Federal court tentatively declines to approve agreement in Hyundai/Kia private consumer class-action settlement

Court’s refusal to approve agreement comes shortly after AG Ellison led letter to court recommending it strengthen settlement to require Hyundai/Kia recall or buy back theft-prone vehicles

Court finds several factors weigh against finding class-action agreement is fair and adequate

August 16, 2023 (SAINT PAUL) — Minnesota Attorney General Keith Ellison announced today that the federal court overseeing a private consumer class-action settlement involving Hyundai and Kia’s theft-prone vehicles has declined to preliminarily approve the settlement agreement. In its order, the federal court found that several factors weigh against a finding that the settlement agreement is fair and adequate. The ruling comes after Attorney General Ellison led a coalition of seven attorneys general earlier this week in urging the federal court to strengthen the settlement by requiring Hyundai and Kia to recall or buy back their theft-prone vehicles and equip them with engine-immobilizer technology that the vehicles currently lack.   

Among the terms of the private consumer settlement as proposed were a requirement that Hyundai and Kia provide a “software upgrade” for only a certain subset of their vehicles that will extend the length of the vehicles’ alarm from 30 seconds to 1 minute and requires the key to be in the ignition to start the vehicle. For vehicles for which the software upgrade is incompatible, the proposed settlement required Hyundai and Kia to reimburse consumers up to $300 for their purchase of a wheel lock or anti-theft system.   

In the letter that Attorney General Ellison led, he and the coalition expressed grave concerns that settlement agreement’s proposed remedies are insufficient to resolve the ongoing rash of Hyundai and Kia thefts that continue to harm public safety. For example, the supposed “software upgrade” is not feasible for approximately 2.3 million theft-prone vehicles, is being slowly rolled out in phases that will take months (or years) to complete, and requires consumers to proactively seek it out. The attorneys general also explained their serious concerns with the effectiveness of the “software upgrade,” as it has already been available for six months or more in the real world and during that time the high rate of Hyundai and Kia thefts has not abated, with ensuing harms to public safety. For example, in July 2023, the number of Hyundai and Kia vehicles stolen in Minneapolis alone (313 vehicles) was still more than 15 times higher than it was in July 2021 (20 vehicles).  

In its ruling, the federal court highlighted concerns that the Attorney General Ellison and the coalition had raised in their letter regarding the effectiveness of the software upgrade, including that: (1) even vehicles that have the update are still susceptible to theft; (2) there are vehicles for which the software upgrade is incompatible; and (3) the insufficient number of vehicles that have received the software upgrade to date. The Court also held that a hearing may be needed for the parties to demonstrate the software upgrade’s technology and explain how it works, its deficiencies, and potential solutions. 

“I’m pleased the court has heard our concerns. The simple fact remains that too many Kia and Hyundai vehicles lack industry-standard anti-theft technology that nearly every other vehicle in America has. As a result, thefts of their vehicles have increased astronomically around the country and Americans are less safe. The companies know this and could choose to truly fix the problem today. Instead, they continue to offer half-measures that won't fix the problem and put the burden and the cost on consumers, not on themselves where it belongs,” Attorney General Ellison said. 

Minnesota has experienced a drastic increase in Kia and Hyundai thefts 

People who want to steal cars are well aware of the lack of anti-theft technology in many of Kia and Hyundai’s vehicles, which has led to a drastic increase of Kia and Hyundai vehicle thefts throughout the nation, including in Minnesota. For example, reported thefts of Kia and Hyundai vehicles increased by 836% in Minneapolis and 611% in Saint Paul from 2021 to 2022. Some vehicles have even been stolen multiple times in the same year. 

These stolen vehicles have been used in violent crimes in Minnesota and have been involved in numerous traffic collisions, some of which have been fatal. For example, in Minneapolis alone, in 2022 Kia and Hyundai vehicle thefts were tied to at least:  

 These are not just numbers; they are public-safety incidents that have caused substantial and serious harm to our neighbors and communities. As just one example, in December 2022, a 14-year-old boy lost his life in Minneapolis after getting into a single-vehicle crash that involved a stolen Kia. 

AG Ellison leading fight to make Kia, Hyundai vehicles safer 

Attorney General Ellison has been leading the fight to make Kia and Hyundai vehicles safer since early 2023. Yesterday’s court order follows the letter AG Ellison led to the federal court urging it to strengthen the Hyundai/Kia private consumer class-action settlement.  It also follows Attorney General Ellison’s announcement in March 2023 that he was launching a civil investigation into Hyundai and Kia’s sale of these theft-prone vehicles. The order also follows an April 2023 letter Attorney General Ellison sent as part of a coalition of 18 attorneys general that called on the National Highway Traffic Safety Administration to recall Hyundai’s and Kia’s theft-prone vehicles, as well as a March 2023 letter he sent with Minneapolis Mayor Jacob Frey, and Saint Paul Mayor Melvin Carter III to Kia and Hyundai that pressed the companies for an immediate safety recall to stem the rise of thefts of their vehicles. 

Attorney General Ellison’s civil investigation is active and ongoing.  

Attorney General Ellison urges Minnesota consumers who wish to report concerns about the theft or risk of theft of their Kia or Hyundai vehicles to submit a complaint online or call the Attorney General’s Office at (651) 296-3353 (Metro area), (800) 657-3787 (Greater Minnesota), or (800) 627-3529 (Minnesota Relay).