Hyundai and Kia confront landmark lawsuit, potential 1 billion-dollar payout

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Hyundai and Kia confront landmark lawsuit, potential 1 billion-dollar payout

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the legal saga surrounding Hyundai and Kia's alleged failure to implement anti-theft measures has taken a consequential turn with Judge Selna's recent decision.

In a significant legal development, a U.S. judge has recently rebuffed attempts by automotive giants Hyundai and Kia to dismiss a lawsuit filed by several hundred insurers. These insurers are seeking to recover a staggering sum exceeding $1 billion. The lawsuit revolves around compensation for customers whose vehicles were stolen or damaged during a surge of thefts, allegedly inspired by social media trends.

Legal Battle Unfolding in the U.S.

The verdict, handed down by U.S. District Judge James Selna in Santa Ana, California, dismissed arguments from Hyundai and Kia that challenged the fairness of allowing insurers to pursue damages. The insurers claim reimbursement based on the premise that the automakers failed to install adequate anti-theft protection on a staggering 14.3 million Hyundai and Kia vehicles produced between 2011 and 2022.

Selna's decision rests on the finding that the absence of anti-theft measures made these thefts predictable, countering assurances from the South Korean automakers regarding the safety of their vehicles. The judge asserts that the complaint supports the contention that the thefts were a "foreseeable consequence" of Hyundai and Kia's actions.

The Core Argument: Lack of Anti-Theft Measures

Crucially, Judge Selna emphasized that, despite collecting premiums, the defendants allegedly neglected to install anti-theft devices mandated by federal regulations. Selna's ruling places a substantial degree of culpability on the automakers, stating, "the degree of guilt lies almost entirely with the defendants."

Responding to the verdict, Hyundai expressed disappointment and anticipates an eventual release from the legal entanglement. The company highlighted efforts by dealers who have installed anti-theft software in over a million vehicles. On a similar note, Kia asserted that the legal claims are without merit, emphasizing that their vehicles meet federal safety and theft protection standards. Both companies affirmed their cooperation with law enforcement on matters related to the thefts.

Countermeasures and Software Upgrades

In a proactive move, the Korean automakers announced in February their commitment to offering software upgrades to 8.3 million U.S. vehicles lacking anti-theft immobilizers. This initiative aims to address the escalating car thefts facilitated by a method popularized on social media platforms, notably TikTok.

Legal Settlements and Class Action Lawsuit

Adding a layer of complexity to the legal landscape, on October 31, Judge Selna granted preliminary approval to a class-action lawsuit involving more than 9 million vehicles from Hyundai and Kia. This proposed settlement, valued at $200 million, allocates a significant portion—up to $145 million—to affected drivers.

Beyond individual claims, Judge Selna is overseeing litigation by municipalities seeking compensation for public safety and other costs linked to the surge in vehicle thefts. This multifaceted legal battle underscores the far-reaching consequences for both Hyundai and Kia.