Objectors Call $400M Hyundai Kia MPG Class Action Settlement ‘Unfair’

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A group of Class Members filed an objection to a proposed $400 million class action lawsuit settlement that would resolve allegations that Hyundai Motor America and Kia Motors America overstated the fuel efficiency of more than 900,000 vehicles. The breakaway group points to a number of “red flags” they claim warrant rejection of the Hyundai Kia class action settlement, including an “unnecessary and onerous claims process.”

According to the objection filed May 30, the proposed Hyundai Kia class action settlement fails the “fair and reasonable” test. “If approved, it would erode public confidence in a crucial device for redressing corporate wrongdoing,” objectors say.

The Hyundai Kia fuel economy class action lawsuit started with an investigation by the non-profit organization Consumer Watchdog into numerous fuel economy complaints it received from consumers about the 2011 and 2012 Hyundai Elantra. On Nov. 30, 2011, the organization sent a letter to the Environmental Protection Agency (EPA) requesting “that the EPA re-test the 2011 and 2012 Elantra model in its own facility, to seek an explanation for the MPG disappointments of so many Elantra buyers.”

Hyundai denied the complaints, saying they had no merit because its advertising was accurate and in full compliance with applicable laws and regulations.

The first Hyundai fuel economy class action lawsuit was filed in July 2013, alleging that the Hyundai Elantra only gets about 29 mpg on the highway – far below the “40 Mile Per Gallon Elantra” pitch advertised by Hyundai.

On Nov. 2, 2012, the course of the litigation changed when the EPA announced that the Hyundai and Kia had overstated the gas mileage on 900,000 vehicles, or 35% of their 2011-2013 model-year vehicles. The first of several class action lawsuits followed.

Hyundai and Kia subsequently announced that they would be adjusting the advertised MPG values of all of those vehicles. The car makers also initiated a “Voluntary Reimbursement Program” that would compensate current owners and lessees by providing a debit card with funds computed based on certain factors. [Hyundai and Kia customers with questions about the mileage reimbursement program can find answers at www.hyundaimpginfo.com and www.kiampginfo.com.]

On Feb. 14, 2013, while representatives of plaintiffs were preparing to consolidate the Hyundai Kia class action lawsuits into multidistrict litigation in the United States District Court for the Central District of California, two of the 60 law firms involved informed the court that they had negotiated a global class action settlement that would bind all affected consumers. The proposed settlement was not filed with the court until Dec. 23, 2013, as part of an instant motion for preliminary approval.

Objectors’ Issues with the Hyundai Kia Settlement

Under the proposed Hyundai-Kia class action settlement, current owners and lessees would be entitled to a payment in a form of debit card ranging from $140 to $590 for Hyundai vehicles and $50 to $1,420 for Kia vehicles. The opposition, however, took note that the the debit cards will expire one to three years after issuance.

The group of Class Members who filed their objection said that when the proposed settlement is taken as a whole, the number of “red flags” renders it unfair, unreasonable and inadequate under the Federal Rules of Civil Procedure, case law and the best practices for class action lawsuit settlements. These so-called red flags include the following, according to a legal update from Consumer Watchdog:

(1) To receive any compensation, the consumer must file an 11-page notice and a five-page, nine-step claim form that is complex, hard to follow and unnecessary.

(2) Hyundai and Kia would be allowed to keep all unclaimed and expired compensation. Requiring a claim form will end up allowing the two defendants to keep most of the money they have agreed to pay consumers.

(3) The proposed compensation to vehicle owners is not fully documented and does not fully cover the economic loss suffered by consumers.

“With the active assistance and encouragement of the Court, modifications can be made that will address the proposal’s flaws, hopefully rendering formal opposition unnecessary,” the analysis states.

Judge George H. Wu has set a June 13 deadline for the class counsel to defend the Hyundai-Kia class action lawsuit settlement. A hearing on each side’s motions was set also for June 26.

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The objectors are represented by Harvey Rosenfield, Pamela Pressley and Laura Antonini of Consumer Watchdog; Jonathan W. Cuneo and William Anderson of Cuneo Gilbert & Laduca LLP; Steve M. Campora, Robert A. Buccola and Craig C. Sheffer of Dreyer Babich Buccola Wood Campora LLP; and Niall P. McCarthy, Anne Marie Murphy and Eric J. Buescher of Cotchett Pitre & McCarthy LLP.

The settlement class is represented by Elaine T. Byszewski, Robert B. Carey and Steve W. Berman of Hagens Berman Sobol Shapiro LLP, and Richard D. McCune of McCuneWright LLP, among many others.

The Hyundai Kia MPG Class Action Lawsuit is Hyundai and Kia Fuel Economy Litigation, Case No. 2:13-ml-02424, in the U.S. District Court for the Central District of California.

UPDATE 1: A settlement has been reached in a class action lawsuit alleging Hyundai Motor America and Hyundai Motor Company misrepresented the fuel economy of certain Hyundai vehicles. Consumers who purchased or leased certain Hyundai vehicles could be eligible for a cash payment or other benefits. Learn more at the Hyundai Fuel Economy Settlement.

UPDATE 2: As of Apr. 11, 2016, six different appeals have been filed concerning the Hyundai Fuel Economy Settlement. Until the Court resolves those appeals, the Claims Administrator is unable to mail out settlement funds.