Hyundai, Kia $326M Deal In Brake Defect Suits Wins Final OK
By: Enrique Serna
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Hyundai, Kia $326M Deal In Brake Defect Suits Wins Final OK
Written By: Linda Chiem
Re-Posted from Law360 (May 5, 2023, 7:25 PM EDT) — A California federal judge on Friday signed off on a $326 million deal, including full reimbursements for repairs and extended warranties, to end consolidated litigation accusing Hyundai and Kia of selling vehicles with faulty anti-lock brake modules that could spark fires.
U.S. District Judge Stanley Blumenfeld Jr. granted final approval of an amended settlement worth at least $326 million, closing out three consolidated class actions that more than a dozen consumers filed in 2020 against Hyundai Motor Co., Hyundai Motor America Inc., Kia Corp. and Kia America Inc. The suits alleged that approximately 3 million vehicles had defective anti-lock brake system, or ABS, modules that could short circuit and spontaneously catch fire.
Judge Blumenfeld, who had tentatively approved the settlement in October, overruled objections from a pair of class members and concluded that there was sufficient discovery and arms-length negotiations and that “the work completed to date favors settlement.”
“Plaintiffs represent that absent a settlement, these cases would likely present extensive disputes about class certification, the scope of discovery, expert discovery, and Daubert challenges, as well as the possibility of an interlocutory appeal,” Judge Blumenfeld said in Friday’s order. “This representation appears to be accurate based on this court’s experience with this litigation. An immediate recovery for class members is preferable to prolonged risk and expense of further litigation. Therefore, the settlement of their claims for benefits tailored to make them whole under the amended settlement agreement is fair and adequate.”
The amended settlement provides for extended warranties covering all future costs class members incur arising from the defective ABS module, one free inspection of the ABS module in class vehicles and reimbursement for out-of-pocket expenses already paid stemming from a defective ABS module. Additionally, class members whose vehicles were deemed a total loss after an ABS module-related fire would receive the maximum “Black Book” value and $140 goodwill payments for their cars, according to court filings.
The settlement is estimated to be worth at least $326 million, potentially rising to $652 million, depending on how many class members file claims for repair reimbursements and take advantage of the free inspection at some point during the life of the extended warranty, according to court filings.
“We are pleased that this relief is being offered to so many Hyundai and Kia owners and thank the court for its careful review of the settlement,” Steve W. Berman of Hagens Berman Sobol Shapiro LLP, co-class counsel, said in a Friday statement.
Judge Blumenthal also approved the parties’ agreement for Hyundai and Kia to pay approximately $6.2 million in attorney fees and costs to counsel for the class plaintiffs. He also approved their request for incentive payments ranging from $2,500 to $5,000 apiece for the 18 named plaintiffs, for a total award of $67,500, according to the order.
The Hyundai class vehicles in the litigation include model years 2014-2021 Tucson; 2007 and 2017-2018 Santa Fe; 2013-2015 and 2017-2018 Santa Fe Sport; 2019 Santa Fe XL; 2006-2011 Azera; 2017-2020 Genesis G80 sedans; 2019-2021 Genesis G70 sedans; 2015-2016 Genesis; 2007-2010 Elantra; 2009-2011 Elantra Touring; 2006 Sonata; and 2007-2008 Entourage. The Kia class vehicles include model years 2008-2009 and 2014-2021 Sportage; 2007-2009 and 2014-2015 Sorento; 2013-2015 Optima; 2018-2021 Stinger; 2006- 2010 Sedona; 2017-2019 Cadenza; and 2016-2018 K900 vehicles — which were also the subject of recalls by the National Highway Traffic Safety Administration.
NHTSA’s recall notices said Hyundai and Kia strongly urged the owners of affected vehicles to park their cars outside and away from homes and other structures until their vehicles could be repaired. NHTSA said the anti-lock brake system module could malfunction and cause an electrical short, which could result in an engine compartment fire while parked or driving.
Kia America said in a statement to Law360 that the settlement reflects the company’s “commitment to vehicle quality and customer satisfaction.”
“This settlement provides customers with numerous benefits, including a warranty extension for the ABS Module/HECU for all class vehicles so that any qualifying repair will now be covered without cost to the class member for five to twelve years,” the automaker said. “The settlement also allows customers to seek reimbursement of out-of-pocket costs related to qualifying ABS Module/HECU repairs, rental changes, and loss of class vehicle[s] that customers may have incurred in the past.”
The HECU, or hydraulic electronic control unit, is a component of the ABS module that was blamed for the fires.
Representatives for Hyundai were not immediately available for comment Friday.
The plaintiffs are represented by Elizabeth A. Fegan and Jonathan D. Lindenfeld of Fegan Scott LLC, Steve W. Berman, Thomas E. Loeser and Rachel E. Fitzpatrick of Hagens Berman Sobol Shapiro LLP, Jonathan M. Jagher of Freed Kanner London and Millen LLC, Katrina Carroll and Todd D. Carpenter of Lynch Carpenter LLC, Jennifer A. Lenze of Lenze Lawyers PLC, J. Barton Goplerud of Shindler Anderson Goplerud and Weese PC, and Rosemary M. Rivas, David Stein and Rosanne L. Mah of Gibbs Law Group LLP.
Hyundai and Kia are represented by Lance A. Etcheverry, Caroline Van Ness, Michael C. Minahan and John Beisner of Skadden Arps Slate Meagher and Flom LLP.
The case is Ramtin Zakikhani et al. v. Hyundai Motor Co. et al., case number 8:20-cv-01584, in the U.S. District Court for the Central District of California.
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