Plaintiffs Object to Settlements of Hyundai, Kia Fuel Efficiency Litigation

Plaintiffs Object to Settlements of Hyundai, Kia Fuel Efficiency Litigation Photo: IFCAR via Wikimedia Commons.

At least two groups of plaintiffs are objecting to the proposed national accord that would resolve several class actions over the advertised fuel efficiency of Hyundai and Kia vehicles.

The multidistrict litigation involving 54 lawsuits was settled just days after the MDL was formed, the objecting plaintiffs said. Hagens Berman Sobol Shapiro LLP and McCune Wright LLP were the only two plaintiffs law firms out of 60 that participated in the negotiations, the objecting plaintiffs said.

Harvey Rosenfield, Pamela Pressley and Laura Antonini, of Consumer Watchdog in Santa Monica, Calif., and three other plaintiffs firms, said the court should reject the settlement because the carmakers would be responsible for processing the plaintiffs’ claims and get to keep any money that the plaintiffs do not claim.

“Hyundai and Kia misled the EPA [Environmental Protection Agency] and consumers about the fuel economy of their vehicles,” Consumer Watchdog said in court papers. “The fruits of that wrongdoing were an unspecified financial windfall for Hyundai and Kia, at the expense of their customers, their competitors, and more generally the environment. The defendants have little incentive to administer the settlement in a scrupulously proper and transparent manner.”

Consumers bought over 900,000 Hyundai and Kia vehicles during a three-year period in which the fuel economy of those vehicles were falsely represented, Consumer Watchdog said. The nonprofit also says that the litigation began because of its investigation into fuel economy complaints about 2011 and 2012 Hyundai Elantras.

James B. Feinman and Andrew D. Finnicum, of James B. Feinman & Associates in Lynchburg, Va., said their class action covering 19,000 Virginians who purchased 2011, 2012 and 2013 Hyundai Elantras should not settle because Virginia Lemon Law allows consumers who have the warranties on their vehicles violated by carmakers to have their vehicles replaced or bought back for the full contract price including collateral charges, taxes and incidental damages.

“The settling plaintiffs negotiated, presented, analyzed, and evaluated the proposed nationwide settlement class solely through the prism of California law … Analysis, evaluation, and resolution of the case through the prism of California law robs the people of Virginia of their constitutional right to determine and to enforce their own public policy in cases of this type,” Feinman said in court papers.

When a district court certifies a class action for purposes of settlement alone, certification requires more stringent attention because the proposed representatives and their lawyers negotiated the settlement without knowing who they were actually representing, Feinman argued.

Both Consumer Watchdog and Feinman said the proposed class representatives do not adequately represent all of the class members, including their clients.

They also both said that defense counsel have refused to talk to any plaintiffs’ firms besides Hagens Berman and McCune Wright.

Consumer Watchdog wants direct payment to consumers without the need to fill out claim forms, for a neutral, third-party administrator to be appointed to handle claims, and for unclaimed funds to be put into a cy pres fund.

The multidistrict litigation is pending before U.S. District Judge George H. Wu of the Central District of California.

Amaris Elliott-Engel contributes to law.com.

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