Hyundai, Kia Class Deal Over Fuel Economy Undone

By Perry Cooper

A settlement worth up to $210 million over fuel economy promises made by Hyundai Motor America and Kia Motors America needs another look, the Ninth Circuit held Jan. 23.

Class status isn’t appropriate for nationwide cases, like this one, involving variations in state law, Judge Sandra S. Ikuta wrote for the U.S. Court of Appeals for the Ninth Circuit.

The court below must take a closer look at whether common questions predominate over individual questions, the appeals court said. But it left open the possibility that the lower court could approve the settlement again.

Settlement Class Flawed

The settlement resolved the claims of 56 cases consolidated in multidistrict litigation. Car owners alleged Hyundai and Kia overstated the fuel efficiency of a number of their vehicles.

The lower court approved the deal, under which Hyundai and Kia would put up $210 million. Class counsel would receive $9 million in fees and costs.

The Ninth Circuit majority rejected the deal, saying the class shouldn’t have been certified for settlement purposes.

Potentially varying state laws defeated predominance, and used car buyers shouldn’t be included in the settlement because they weren’t exposed to advertising touting fuel efficiency, it held.

Judge Andrew J. Kleinfeld joined the opinion.

Judge Jacqueline H. Nguyen dissented. She argued the common course of conduct by the defendants is enough to establish predominance.

McCuneWright LLP represented the class.

James B. Feinman in Lynchburg, Va., and Edward W. Cochran in Shaker Heights, Ohio, represented the objectors.

Quinn Emanuel Urquhart & Sullivan LLP and Hagens Berman Sobol Shapiro LLP represented the car makers.

The case is In re Hyundai & Kia Fuel Econ. Litig. , 9th Cir., No. 15-56014, 1/23/18 .

To contact the reporter on this story: Perry Cooper in Washington at pcooper@bloomberglaw.com

To contact the editor responsible for this story: Steven Patrick at spatrick@bloomberglaw.com

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