Hyundai, Kia to Settle Vehicle Theft Lawsuits with a Deal Worth More Than $200 Million [UPDATE]

United States District Judge James V. Selna has granted preliminary approval to a revised settlement worth up to $145 million in the sprawling Hyundai and Kia vehicle theft litigation, finding attorneys’ court-ordered revisions of the initial deal satisfactory. 

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The amended settlement, which received preliminary approval on October 31, 2023, covers all persons or entities who bought or leased any of the following vehicle models, i.e., the “class vehicles,” in the United States or its territories:

Court documents detail that a common fund of $80 million to $145 million will be established to cover approved claims for certain out-of-pocket losses related to the Hyundai and Kia theft defect. The settlement also provides a free software upgrade for covered vehicle models and, for drivers whose vehicles are ineligible for the software upgrade, reimbursement for purchases of steering wheel locks or other antitheft devices.

According to plaintiffs’ attorneys, drivers who are covered by the settlement will receive notice about the deal within four months of the court granting preliminary approval, no later than March 4, 2024, per court documents. Once notice is disseminated, eligible consumers will be able to file claims for compensation by mail or on the official settlement website, the law firm says.

ClassAction.org will update this page when the official Hyundai/Kia theft settlement website goes live.

A final approval hearing is scheduled for July 15, 2024.

The parties’ initial motion for preliminary settlement approval was not granted due to concerns from the court about the maximum amount a consumer could receive for a total loss, the lack of expert testimony about the “adequacy or calculation” of these damages, concerns from government and insurance entities about the efficacy of the software upgrade, and other question marks. 

Outlining the differences between the initial settlement and the revised deal, Judge Selna wrote that the total loss and partial loss reimbursement caps have been adjusted. For total losses, the reimbursement cap for eligible Hyundai and Kia drivers is 60 percent of the Black Book value of their vehicle, whereas the reimbursement cap for partial-loss vehicles is $3,375 or 33 percent, whichever is greater, of the Black Book value of the car.

Further, the parties, as per the court’s request, agreed that the settlement administrator shall use a table of Black Book values that estimates the value of vehicles covered by the settlement based on the model and model year. Black Book values of covered vehicles will include reimbursement for licensing fees, sales tax paid, registration fees and other expenses directly tied to the purchase of a new or replacement vehicle if there was a total loss stemming from a theft or theft attempt, court documents relay. 

Further, the parties, at the court’s direction, submitted the declaration of a qualified expert with regard to whether the amount of damages available through the settlement would make each class member whole.

Additionally, a third-party testing firm attested that the software updates included in the proposed deal were effective at preventing affected Hyundai and Kia models from being stolen via “the social media theft method,” satisfying the court’s request to quell governmental and insurers’ concerns as to the efficacy of the software upgrade.

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United States District Judge James V. Selna has denied the parties’ request for preliminary approval of the $145 million settlement detailed on this page after finding that the proposed deal was not “fair and adequate based on the current arrangement.” 

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Judge Selna declined to preliminarily approve the settlement, reasoning that while the deal encompasses vehicles made from 2011 to 2022, the maximum reimbursement amounts for total loss and partial loss vehicles—$6,125 and $3,375, respectively—do not account for the fact that a car made in 2022 “will be worth far more than one manufactured in 2011.” Accordingly, the judge directed the parties to tweak the settlement to “fashion a matrix for reimbursement that aligns with each Class Member’s vehicle’s estimated value, rather than taking an average of all vehicles and reducing it by 40%.” 

Further, Judge Selna wrote that the attorneys handling the settlement “are not qualified to opine on the amount of damages incurred” by each Hyundai and Kia driver. In light of this, the court directed the parties to submit a declaration from a qualified expert “attesting to the methods of calculating each subcategory of monetary damages” incurred by class members, including on whether the amount of damages each consumer might recover will make them whole. 

Another item of contention holding up preliminary approval of the deal was the efficacy of the software upgrade portion of the settlement. Judge Selna noted that given that the implementation of the software upgrade by class members is voluntary, as opposed to a mandatory recall, “less than half” of the covered vehicles have received the update. Moreover, the governmental entities covered by the settlement have asserted that the software update “is not achieving its intended result, and even those vehicles which have the update are still susceptible to theft,” Judge Selna said. 

Ultimately, based on comments at the August 16 hearing, the court “is likely to require an evidentiary hearing” centered on the software upgrade portion of the settlement, and Judge Selna directed the parties to prepare to demonstrate how the technology works and its shortcomings and potential solutions. 

Lastly, Judge Selna directed the parties to edit the settlement’s language to expressly state that governmental and insurance entities are properly excluded and to create more specific language regarding which claims class members are waiving against Hyundai and Kia by participating in the settlement.

“For these reasons, this factor weighs against finding that the Settlement is fair and adequate at this time,” the judge said.

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On July 20, 2023, the plaintiffs filed a motion for preliminary approval of the settlement detailed on this page.

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According to the 43-page document, the deal will cover anyone who purchased or leased certain 2011-2022 Hyundai and Kia vehicles manufactured without an engine immobilizer in the United States, including Puerto Rico, the Virgin Islands and Guam. 

A complete list of the vehicles covered by the settlement can be found here.

Class members can receive up to $6,125 for total-loss vehicles, $3,375 for vehicle and personal property damage and $375 for insurance-related expenses, the proposed settlement agreement says.

Those covered by the deal can also get up to $250 for “other related expenses,” including the costs of rental cars, taxi rides, ride-shares, public transportation, towing and other fees and taxes related to replacement vehicles if their car was lost or stolen.

“These benefits are available to Class members for each qualifying theft or attempted theft occurrence they experienced,” the motion states.

Class members who are eligible for a free software upgrade, which is designed to prevent the vehicles from starting without the key being present, will be reimbursed a maximum of $250 for lost income and childcare costs incurred during its implementation. The settlement will also compensate drivers up to $350 for each key fob purchased as a necessary part of the software upgrade, with a limit of two fobs per vehicle. They may also receive up to $50 per vehicle for steering wheel locks purchased at least thirty days before the software upgrade became available for their vehicle.

Drivers who don’t qualify to receive the free software update can get up to $300 to cover the purchase of a steering wheel lock or another aftermarket modification designed to prevent or deter theft. The settlement also offers payment that will cover costs related to the purchase and installation of a glass breakage alarm or similar anti-theft system.

United States District Judge James V. Selna will have the opportunity to grant or deny the motion at a preliminary approval hearing on August 15, 2023.

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