “Clean Diesel” passenger car campaign, and VW now seeks a strategic revamp as a leaner, more efficient, and future-looking automotive company.
VW recently announced it would lay off 30,000 workers—5 percent of its global workforce—while adding 9,000 new technology positions.
Berlin-based Moia currently employs 50 workers and will have about 200 employees by the end of 2017. Volkswagen intends to generate a substantial share of its revenue from the startup by 2025.
As one automaker’s polluting diesel scandal nears an end, another’s is just getting started.
In a major step towards resolving its ongoing diesel emission problems in the United States, Volkswagen recently agreed on a plan addressing 80,000 3.0-liter diesel vehicles.
Meanwhile, Chrysler faces allegations that it rigged Dodge diesel trucks to conceal illegally high emissions.
Owners of affected Volkswagen and Dodge vehicles can contact ClassAction.com to learn how to hold the automakers accountable.
VW Looks to Put Dieselgate in Rearview
Volkswagen, which earlier this year reached a $14.7 billion settlement over polluting 2.0-liter diesel cars, has struck a deal with U.S. regulators that resolves pollution issues in 80,000 Audi, Porsche, and Volkswagen 3.0-liter vehicles.
Although not yet official, Reuters reports that the 3.0-liter deal will mirror terms offered in the 2.0-liter settlement, offering owners a buyback or a fix (pending EPA approval).
The pollution problems in 2.0-liter and 3.0-liter Volkswagens are not identical. Smaller, 4-cylinder VWs, including TDI versions of the Golf, Jetta, and Passat, have software that registered permissible nitrous oxide emissions during testing but polluted at levels up to 40 times the legal limit on the road. Larger, 6-cylinder Porsche, Audi and VW cars and SUVs contain an undeclared emissions system that creates pollutants as much as nine times the legal limit.
Owners of 2.0-liter VWs have overwhelmingly opted for vehicle buybacks, an option which also provides a $5,100-$10,000 payment. VW will offer 3.0-liter owners significantly less compensation, say sources briefed on the matter.
Like the 2.0-liter settlement, the 3.0-liter settlement is expected to include billions of dollars in criminal and civil fines. Nearly one-third of the $14.7 billion 2-liter settlement will go toward remediating environmental harm.
Lawsuit Claims That Dodge Diesels Hide Emissions
Fiat Chrysler Automobiles (FCA) became the first U.S. automaker hit with emissions cheating claims when it was sued by customers alleging their Dodge trucks have deceptively dirty engines.
A lawsuit accuses Dodge of breaking emissions laws and covering up the problem.
According to a lawsuit filed in Detroit, nearly 500,000 Dodge Ram diesel pickups from 2007 – 2012 emit nitrous oxide (NOx) pollutants as much as 14 times higher than the legal limit. Chrysler and its diesel partner Cummins Inc. are accused of concealing from the public an engine feature that does not break down NOx properly, allowing excess gasses to escape.
Not only does the flaw nearly double emissions, the lawsuit claims, it also reduces fuel efficiency and places excessive strain on the catalytic converter.
Chrysler and Cummings are accused of knowing about but not disclosing the engine flaws. The lawsuit says the alleged fraud resulted from the companies’ attempt to get out ahead of a 2001 regulatory change that cracked down on emissions standards for heavy-duty diesel engines. Their aggressive development efforts, owners say, caused the fraudulent design.
“We believe we have uncovered a deeply entrenched scheme,” said a plaintiffs’ lawyer.
Chrysler and Cummins deny any wrongdoing in the case.
Is Diesel Dead?
Whatever the outcome, the lawsuit casts further doubt on the concept of “clean diesel” technology and the reliability of emissions testing. Diesel cars made by Mercedes Benz, Renault, Nissan, Hyundai, Fiat, Volvo, Jeep, Mazda, and other automakers have all been accused of emitting significantly more pollution on the road than in the lab.
Diesel vehicles, which get better gas mileage than gasoline vehicles but produce more NOx, are more popular in Europe, where NOx standards are less strict. Only about 5 percent of U.S. passenger vehicles are diesel, compared to 80% in Europe.
The VW emissions cheating scandal (coupled with low gas prices) has fueled speculation that the U.S. market for diesel is dead, except for trucks.
A 50-year-old woman killed in a California car crash is the eleventh U.S. victim of exploding Takata airbags, which have now claimed at least 16 lives worldwide.
The victim died driving a 2001 Honda Civic that federal regulators warned in June has airbag inflators with a 50% chance of rupturing during a crash. Despite the warning, less than five percent of the most dangerous Honda vehicles have been repaired.
ClassAction.com urges drivers to check the status of their airbags and to make needed repairs as soon as possible. We also encourage you to get in touch with us and report possible injuries related to a defective Takata airbag.
Delia Robles of Riverside County in Southern California was reportedly driving to get a flu shot when she was involved in a fender-bender with a pickup truck.
The victim’s son, who is considering a Takata lawsuit, told a local news station his mother was driving 25 mph at the time of the crash.
“My mom was a very safe driver,” he said. “Seat belt was on, always.”
Ms. Robles’ death is the latest in a string of deadly crashes that has sparked the largest auto recall in U.S. history. Eleven U.S. deaths and 16 deaths worldwide, in addition to hundreds of injuries, are blamed on Takata airbags. The airbags can deploy with excessive force, blowing apart the metal inflator housing and sending ragged shrapnel into occupants’ faces and necks.
Long-term exposure to heat and humidity destabilizes the airbag propellant ammonium nitrate, a volatile chemical also used in military-grade explosives. The National Highway Traffic Safety Administration (NHTSA) placed California in “Recall Zone A,” the most vulnerable region.
Honda at Center of Takata Controversy
Thirteen automakers are part of the massive Takata recall, but none has been implicated more severely than Honda.
Of the eleven U.S. deaths linked to Takata airbags, ten have occurred in Hondas. Nine of the eleven deaths have occurred in a small subset of 2001-2003 Honda and Acura vehicles, including the 2001 Honda Civic in which Ms. Robles was killed.
Of the eleven U.S. deaths linked to Takata airbags, ten have occurred in Hondas.
A June 2016 NHTSA safety bulletin reported that 313,000 older Honda and Acura cars have defective airbag inflators that are up to 50% likely to rupture in a crash. NHTSA instructed owners to stop driving them and immediately get repairs.
Four months later, however, just 13,000 (less than 5%) of the specified Honda and Acura cars have been repaired, according to The Detroit News.
Honda says Ms. Robles’ car was included in multiple recalls over the last several years and that it mailed at least 20 recall notices to the car’s registered owners.
Senator Bill Nelson (D-FL) blames Honda for not performing recall repairs quickly enough.
“No responsible automaker should be so slow in repairing defective vehicles where there’s up to a 50 percent chance a driver could be killed or seriously injured if an airbag deploys,” Senator Nelson said.
Honda has the highest overall airbag repair rate of any automaker, at over 45 percent. The worst repair rate belongs to General Motors (0.17%).
Honda says it has parts ready to repair all defective airbags, and that if there is a wait for the replacement part, dealers will offer a loaner or rental car free of charge.
Automakers Have Trouble Tracking Down Owners
Low recall repair completion rates plague the auto industry as a whole. A Forbes report notes that 45 million vehicles recalled from 2013 to 2015 have yet to be brought in for covered repairs.
Used cars such as Ms. Robles’ Honda Civic often slip through the recall cracks.
Part of the problem has to do with the difficulty of tracking down owners in a highly mobile society, especially the owners of older vehicles that have changed hands repeatedly. Used cars under recall bought at new-car dealerships are typically required to be repaired, but not cars bought from used-car dealers.
The New York Times reports that Ms. Robles’ Civic was sold three times at auction before her son purchased it from an acquaintance.
The NHTSA is now considering a rule requiring recall notices to be delivered through email and text messaging. The agency does not have the authority to order recalled vehicles off the road.
To find out whether your vehicle is recalled for any issue, visit safercar.gov and input a VIN number.
Self-driving cars are no longer a dream of the future. Although still in its infancy, on-road vehicle automation technology grows by leaps and bounds each year, and governments and private companies agree that the eventual transition to cars without human drivers is all but inevitable.
“Self-driving cars have gone from sci-fi fantasy to an emerging reality.”
That doesn’t mean the shift to driverless cars will be seamless. Automated vehicles from multiple companies have been involved in accidents, including a deadly Tesla crash in May. There are also numerous questions about privacy, regulation, insurance underwriting, and liability.
A future where software and hardware make more driving decisions could let people off the hook for crashes. But will automakers step up and pay for damages—or will they try and pass the blame to another party?
These are some of the issues ClassAction.com will be keeping a close eye on in the months and years to come as we aim to keep people in the know.
President Obama recently wrote in a Pittsburgh Post-Gazette op-ed that, “self-driving cars have gone from sci-fi fantasy to an emerging reality.”
That reality is seen in the efforts of automakers such as Ford, Volvo, and Tesla—as well as tech companies like Google, Apple, and Uber—to roll out fleets of self-driving cars as soon as 2021.
In the same editorial, Obama announced a White House conference on October 13 in the Steel City to discuss new technologies and innovations. His administration has published a 15-point safety checklist it hopes automakers and tech companies will adopt before self-driving cars hit the road.
The incoming administration could have different policy goals for self-driving cars, but politics aside, the rising tide of autonomous vehicle technology makes it an issue that regulators can’t escape.
A Rush to Market?
Google, the leader in self-driving technology, has been working on autonomous cars since 2009. The company’s car program has already put nearly sixty self-driving vehicles on roads in four states and logged two million miles. Apple is also rumored to be working on its own self-driving car, while Uber and Lyft have plans to introduce driverless taxis. Lyft CEO John Zimmer boldly predicted, “By 2025, private car ownership will all but end in major U.S. cities.”
Ford and Volvo plan to mass-produce fully autonomous vehicles by 2021. Cars from Audi, BMW, Mercedes-Benz, Tesla, and other makers already feature sophisticated automation systems that can parallel park, follow a lead vehicle at a safe distance, and break to avoid collisions, among other features.
ClassAction.com attorney Mike Morgan, however, cautions that, in their zeal to become self-driving car market leaders, companies may not be focusing enough on big picture safety.
“The most dangerous part of self-driving cars is the rush to market,” said Morgan. “Everyone wants to be first to sell the most cars but the truth is the technology they are using is going to lead to catastrophic results.”
Degrees of Automation
In terms of legal repercussions, the distinction between fully autonomous and semi-autonomous technology is a significant one.
In the former, an automated driving system performs all driving tasks under all conditions. Such vehicles—which are still years away—would not even have a steering wheel.
Semi-autonomous vehicles, on the other hand, require some level of driver engagement, depending on the system capabilities. Tesla Motors Inc.’s Autopilot is a semi-autonomous feature that can control the car in certain conditions. Similar systems are planned for 2017 General Motors and Volvo vehicles as luxury options.
The Society of Automotive Engineers (SAE) developed standards for driving automation levels, ranging from 0 (no automation) to 5 (full automation). Tesla’s Autopilot—blamed for a deadly crash earlier this year—is officially Level 2.
Countdown to the Driverless Future
Experts disagree on when autonomous vehicles will become mainstream. The Insurance Institute for Highway Safety (IIHS) estimates that there will be 3.5 million self-driving vehicles by 2025, and 4.5 million by 2030, although it cautions that the vehicles will not be fully autonomous.
A majority of autonomous vehicle experts surveyed by technical professional organization IEEE said they expect mass-produced cars to lack steering wheels and gas/brake pedals by 2035.
While a future of self-driving cars seems certain, there are roadblocks to their widespread adoption. The same IIEE survey that asked experts when autonomous cars might be widespread also asked about potential obstacles. Leading responses included legal liability, policymakers, and consumer acceptance.
Tesla Autopilot Mishap Could Spell Legal Trouble
A lawsuit over the deadly Tesla accident in May, in which a man’s autopilot did not recognize a tractor trailer turning in front of his Model S and his car smashed into it, is a strong possibility.
Tesla maintains, “Autopilot is an assist feature. You need to maintain control and responsibility of your vehicle.” But ClassAction.com attorney Andrew Felix counters, “Even the term ‘autopilot’ was used to coerce customers into a false sense of confidence and safety while this technology is still in its infantile stages.”
Tesla has not gone so far as to blame the man for the deadly crash. Should Tesla do so in the context of litigation, several legal arguments would be available to his family. But how they’d apply under the circumstances remains unknown.
“This is all new territory technologically and legally as well,” said Harvard Law School professor John C.P. Goldberg. “There are well established rules of law but how they apply to the scenario and technology will have to be seen.”
Volvo Promises to Assume Accident Liability. Will Others Follow Suit?
In the Tesla example, liability could come down to onboard vehicle log data. But semi-autonomous cars, which need some driver input, are very different from fully autonomous cars that assume little or no driver responsibility.
“Existing liability frameworks are well positioned to address the questions that will arise with autonomous cars.”
Legal experts generally agree that carmakers will assume blame for crashes when a computerized driver completely replaces a human one. For its part, Volvo has promised to assume full accident liability whenever its cars are in autonomous mode.
John Villasenor, a professor at UCLA and author of the paper, “Products Liability and Driverless Cars,” is confident that minor, sensible tweaks to current laws—not broad new liability statutes—will ensure that manufacturers are held accountable. “Existing liability frameworks are well positioned to address the questions that will arise with autonomous cars,” he told IEEE Spectrum.
A Bigger Slice of a Smaller Pie
Although this framework would seem to spawn a mountain of litigation for carmakers, the upshot is that automated technology is expected to drastically decrease accidents, the vast majority of which are caused by human error. After all, automation has already made cars safer. Electronic stability control systems, for example, have saved thousands of lives.
“From the manufacturer’s perspective,” according to tech policy expert and USC professor Bryant Walker Smith, “what they may be looking at is a bigger slice of what we all hope will be a much smaller [liability] pie.”
But what if the driverless technology is forced to make a decision between, say, crashing into a barrier and killing the car’s only occupant, or running over a pedestrian to avoid a crash?
New Age, Age-Old Dilemma
This is the type of scenario a game developed at MIT asks in a variation of the classic “trolley problem” thought experiment, which poses the following moral quandary: a runaway trolley is heading towards five unsuspecting workers. Do you pull a lever, sending the trolley down a different track where there’s only one worker, or do you do nothing and let it kill five?
MIT, in its “Moral Machine” game, presents people with a self-driving car with failed brakes and asks them to make a choice: swerve or stay straight; hit legal pedestrians vs. jaywalkers; hit a boy or an elderly man; etc.
That an autonomous car algorithm might have to make such a life and death decision shows how technology’s intersection with humanity is never black and white—or certain.
Lawmakers Forced to Play Catch-Up
Technology moves faster than the law and ethics.
In the first decades of the 20th century, when the number of cars on roadways exploded, there were no traffic laws, traffic signs, lane lines, or licensing requirements. The speeding vehicles terrified horses and ran over thousands of unaccustomed pedestrians, leading the state of Georgia to classify automobiles as “ferocious animals.”
Slowly, though, as the automobile became a staple of American life, governments figured out sensible legal solutions to the hazards cars were creating. A similar trajectory seems likely in response to whatever unintended consequences self-driving cars bring.
With the speed of technological change these days, the time may not be far off when human-driven cars are as quaint a concept as horse-driven carriages are today. Indeed, given the breakneck pace of innovation, the ink may not be dry on self-driving car legislation before lawmakers are grappling with flying cars.
Through all the changes, count on ClassAction.com to keep you up to speed.
GM Recalls 4.3 Million Vehicles Over Safety Defects
General Motors announced on September 9 that it will recall 4.3 million vehicles over a software defect that can prevent frontal airbags and seat belt pretensioners from deploying in a crash. The defect, which increases the risk of injury to the driver and front passenger, is blamed for at least one death and three injuries.
A letter from the National Highway Traffic Safety Administration (NHTSA) to GM says that “certain driving conditions may cause the sensing and diagnostic module that controls airbag deployment to activate a diagnostic test” which keeps safety equipment from working in the event of a crash.
Affected vehicles include the 2014-2017 Chevrolet Silverado, Chevrolet Tahoe, Chevrolet Corvette, Chevrolet Spark, GMC Suburban, GMC Sierra, GMC Yukon, Cadillac Escalade, Buick Encore, and Buick Lacrosse. A full list of recalled vehicles is available here.
GM says it will notify owners of the defect and that software updates will be performed free of charge at dealerships.
GM Asks for One-Year Delay on Takata Recall
The issue continues a recent trend of airbag-related issues for GM. In 2014 the automaker recalled more than 2.5 million vehicles over an ignition switch defect that led to airbags not deploying in some crashes. And earlier this year, GM recalled 2.5 million vehicles as part of the massive Takata airbag crisis.
But GM recently filed a request with the NHTSA for a one-year delay of the recall of almost one million Takata airbags, which GM claims are “not currently at risk of rupture.”
Citing “unique design features” that make the airbags in 980,000 pickups and SUVs safer than other Takata airbags, GM has asked that these vehicles not be recalled until the end of 2017, instead of the currently proposed end of 2016. In its NHTSA filing, GM cites internal testing that allegedly showed zero airbag ruptures out of 44,000 deployments.
Through September 9, GM had a Takata airbag repair rate of 0.17%.
Takata airbags, which have been blamed for 14 deaths and more than 150 injuries, are being replaced as part of the largest auto safety recall in U.S. history. Through September 9, GM had a Takata airbag repair rate of 0.17% according to safercar.gov.
Fiat Chrysler Recalls 1.9M Vehicles
Fiat Chrysler will recall 1.9 million vehicles, including 1.4 million U.S. vehicles, for an airbag sensor defect similar to the one plaguing GM vehicles.
The Fiat Chrysler defect involves a control module and front impact sensor that can prevent airbags and seatbelt pretensioners from deploying in some collisions. Fiat Chrysler says it no longer uses the controllers or wire routing design blamed for the defect.
Impacted vehicles include 2010-2014 Chrysler Sebring, Chrysler 200, Dodge Caliber, Dodge Avenger, Jeep Patriot, and Jeep Compass. Recall repairs have not yet been finalized.
“There is a hypersensitivity now in the industry to vehicle safety,” Scott Upham of Valient Market Research told Reuters, adding that there’s “a fine line between telling the bag when to deploy or not” in certain situations.
But as vehicles increasingly rely on sophisticated electronics, there are more and more “fine lines” that can lead to devastating errors.
Fiat Chrysler Faces Jeep Rollover Lawsuits
One such electronic miscue is allegedly responsible for Jeep Grand Cherokees slipping out of gear and rolling over owners. A runaway Jeep killed actor Anton Yelchin at his Los Angeles home in June, and two recent lawsuits claim that Jeeps similarly ran over stopped drivers.
A New Hampshire woman claims that she placed her 2014 Jeep Grand Cherokee in “park” and had exited the vehicle with her daughter when it began rolling in reverse down a residential street. As she attempted to stop the Jeep, the vehicle reportedly knocked her face-first to the ground and ran over both her legs. She has filed a lawsuit against Chrysler Fiat, the maker of Jeep.
Another runaway Jeep is alleged to have injured a Virginia grandmother while she was stopped at the end of her driveway placing mail in the mailbox with the Jeep in “park.” After rolling over her feet and ankles, the Jeep crashed into a parked school bus, according to the lawsuit she filed against Fiat Chrysler.
Both women claim Fiat Chrysler failed to warn about the gearshift problem. Jeep rollover lawsuits have also been filed in Colorado and Massachusetts.
Gear Shift Design Linked to Hundreds of Crashes
Fiat Chrysler issued a voluntary recall of more than 800,000 U.S.-sold Dodge, Chrysler, and Jeep vehicles equipped with electronic shifters in April 2016 following an NHTSA investigation that concluded the gear shift design is “not intuitive” and could lead to drivers exiting a vehicle that is still in gear.
Electronic gear shifters in these vehicles are tapped into gear, rather than the shifter being moved into a grooved position. Fiat Chrysler said in June that the recalled vehicles are linked to hundreds of crashes and property damage reports, in addition to more than 40 injuries.
A proposed class action lawsuit on behalf of Jeep Grand Cherokee owners accuses Fiat Chrysler of concealing the gear shifter problem and inadequately addressing it through the recall.
To report an airbag malfunction or vehicle that slipped out of gear, get in touch with ClassAction.com.
Stephanie Erdman’s life was changed forever on September 1, 2013. That’s when a car suddenly swerved in front of her 2002 Honda Civic, causing Erdman’s car to collide with the other driver’s.
When her Takata airbag deployed, metal shrapnel shot through the airbag and embedded itself in Erdman’s right eye and neck.
“I was instantly blinded on my right side. And then I felt gushing blood.”
“I was instantly blinded on my right side,” she testified during a November 2014 Senate hearing on Takata airbag defects. “And then I felt gushing blood. It was terrifying. I thought I was going to bleed out.”
The accident occurred along Highway 98 outside of Destin, Florida. Erdman, a first lieutenant in the United States Air Force, was traveling from nearby Eglin Air Force Base, where she was stationed at the time.
Erdman came to Florida by way of Bexar County, Texas. She is a graduate of the University of Texas system as well as an ROTC graduate. Eglin was one of her first duty stations as a member of the Air Force. There she worked as a compliance and testing officer in the Air Force Testing and Evaluations Command.
Erdman bought her 2002 Civic from a Honda dealership in Bexar County. She was on her way to the grocery store when her Takata airbags exploded on that fateful September afternoon.
Stephanie Erdman gives a statement on Takata airbags to the Senate Commerce, Science & Transportation Committee
No Warning About Airbag Defect
Stephanie Erdman’s Civic had characteristics that made it particularly vulnerable to a Takata airbag explosion, but she was completely unaware of the risk. In fact, Erdman had no idea that Takata had even issued a recall.
“They never told me about the recall,” she said. “They never performed the recall repair on my vehicle. And they never warned me about what might happen if my air bag deployed.”
“They never told me about the recall. They never performed the recall repair on my vehicle.”
The vehicle was owned and operated in two states—Texas and Florida—that the National Highway Traffic Safety Administration (NHTSA) considers to be in “Zone A,” or high heat and humidity areas.
Moisture and temperature are blamed for degrading the Takata airbag propellant ammonium nitrate, leading to overly forceful deployments that tear the metal airbag housing and spray shrapnel into the cabin.
Long-term exposure to the high heat and humidity typical of Zone A is associated with a higher risk of Takata airbag failure, which is why the NHTSA prioritized the Takata recall for this region.
Erdman’s vehicle also belonged to a subset of Honda and Acura vehicles with Takata inflators that are up to 50% likely to rupture during deployment.
Dealership Repeatedly Failed to Replace Airbags
Erdman couldn’t possibly have known at the time of her September 2013 accident that the airbag in her Civic had a 50/50 chance of a rupture, as the NHTSA did not announce this finding until June 2016.
Yet as Erdman explained to the Senate Committee on Commerce, Science and Transportation, she took her Civic to the dealership for service three times after the dealership received the recall notice for her car. They never replaced the airbags.
Erdman did eventually receive notification directly from Honda about the defective Takata airbag. A message was left on her phone on September 4, 2013—three days after her accident.
Since her accident, Stephanie Erdman has undergone multiple surgeries and physical therapy.
“My vision will never be the same,” she told the Senate Committee. “I will never be the same.”
Despite the physical and mental scars, Erdman acknowledges that things could have been a lot worse. The gruesome pictures of her post-accident injuries show Erdman with a piece of metal embedded in her bloodied face. People wonder how she survived the accident.
Others have not been so lucky. At least 14 people have been killed and more than 150 injured by exploding Takata airbags. These tragic incidents have spawned numerous Takata airbag lawsuits.
Erdman recognized the “many people, along with their families and friends, who have suffered because of these deadly airbags” during her Senate testimony.
In her closing thoughts to the Committee, Erdman, holding back tears, asked that the committee “do everything in its power to make sure that each and every vehicle affected by this defect is made safe.”
Three years after Stephanei Erdman’s airbag nearly killed her, only slightly more than half of recalled Takata airbags have been repaired.
From January to June, the company recorded losses of $1.2 billion. (In 2015, Uber lost $2 billion.)
In July, after two years and two billion dollars lost in China, Uber bowed out of the country, selling its operations there to hated rival Didi Chuxing.
On August 18, a judge rejected the $100 million settlement Uber had reached with drivers in California and Massachusetts over their independent contractor misclassification. Two weeks later, The Wall Street Journal reported that Google would launch its own ride-sharing service via popular route-finding app Waze.
From January to June, Uber recorded losses of $1.2 billion.
Finally, in October, New York’s Department of Labor ruled that Uber drivers are employees—a ruling echoed later that month by three London judges.
Oof. Even for The Most Valuable Startup in the World, that has to hurt.
It would be hyperbole to say that Uber is in danger of failing. (A $62 billion valuation affords at least a little security.) But, unlike a year or even six months ago, one can now conceive of a world in which Uber falters.
Here are the three greatest threats to the ubiquitous ride-sharing service.
Uber faced 50 federal lawsuits in 2015: more than Lyft, Instacart, Handy, and Airbnb combined. They outpaced these other gig economy companies in 2014, 2013, and 2012 as well.
They have fought more legal battles than billion-dollar startups Snapchat, Pinterest, WeWork, Dropbox, SpaceX, and Palantir (whatever that is). And the end is nowhere in sight.
In April 2016, a $100 million settlement was reached in two class action Uber lawsuits representing 385,000 drivers in California and Massachusetts.
Scores of drivers filed objections to the deal, which they considered unfair. The lead plaintiff, driver Doug O’Connor, fired his attorney. In a formal objection filed with the court, Mr. O’Connor said that the deal “is not in my interest or in the interest of any Uber driver.”
U.S. District Judge Edward Chen agreed. On August 18, 2016, he rejected the Uber settlement, saying it was not “fair, adequate, and reasonable” for drivers. (These cases will now go to arbitration.)
Judge Chen noted that the amount offered to drivers was just ten percent of what the Uber lawsuit claimed drivers were owed: $1 billion.
Dozens of Uber lawsuits are still pending in courts nationwide. In addition to monetary losses, Uber should dread the potential of a judge ruling that Uber misclassifies its employees as contractors.
In his decision, Judge Chen also emphasized that under the terms of the settlement Uber would pay just $1 million in state penalties—which could otherwise total more than $1 billion.
Two weeks later in Pennsylvania, a state regulator reinstated an $11.4 million fine against Uber for exactly these kinds of penalties. This fine arrived about six months after California’s Public Utilities Commission (CPUC) hammered Uber with a $7.6 million fine for shirking state regulations.
The Pennsylvania Public Utility Commission (PUC) says that Uber operated illegally in the state from February to August 2014, providing almost 123,000 rides without state approval. According to the PUC, Uber also obstructed the state’s investigation into its dealings.
Two judges originally set the fine at $49.9 million, but the PUC reduced the total to $11.4 million—against the wishes of state officials.
Uber vowed to appeal, calling the fine “absurd.” But decisions like the PUC’s and CPUC’s often establish a precedent. What is to stop the other 48 states from issuing similar (or even higher) fines?
Moreover, as Uber knows all too well, global expansion is expensive. The startup has met resistance in Australia, Belgium, Brazil, Denmark, France, and countless other countries. Adapting to each nation’s unique laws, waging lengthy legal sieges, and fighting taxi unions costs a lot of money.
In China, Uber tried for two years to make it work. After $2 billion in losses, they threw in the towel.
In May, Google launched an exclusive carpooling service in the Bay Area. Now, through the Waze app, Google is expanding that soft opening so that anyone in San Francisco or Oakland with Waze can request a ride.
The service costs a maximum of just 54 cents per mile, far cheaper than Uber or Lyft. Though it is currently just a carpooling service, presumably Waze will broaden its offerings to include the kinds of on-demand rides made famous by Uber and Lyft.
And like Uber, Waze may not need drivers to do so.
Google’s Self-Driving Car Project (developed by Google X) has been in the works for a decade, with the aim of releasing these cars into the wild in 2020.
It is easy to envision, then, a scenario in which Google/Waze spends the next four years building a ridesharing infrastructure and customer base across the country, and then replaces at least some of its drivers with driverless cars—which would save it a bundle.
In the meantime, Google can learn from Uber’s mistakes and either classify its (human) drivers as employees or offer them similar reimbursements, tips, and other employee rights that Uber has failed to deliver. Because Uber has already waded through so much thorny legal territory (and continues to do so), Waze’s path should be much clearer and smoother.
Uber is the most valuable startup in the world, but Google’s parent company Alphabet Inc. is The Most Valuable Company in the World, with a market value of $546.50 billion: nine times that of Uber.
Uber is a giant, but Google is a god. It has several advantages over Uber (money, branding, experience) and could very well take the startup down—or, more likely, over—in the long run.
When rescue personnel arrived at the scene of a minor California car accident in 2013, they thought that the driver had been shot in the face.
The following year, police responding to a Florida fender-bender were convinced that the driver’s neck wounds were the result of a stabbing.
In both cases, the source of the gruesome injuries turned out to be not an assailant, but a defective Takata airbag.
“Regardless of how or why your crash happened, Takata and the automobile company are at fault for a defective and deadly airbag.”
ClassAction.com wants to remind drivers that even if they were at fault for an accident, Takata is ultimately responsible for defective airbags that spray metal shrapnel into the cabin when they explode.
“Airbags are intended to save lives—not threaten them,” said Andrew Parker Felix, a Morgan & Morgan products liability attorney who has successfully handled a number of defective Takata airbag cases across the country. “Regardless of how or why your crash happened, Takata and the automobile company are at fault for a defective and deadly airbag that causes cuts or slices from metal shrapnel to the car’s occupants.”
A 51-year-old Orlando woman suffered deeps cuts on her neck that, according to the crash report, “were not consistent with crash injuries.”
No windows were broken in the vehicle that might have caused sharp glass to cut her. It was only after cross-referencing similar crash reports and hitting on the Takata link that investigators concluded the slice wound to her trachea had been caused by metal airbag shrapnel. The Takata airbag had exploded with such force out of the steering column that its shards also sliced off the turn signal lever.
“It’s not the typical injuries you see from an airbag,” said Chief Medical Examiner Dr. Jan Garavaglia. “It’s the internal parts of the airbag tearing through that caused the injuries.”
Takata airbags are far from typical. Blamed for 14 deaths and hundreds of injuries, Takata airbags are the only airbags that use the volatile chemical ammonium nitrate. The chemical propellant can destabilize in the presence of heat and humidity, leading to forceful airbag deployments that rip open the metal inflator housing, sending shrapnel into the faces, necks, and chests of passengers.
“Even in low-impact crashes, the Takata airbag defect is causing lethal injuries to drivers and passengers,” said products liability attorney Andrew Parker Felix.
Some Drivers Blinded by Shrapnel
Airbag injuries, while not uncommon, usually take the form of blunt trauma as the airbags deploy with such force that they cause bruises, abrasions, sprains, fractures, and concussions.
Takata airbag injuries are categorically different. Victims have reported deep facial or body lacerations that require stitches, as well as scarring to the upper body, arms and legs. Drivers have lost their vision from jagged pieces of metal shrapnel. Shrapnel from a Takata airbag became so deeply embedded in one woman’s breast that it wasn’t discovered until four months later after causing an infection. And the metal shards have even caused death by severed arteries. One woman bled to death in front of her children after airbag shrapnel struck her neck and chest.
Stephanie Erdman was blinded in her right eye by Takata airbag shrapnel
Such injuries are more consistent with the battlefield than the roadway. Takata, however, used ammonium nitrate in its airbags, which is also used to make military explosives and homemade bombs, like the one used in the Oklahoma City bombing.
Which begs the question: What is a chemical nearly as powerful as dynamite doing in tens of millions of vehicles?
NYT: Takata Manipulated Data and Cut Corners to Save Money
An investigation by the New York Times reveals that Takata introduced ammonium nitrate to its airbag inflators as a way to save on production costs.
“When we lit it off, it totally destroyed the fixture. It turned it into shrapnel.”
A handful of manufacturers that includes Takata and Swedish-American Autoliv controls the worldwide automotive airbag market. When Takata in the late 1990s hit on a new inflator design that was up to 30 percent cheaper compared to Autoliv’s inflator, Autoliv scientists were tasked with studying the Takata design. Their tests of an ammonium nitrate inflator proved explosive.
“When we lit it off, it totally destroyed the fixture,” one of the scientists told the Times. “It turned it into shrapnel.”
Heat and humidity destabilize ammonium nitrate and make it even more volatile. An airtight inflator is one possible workaround to this problem, but the Times, citing a former Takata engineer, says Takata manipulated test data that showed leaky inflators in order to get the defective airbags to market. The engineer reportedly confronted Takata about the phony results in 2001 and was subsequently fired. Takata first announced the airbag fault in 2013.
You May Have a Case Even if the Accident Was Your Fault
Even if the accident was completely your fault, this does not excuse Takata and automakers from using a defective, dangerous, and explosive airbag design.
Andrew Felix stresses that he’s negotiated settlements for a number of clients injured by Takata airbags who were at fault for their crash.
“If you didn’t pursue a lawsuit because you were texting, intoxicated, asleep behind the wheel, or any other reason having to do with your own fault, you may still be able to bring a claim for the defective Takata airbag,” Felix said.
To find out whether you have a case, contact ClassAction.com for a no-cost, no-obligation case review.
In May 2004 a Takata airbag inflator ruptured in a 2002 Honda Accord in Alabama, sending out metal fragments that injured the driver.
There’s a 50% chance that the airbag inflators in these vehicles will rupture during a crash, putting passengers at risk of serious, potentially fatal injuries.
At the time, Honda and Takata told the National Highway Traffic Safety Administration (NHTSA) that the rupture was an anomaly. More than 12 years later, with Takata and Honda at the center of the largest recall in U.S. history, the exploding airbag incident from 2004 has proven to be anything but anomalous.
To date, defective Takata airbags have been blamed for 10 deaths and more than 150 injuries in the United States. Of the 10 U.S. deaths linked to shrapnel-spraying Takata airbags, 9 have occurred in Hondas. And 8 out of the 10 deaths have occurred in a small subset of 2001-2003 Honda and Acura vehicles. Those vehicles are:
2001-2002 Honda Civic
2001-2002 Honda Accord
2002-2003 Acura TL
2002 Honda CR-V
2002 Honda Odyssey
2003 Acura CL
2003 Honda Pilot
There is a 50% chance that the airbag inflators in these vehicles will rupture during a crash, putting passengers at risk of serious, potentially fatal injuries.
NHTSA is urging owners of these Honda and Acura vehicles to not drive them unless they’re going straight to a dealer for airbag repairs.
If you own one of the vehicles listed above and the airbag deployed for any reason, resulting in cuts or lacerations from airbag shrapnel, you may have a case against Takata and Honda. To learn more, schedule a free case review with ClassAction.com.
Takata-Equipped Hondas Still on the Road, Still Causing Deadly Injuries
Honda is the automaker most affected by the Takata recall. Of the fourteen auto manufacturers that have recalled about 28 million inflators in 24 million vehicles, Honda has recalled approximately 12 million inflators in 8.5 million Honda and Acura vehicles.
To its credit, Honda has (as of August 12, 2016) repaired nearly 40% of its vehicles with recalled airbags—better than any other automaker. It has also made a strong effort to notify all affected owners of the recall, using email, social media, phone calls, and targeted advertising in addition to mailed notifications.
But not all customers are getting the message. On March 31, 2016 a Fort Bend County, Texas teenager was killed in a 2002 Honda Civic after running into the car in front of her, triggering a Takata airbag explosion that sent a metal fragment into the side of her neck.
Sheriff’s Deputy Danny Beckworth, who investigated the deadly accident, described the crash as moderate and said it wouldn’t have caused any serious injuries if not for the Takata airbag.
“It’s a crash that we work with every day that everybody walks away from,” Beckworth said.
According to Honda, the 2002 Civic had been recalled numerous times since 2011. The company said recall notices were sent to registered owners, including the current owner, a member of the victim’s family, but repairs were never performed. The family has filed a Takata airbag lawsuit.
Senator Bill Nelson of Florida said in a statement the young woman’s death “shows that the current recall efforts are just not getting the job done. Takata and the automakers have to step up their efforts to locate, notify, and fix every impacted car as soon as possible—before anyone else dies.”
Nearly two months to the day after the deadly Texas crash, NHTSA issued a safety bulletin addressing the catastrophic failure rate of Takata airbags in certain model-year 2001-2003 Honda and Acura vehicles.
According to NHTSA, a manufacturing defect in the airbag inflators of these cars creates a 50% chance of an inflator rupture during a crash. The vehicles in question were recalled between 2008 and 2011 but NHTSA reported on June 30 that repairs still had not been made to 313,000 vehicles with this dangerous defect.
The chances of a Takata airbag rupture are particularly high in Florida, Texas, Southern California, and other high humidity areas. Humidity can degrade and destabilize the chemical propellant ammonium nitrate (which creates a small explosion that fills air bags in a crash), leading to an excessively forceful explosion that can blow apart the metal airbag inflator and send shrapnel at occupants.
General Motors can’t avoid lawsuits over its deadly ignition switch defect that were previously barred by the company’s 2009 bankruptcy sale, a federal appeals court has ruled, giving new life to hundreds of claims that could be worth up to $10 billion.
“Old GM did nothing, even as it knew that the ignition switch defect impacted consumers.”
The U.S. Second Circuit Court of Appeals ruling overturns a lower court decision that the 2009 bankruptcy sale that transformed “Old GM” into “New GM” shielded the automaker from ignition switch lawsuits that arose prior to the restructuring. But GM’s failure to disclose the ignition switch defect prior to bankruptcy led to a dispute about whether victims’ constitutional right to due process had been violated. According to the Second Circuit ruling, the timing of GM’s disclosure denied victims the right to challenge the sale prior to its approval, and thus they can’t be bound by sale order provisions that protect GM from litigation.
“While the desire to move through bankruptcy as expeditiously as possible was laudable, Old GM’s precarious situation and the need for speed did not obviate basic constitutional principles,” said the court. “Due process applies even in a company’s moment of crisis.”
After the court’s decision, previously disallowed ignition switch injury and death claims as well as cases alleging lost vehicle value stemming from the ignition switch recall are back on the table. The total value of the new claims is estimated by the court at $7 to $10 billion. GM has already paid more than $2 billion in connection with the recall scandal, including more than $1 billion to resolve injury and death claims.
Was Bankruptcy an Attempt to Cover up Ignition Switch Flaws?
Some GM plaintiff lawyers believe that Old GM filed for bankruptcy to cover up its knowledge of the ignition switch defects that prompted a 2014 recall of 2.6 million cars.
“The appeals court ruling today solidifies something that we have known from the very beginning of this suit—GM’s bankruptcy filing was a calculated move in its effort to conceal and cover-up its actions,” said one attorney.
The 2nd Circuit Court said that Old GM knew or should have known about the defect, which caused a loss of power and key safety equipment such as airbags. At least 124 deaths and 275 injuries are linked to the faulty part.
“At a minimum, Old GM knew about moving stalls and airbag non-deployments in certain models, and should have revealed those facts in bankruptcy,” the court said.
GM admitted to the Justice Department that it knew of the ignition switch defect since 2005 and hid it from regulators from 2012 to 2014. An internal GM audit shows that the defect was detected by some in the company as early as 2001. GM issued a “technical bulletin” over the issue in 2005 but delayed issuing a recall for nearly a decade. A Wisconsin state trooper correctly linked a fatal 2007 crash to the ignition switch in a Chevy Cobalt and detailed his findings in a report he sent to GM. GM said it did not see the report until 2014.
Decision Could Impact Bellwether Trials
Law360 reports that the Second Circuit ruling could mean additional bellwether cases may need to be added to multidistrict litigation to reflect the influx of previously barred claims.
Bellwether cases are a small group of lawsuits representative of a larger group that are tried first and often help to shape the direction of a multidistrict litigation, or MDL. GM is facing hundreds of MDL claims over injuries and deaths in New York federal court. The company has prevailed in 4 of 6 bellwether trials to this point, but one of the criteria of those bellwethers is that the accident occurred after 2009.
Plaintiffs may now be able to argue that the Second Court’s ruling allowing post-2009 ignition switch crashes makes the trial pool unrepresentative of the overall claims landscape, and that new bellwethers should be added.
If the ruling stands, it could also make GM more prone to settle outstanding cases, rather than risk trial losses.
Was Your Pre-Bankruptcy Ignition Switch Claim Denied? You Might Have a Case.
While the full impact of the Second Court’s ruling on ignition switch claims remains to be seen, victims whose claims were not allowed under the previous bankruptcy protection ruling may now have a second chance at justice.
To learn more, contact ClassAction.com for a free case review.
Volkswagen and U.S. regulators have agreed to a $14.7 billion deal that will attempt to clean up the automaker’s dirty diesel scandal.
VW announced on June 28 that it will spend up to $10 billion to compensate owners of 2.0L TDI vehicles that were rigged to cheat on emissions tests. The diesel vehicles in question, when driven on the road, emit levels of nitrous oxide that exceed U.S. pollution standards.
The settlement provides 475,000 VW and Audi 2.0 TDI owners with the following:
A payment worth $5,100 to $10,000 per vehicle (based on car’s age and mileage)
The option to have their vehicle repaired for free, or to sell it back to VW
There are a couple of catches, however. For starters, a modification to bring the diesels into compliance with pollution laws has not yet been approved by U.S. authorities. In addition, assuming an appropriate fix is devised, it could affect vehicle performance. The Environmental Protection Agency (EPA) and the California Air Resources Board (CARB) will need to approve VW’s emissions modification before the option becomes available. One CARB official said he doesn’t believe VW will be able to completely fix the problem.
Under the proposed agreement, VW will also pay:
$2.7 billion into an “environmental remediation fund”
$2.0 billion to promote new zero-emissions vehicles in the U.S.
$603 million to 44 states, the District of Columbia, and Puerto Rico to settle consumer protection claims
A judge must approve the agreement at a July 26 hearing before the settlement program goes into effect.
Matthias Müller, CEO of Volkswagen, is optimistic that the agreement will repair damaged relations with American customers.
“We take our commitment to make things right very seriously and believe these agreement are a significant first step.”
“We take our commitment to make things right very seriously and believe these agreement are a significant first step,” said Müller. “We know that we still have a great deal of work to do to earn back the trust of the American people.”
Volkswagen shocked the world in September 2015 when it admitted to cheating on U.S. emissions tests. The Wolfsburg, Germany-based VW pulled off the mass deception by using software that could detect testing situations and make the engine run cleaner in the laboratory. Researchers discovered, however, that the TDI diesels emit nitrous oxides at levels up to 40 times the legal limit during real-world driving. This put VW at odds with U.S. pollution laws and left VW consumers fuming over their purchases of vehicles that did not come as advertised.
But assuming that the $14.7 billion settlements gets approved, VW is hardly out of the woods over “Dieselgate.” The Justice Department is gathering evidence for potential criminal charges, and VW still must deal with the overseas fallout of its emissions cheating. Then there is the hit to VW’s credibility with consumers and investors. The company reported a record loss in 2015, while earnings and sales are down in the first quarter of 2016.
Also left to deal with for VW are owner and dealership lawsuits. A lawsuit on behalf of more than 600 U.S. dealers seeks compensation for lost sales. Owners who choose to opt-out of the settlement agreement are eligible to pursue their own cases against the automaker as well.
Volkswagen expects that final approval of the settlement agreements will be granted in the fall of 2016 at the earliest. If preliminary approval is granted on July 26, owners and lessees will receive notice via mail providing specific settlement terms and their rights and options moving forward.
Questions About a VW Dieselgate Lawsuit? Contact ClassAction.com.
The proposed VW emissions cheating settlement DOES NOT mean that you can’t seek compensation through a lawsuit. Owners will have the option to exclude themselves from the settlement and pursue legal action against Volkswagen.
Automakers have not stopped placing recalled Takata airbag inflators in vehicles. Not only are new vehicles being equipped with defective airbags, but vehicles brought in for repairs are also receiving newer inflators with the same design as the older ones. Millions of these vehicles will be recalled within a couple of years, some for the second time.
According to a Senate Commerce Committee report released on June 1, Toyota, Volkswagen, Fiat Chrysler, and Mitsubishi continue to equip new vehicles with faulty Takata airbags that prompted the largest safety recall in history and are blamed for at least 13 deaths and more than 100 injuries.
Assuming that the airbags are safe—a dangerous assumption, given their association with deaths and injuries—consumers have the right to know about the defective part in their car.
Japanese auto parts supplier Takata is recalling more than 60 million airbag inflators in the United States due to concerns that a combination of heat, humidity, and time can degrade ammonium-nitrate (a compound which helps to inflate the airbag) and lead to excessively forceful airbag deployment that bursts the inflator casing, sending metal shrapnel at vehicle occupants.
Takata is permitted by federal regulators to equip vehicles in production with the defective airbags, but the vehicles will need to be recalled by the end of 2018. An even bigger problem is that automakers are not required to disclose the airbag issue to buyers.
“I find it bizarre on multiple levels,” Kelly Blue Book analyst Karl Brauer told the New York Times. “Multiple mainstream automakers essentially know that they are selling cars that already have a defective part in them. And it’s not a defective windshield wiper or sun visor hinge. It’s an airbag, a primary safety device.”
The National Highway Traffic Safety Administration (NHTSA) states that the new ammonium nitrate airbags don’t pose an immediate concern because the issue develops over a period of years. But even assuming that the airbags are safe—a dangerous assumption, given their association with deaths and injuries—consumers have the right to know about the defective part in their car.
“Shouldn’t we at least let the buyer know that they’re going to have an airbag that’s going to be recalled in two years if they’re purchasing a new car?” said Senator Bill Nelson, ranking member of the Senate Committee on Commerce, Science, and Transportation and author of the Committee’s June 1 report.
Nelson’s comment came as lawmakers questioned Transportation Secretary Anthony Foxx on June 8 during a Senate hearing. Foxx said that he agreed automakers should disclose whether new cars are equipped with faulty airbags but acknowledged he lacked the authority to make the disclosures a requirement. The Wall Street Journal reports that mandating the disclosures would require renegotiating recall terms with Takata.
Only Volkswagen and Mitsubishi provided any information about models containing recalled airbags. Volkswagen reported that the 2016 Volkswagen CC, 2016 Audi TT, and 2017 Audi R8 are equipped with the part, while Mitsubishi revealed that the 2016 and 2017 i-MiEV electric cars contain the risky airbags.
Toyota said it will produce about 175,000 cars with defective Takata airbags through 2017, but did not name which models are affected. Fiat Chrysler told the Senate committee that one current model uses an ammonium nitrate Takata airbag.
(UPDATE: Responding to Congressional criticism, Toyota announced that the following in production/in stock models are equipped with Takata airbags subject to future recall: 2016 Toyota 4Runner and Lexus GX460; 2015 Lexus IS250C/350C, Scion xB, Lexus GX460, and Toyota 4Runner.)
(UPDATE II: Fiat Chrysler said on June 22 that, by the end of the following week, it will no longer use Takata airbag inflators without protective drying powder in its North American vehicles. The 2016 Jeep Wrangler’s passenger-side inflator will be the final vehicle FCA makes with recalled Takata airbags. The automaker also said it will identify for customers which unsold vehicles have the faulty inflators.)
Faulty Inflators Also Being Placed in Recalled Vehicles
It’s not just new cars that are receiving ticking time bomb Takata airbags. Cars brought in for repairs as part of the massive recall are receiving ammonium nitrate replacement inflators as well—the very same inflators that caused the recall in the first place.
The Senate Commerce Committee report notes that “the majority of the replacement inflators installed in vehicles as of March 2016 are Takata’s ammonium-nitrate inflators.”
Recall completion rates range from .04% to 39.5% among 11 automakers.
Some of these replacement inflators contain a chemical drying agent (dessicant) that is supposed to fix the problem with Takata airbags. But more than 2.1 million replacement inflators installed in U.S. vehicles do not contain the drying agent, and these will need to be recalled by December 31, 2019.
NHTSA is requiring Takata to test the desiccated inflators, which may be recalled in the future if their safety cannot be demonstrated. No ruptures of desiccated inflators have been reported to date.
Part shortages are blamed for the use of defective airbags in new and older vehicles. Takata simply cannot keep up with massive demand for replacement inflators. The use of ammonium nitrate inflators is considered a short term solution.
Recall completion rates, which range from .04% to 39.5% among 11 automakers, remain “unacceptably low” according to Senator Nelson.
Were you or a loved one injured in a crash with a Takata airbag? Have questions about your rights and options? ClassAction.com can help.
Individual citizens aren’t the only ones fighting back against corporate irresponsibility.
In separate lawsuits that validate and strengthen thousands of plaintiffs’ cases, Hawaii and the Virgin Islands (a U.S. territory) have sued Takata and Honda over their failure to warn residents of fatally defective Takata airbags.
Likewise, Washington State and California have sued Johnson & Johnson for the company’s misrepresentation of the serious risks inherent in its vaginal mesh implants.
These state lawsuits serve as vindication for the thousands of individuals who have filed personal injury and wrongful death lawsuits against Takata, Honda, and Johnson & Johnson.
For each of these companies, these suits are the latest in a series of blows to its credibility, image, and potentially its financial future.
Takata, in particular, may never recover from its airbag scandal, which has cost at least 13 people their lives (and injured 100 more), cost roughly 77 million Americans their vehicles, and cost the company millions if not billions of dollars.
Johnson & Johnson now faces 35,000 lawsuits over its vaginal mesh implants alone – and tens of thousands more over its talc products and several of its prescription medications. “The Family Company” has paid billions in settlements over the past decade, and will likely owe billions more in the decade to come.
Florida, South Carolina Likely to Follow Hawaii’s Lead
The state alleges that Takata covered up a lethal defect and has demanded $10,000 for every affected resident.
Hawaii’s Director of Consumer Protection, Steve Levins, told The New York Times, “We’re not going to sit back and wait for more accidents to happen.” Levins added, “We’re also seeking that consumers be compensated for any losses associated with this incident, whether that’s alternative transportation costs, or a diminished value of their vehicle.”
Washington’s Attorney General, Bob Ferguson, said, “For many victims, their health and their quality of life were forever changed as a result of this deception. Sitting upright, lying on their side, walking all became incredibly painful… These women were robbed of their ability to live and work in the way they once did.”
Drug Companies Pay Billions in Settlements
In addition to its vaginal mesh implants and other products, Johnson & Johnson is also facing thousands of lawsuits over its Baby Powder’s links to ovarian cancer.
In February, a Missouri jury awarded the family of Jacqueline Fox $72 million in damages after Ms. Fox passed away from ovarian cancer. Ms. Fox had used Johnson’s Baby Powder for feminine hygiene for decades.
In May, a Missouri jury found in favor of Gloria Ristesund, who contracted ovarian cancer after using Johnson’s Baby Powder and Shower to Shower Powder on her pelvic area for many years. (As a result, Ms. Ristesund had to have a hysterectomy and other surgeries.) The jury awarded Ms. Ristesund $55 million.
Ride-hailing company Uber will pay $100 million to settle a pair of class action lawsuits in California and Massachusetts, but under the terms of the settlement drivers will remain independent contractors, not employees—a major win for Uber.
Under the settlement, Uber agrees to pay up to $100 million to 385,000 drivers in the two states, introduce a policy explaining the circumstances that will lead to drivers in these states being deactivated from the app, explain its decision to terminate drivers, give drivers more information about their individual rating and how it compares to their peers, and set up a driver’s association in both states. Drivers will also be permitted to post signs in their vehicles asking for tips. All of these concessions appease driver concerns.
“We believe the settlement we have been able to negotiate…provides significant benefits—both monetary and non-monetary—that will improve the work lives of the drivers and justifies this compromise result.”
Previously, Uber drivers could be deactivated from the app without much warning or recourse for declining a certain percentage of trips. As Tech Crunch notes, the new policy on accepting rides was likely key to the settlement, since requiring drivers to accept a certain percentage of trips could be seen as a job requirement appropriate for employees.
A new driver deactivation policy explains the circumstances in which drivers are denied access to Uber, and how (if at all) drivers can appeal a ban.
The attorney representing the Uber driver, Shannon Liss-Riordan, views the settlement as a victory for drivers. “We realize that some will be disappointed not to see this case go to trial,” Liss-Riordan said. “We believe the settlement we have been able to negotiate…provides significant benefits—both monetary and non-monetary—that will improve the work lives of the drivers and justifies this compromise result.”
Many experts, however, view Uber as coming out ahead in the settlement, because reclassifying drivers as employees would have forced Uber to pay for driver expenses and other job-based perks such as healthcare, costs that could have run into the billions of dollars and threatened the future prospects of the company’s high-margin business model.
The settlement must be approved by U.S. District Judge Edward Chen before it is binding.
While this particular deal applies only to drivers in California and Massachusetts, it should play a major role in determining the outcome of similar Uber litigation pending in other states.
Most Drivers Will Only Get $24 or Less From Settlement
$100 million sounds like a generous sum, but upon closer inspection, it turns out that the actual amount drivers receive could be as little as $10 in some cases.
To start with, the maximum value of the settlement is $100 million. Plaintiffs will receive an initial sum of $84 million, plus an additional $16 million if Uber goes public and its financial valuation increases 1.5x from its December 2015 valuation.
And according to MarketWatch, although some drivers may receive an $8,000 share of the settlement, most will get $24 or less, and some as little as $10. Payments will be calculated based on total miles driven, whether drivers signed an arbitration clause, whether they’re certified class members, and how many drivers actually file a claim. Named plaintiffs will receive an “enhancement” of up to $7,500.
Get Involved in an Uber Lawsuit
Uber class action lawsuits similar to those that just settled in California and Massachusetts are being filed nationwide. Drivers who think they aren’t being treated fairly by the tech company may be eligible to join an existing class action, or initiate one where they live.
Get answers to your questions about Uber lawsuits during a no-cost, no-obligation case review.
Volkswagen has announced the preliminary terms of a settlement that will provide owners of illegally polluting diesel cars the option to either sell them back to the automaker or have them repaired at no cost. Owners will additionally receive compensation as part of the deal.
Terms of the settlement, which apply to nearly approximately 480,000 2-liter diesel cars sold in the U.S., were announced last week by California District Judge Charles Breyer, who cautioned that negotiations are not yet final and set a June 21 deadline for the specifics of the proposed deal, according to the Associated Press. Once the paperwork is final, owners will have a chance to comment on the agreement before Breyer signs off on it.
Volkswagen said in a statement that it “intends to compensate its customers fully and to remediate any impact on the environment from excess diesel emissions.”
At this stage, however, there are still more questions than answers about how VW intends to do right by owners stuck with a car that emits nitrous oxide pollutants at up to 40 times the legal limit.
What’s known is that affected VW owners will be able to sell their cars back to the company or get them repaired at VW’s expense. Owners will also receive “substantial compensation,” Judge Breyer says. People who are leasing a VW diesel will be able to cancel their contract without penalty.
Still unknown is the amount owners can expect in a buyback, whether the proposed repairs will reduce vehicle gas mileage and/or performance (and if so, whether owners will be compensated for these outcomes), and when the program will begin. These considerations should be ironed out by Judge Breyers’ June 21 deadline.
Also undecided is the fate of about 90,000 3-liter, six-cylinder VW, Audi, and Porsche diesels that contain the emissions cheating software. Then there are the matters of how much VW will pay in government fines over Dieselgate and what impact the settlement will have on the hundreds of lawsuits VW is facing over the scandal. Some lawsuits, including those filed by state and local governments and Volkswagen dealers, are unlikely to be resolved by the settlement.
German newspaper Handelsblatt recently published an investigation that claims to show the emissions cheating software Volkswagen used was developed by Audi, reports Reuters.
The German paper says that engineers at VW’s Audi division developed the software in 1999 but never used it. VW engineers allegedly began to install the software when they could not make U.S. models compliant with stringent nitrous oxide emissions regulations.
As of now, it’s believed that Audi never used the defeat device found in VWs.
Amidst Scandal, VW Executives Take Home Millions in Bonuses
Analysts estimate that the total cost of the diesel emissions scandal for VW will be more than $43 billion. But in a move that should surprise nobody familiar with skyrocketing executive pay, VW executives who were in power when the scandal unfolded received massive bonuses, while workers face layoffs.
Martin Winterkorn, who served as VW’s CEO and board chairman from 2007 to 2015 and resigned shortly after VW admitted to rigging emissions tests, received €16 million ($18 billion) as board chairman in 2014. After Winterkorn stepped down, he demanded that his contract (salary plus bonuses) be honored to the end of 2016. The former top executive, who knew about diesel emissions manipulation since 2014, will receive several million euros, plus entitlements totaling €28 million ($31.5 million).
Another VW executive, Hans Dieter Pötsch, demanded and received a severance payment valued at up to €10 million ($11.3 million) when he left his finance chief post to become the chairman of VW’s supervisory board. Pötsch earned a €7 million ($7.9 million) salary as CFO.
There’s been talk of slashing bonuses for top VW executives as part of the Dieselgate fallout, but a recent BBC report, which says that VW will pay a dozen current and former senior managers $71 million for 2015, shows that this proposal needs to be put into perspective.
In the end, it may turn out that Volkswagen’s workers are the ones who pay the price for Dieselgate in the form of job cuts.
Own a VW Diesel? Get a Free Case Review.
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Mark R. Rosekind, the head of the National Highway Traffic Safety Administration (NHTSA), says that his family car has joined the ranks of the 29 million recalled American vehicles. But like millions of others, even Mr. Rosekind has to wait (and wait, and wait) for replacement parts to arrive before automakers can repair his wife’s vehicle.
“I now have that personal experience to be able to deal with it and see how we can push,” Mr. Rosekind told the Associated Press. “It is a source of information that probably typically is not available to an administrator facing something like this.” (Mr. Rosekind declined to identify the make and model of his wife’s car.)
In March, Toyota added 331,000 more vehicles to what is already the largest auto recall in American history. Worldwide, Toyota has now recalled 15 million vehicles—and that might just be the tip of the iceberg.
Incredibly, 90 million more vehicles could be affected by the Takata airbag safety issue, according to auto safety regulators. Senator Bill Nelson (D – Fla.), the ranking member of the Senate Commerce Committee, has taken Mr. Rosekind to task for not recalling every vehicle with an ammonium nitrate airbag. Mr. Nelson has also criticized Mr. Rosekind’s grasp of the Takata issue and relevant data.
The New York Times, which has played a key investigatory role in unraveling the Takata story, has called the airbag snafu “one of the country’s biggest consumer safety problems.” To date, the faulty airbags have caused at least ten deaths and 139 injuries.
Exploding Airbags Fire Shrapnel Into Drivers
Why are Takata airbags so volatile? Because they contain ammonium nitrate, a powerful chemical compound more commonly used as a mining explosive. The ammonium nitrate serves as a propellant, allowing the airbags to deploy in the event of a crash.
But in the faulty Takata airbags, the ammonium nitrate becomes unstable, causing the airbags to explode upon deployment. (There is an even greater risk of this happening in humid areas like Florida.) This explosion can break the metal inflators in the airbags and shoot pieces of shrapnel into the vehicle’s cabin, putting drivers and passengers at risk for serious injuries and death.
The injuries are so violent, in fact, that in the case of Hien Tran, detectives initially considered the incident a homicide due to the stab wounds in her neck. It wasn’t until a week later, when they found a letter from Honda in Ms. Tran’s mail, that they realized her Accord’s faulty airbags were responsible for the gashes. Ms. Tran passed away in October 2014—the third of at least ten deaths tied to Takata’s airbags.
What makes these deaths even more sickening is that Takata knew its product was flawed, but they concealed and manipulated the data. Internal emails unsealed earlier this year show (among other exchanges) Takata engineer Bob Schubert writing to coworkers, “Happy Manipulating!!!” Mr. Schuberg also talked openly of diverting attention away from poor test results, and trying “to dress it up.”
In August 2009, Honda asked Takata to redesign the airbags without informing U.S. regulators, which suggests they knew the airbags were faulty. Legal experts say this admission could doom them in court.
John Kristensen, a Los Angeles-based liability plaintiff lawyer, told CNBC that Honda executives “made a determination of a defect when they asked for the fail-safe design. They had an obligation to tell the government back in 2009. Good luck defending that.”
Takata Penalty Could Be Largest in History
Honda didn’t drop Takata as its airbag provider until November 2015, alleging that the company’s data had been “misrepresented and manipulated.” That same day, the NHTSA echoed the charge and leveled a $70 million penalty against the Japanese supplier. (If Takata fails to comply with NHTSA demands, the fine will nearly triple to $200 million: the largest in the history of the auto industry.)
The New York Times says Takata knew of its airbag problems as early as 2004. And yet, when the first airbag exploded that May, in a 2002 Honda Accord, Takata wrote the incident off as “an anomaly.” The company didn’t acknowledge that millions of its airbags were defective for more than a decade, in May 2015.
If your vehicle is on the recall list, and you or a loved one was cut by shrapnel after the airbags deployed, you may be able to file a lawsuit against Takata. By doing so, you could collect compensation for any losses stemming from your injuries. These might include medical bills, lost wages, special accommodations (e.g., home healthcare aides), or pain and suffering.
If you are acting on behalf of a loved one who suffered fatal injuries from a Takata airbag, you and your family may be entitled to additional compensation for funeral expenses, loss of companionship or consortium (marital benefits), or loss of support and services.
Morgan & Morgan has a long and successful track record of fighting the powerful, for the people. We will hold Takata accountable for its inexcusable actions the way we did Big Tobacco, against whom we won $90 million in settlements.