New Lawsuit Filed against Hyundai and Kia over Mileage Issue Approximates Basic Economic Damage at $775 Million
Attorneys describe automakers' reimbursement program as a "runaround to avoid paying what's due."
SEATTLE – Hagens Berman, a consumer-protection law firm with extensive experience litigating automotive defect and liability cases yesterday filed a second proposed class-action lawsuit against Hyundai Motor America, owned by Hyundai Motor Company of Korea (KSE: 005380.KS), and Kia Motors America, owned jointly by Hyundai Motor Company and Kia Motor Company of Korea (KSE: 000270.KS), illustrating how owners and lessees are allegedly harmed by proposed reimbursement programs for overstated mileage estimates.
The suit, filed in the U.S. District Court for the District of Central California, challenges the automakers' proposed reimbursement scheme for owners and lessees. The companies have announced they intend to reimburse owners for the difference in the companies' reported fuel economy rating and the Environmental Protection Agency (EPA) rating based on local fuel prices only, but with no reimbursement after a vehicle's sale date.
To receive the proposed reimbursement, Hyundai and Kia owners would be required to visit a dealership to verify mileage and thereafter fill out "claim forms" every year to recover what the lawsuit alleges could plainly be determined right now.
The complaint claims that the economic harm suffered by Hyundai and Kia buyers could easily approach $775 million dollars. Rob Carey, attorney for the plaintiffs, noted that these programs create obstacles that will make it unnecessarily difficult and time-intensive for consumers to collect the modest sums owed to them for increased fuel costs.
"We think Hyundai's program falls well short of making this right for consumers," said Carey. "Making owners bring their cars in for an odometer check and forcing them to reapply every year for monies due today are enacted purely to shirk financial responsibility."
According to Carey, the companies also refuse to pay for the reduced value of the vehicles if sold or traded in. "To be sure, new buyers know the corrected MPG, so they aren't harmed," said Carey. "But now that the lower MPG rating is public, current owners will face a definite drop in the value of the car when trying to sell it or trade it in. Leaving this loss out of the equation is just plain wrong."
The lawsuit seeks to represent all consumers who own or lease Hyundai and Kia vehicles whose EPA fuel economy ratings were less than the fuel economy rating produced by the applicable federal test.
Hyundai admitted it overstated the fuel-economy estimates on Nov. 2, 2012, after independent tests by the EPA showed a discrepancy.
According to published reports, Hyundai will lower fuel-consumption estimates on most Hyundai and Kia models produced in 2012 and 2013. It will reportedly lower estimates by as much as five miles-per-gallon for its Kia Soul Eco., and by one or two miles-per-gallon for most other models.
The suit was brought on behalf of 23 Hyundai and Kia owners who allege they suffered economic losses.
The suit contends that Hyundai violated California's Unfair Competition Law; its false advertising law, and its Consumer Legal Remedies Act. The suit also claims that Hyundai committed a breach of express warranty and committed fraud and negligent misrepresentation under California Common Law, among other violations.
Individuals who purchased a 2012 or 2013 Hyundai or Kia vehicle are encouraged to contact Hagens Berman to discuss the case. Consumers can contact an attorney by calling 602-224-2650. They can also email the firm at HyundaiKiaMPG@hbsslaw.com.
More information about this lawsuit is available at www.hbsslaw.com/cases/hyundai--kia-fuel-efficiency.
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