The Washington Post

Hyundai, Kia Owners Seek $775 Million Over Fuel Economy Fibs

Less than a week after the Environmental Protection Agency announced that not one, not two, but 13 Hyundai and Kia models failed to meet their advertised fuel-economy ratings, a class-action lawsuit has been filed against the two Korean automakers.

According to Reuters, the suit -- which hasn't officially been granted class-action status yet -- was filed in the U.S. District Court  for Central California. The plaintiffs are 23 Hyundai and Kia owners who seek $775 million in damages.

There's more where that came from

Technically, this is the third lawsuit targeting Hyundai and Kia for inaccurate fuel-efficiency claims. 

Another was filed in Ohio earlier this week on behalf of three plaintiffs: one Ohio resident who purchased a 2012 Kia Rio, and a Canadian couple who now own a 2013 Hyundai Elantra. That lawsuit doesn't appear to seek class-action status, but it does ask for $5 million in damages.

And back in July, the consumer watchdog group aptly named Consumer Watchdog filed a lawsuit asking for unspecified damages on behalf of one Hyundai Elantra owner in Sacramento, California. That suit did seek class-action status, though there's no indication that's been granted.

Hyundai and Kia spokespersons have declined to comment on the new lawsuit. However, in response to the Ohio case, Hyundai's Chris Hosford said earlier this week that the automaker's proposed reimbursement program (detailed here) is the fastest and most customer-friendly way to resolve the issue.

If successful, this latest lawsuit could dramatically increase Hyundai and Kia's cost of resolving these fuel-efficiency misstatements. As we discussed on Friday, annual compensation for the 900,000 U.S. vehicles affected is conservatively estimated at $80 million -- an expenditure that will continue for as long as owners retain those vehicles.

However, Moody's Investor's Service suggests that the reimbursement plan should run closer to $100 million per year (though that figure may include an additional 172,000 Hyundai and Kia vehicles sold in Canada).

If class-action status is granted in this latest case, that would reduce Hyundai and Kia's annual burden, but the upfront cost of payouts would be enormous. And of course, not every Hyundai and Kia owner is likely to sign onto the lawsuit, meaning that if the suits prevail in court, the automakers will be making payouts on both fronts.

What's next?

If you've bought a Hyundai or Kia in the past three years -- especially one of the models included in the EPA audit -- share your thoughts and plans below.

(c) 2012, High Gear Media.


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