Hyundai, Kia settle anti-theft lawsuits for $200M
Lawsuits were filed after viral videos on TikTok and YouTube demonstrated how to steal Kia and Hyundai vehicles with the use of a USB cord.
Hyundai Motor America and Kia America Inc. agreed to pay $200 million to settle consumer lawsuits brought after viral videos on social media prompted a wave of vehicle thefts.
In the past few years, viral videos on TikTok and YouTube began circulating that demonstrated how to steal Kia and Hyundai vehicles using a USB cord.
The lawsuits alleged that Kia and Hyundai failed to install a common anti-theft device called an “immobilizer”—a security flaw exploited by a group of Milwaukee teenagers calling themselves Kia Boyz. Thieves drove off with cars, many recovered at other locations and usually damaged.
The settlement, announced on Thursday, would compensate consumers of Kia and Hyundai cars, made from 2011 to 2022 for damages, costs and the loss of their vehicles’ value. The class encompasses about 9 million cars.
“The settlement will provide benefits as soon as possible to those who have suffered out-of-pocket losses due to car thefts in Hyundai and Kia cars without immobilizers,” said Steve Berman of Seattle’s Hagens Berman Sobol Shapiro, who is co-lead class counsel in the multidistrict litigation. “The agreement also offers upgrades to fix the lack of immobilizer at the heart of the issue, as well as payments to those who are not eligible for the upgrade.”
In particular, the settlement provides up to $145 million in out-of-pocket losses, including $6,125 for the loss of vehicles, $3,375 in damages to the vehicle, and other uninsured costs, such as car rentals, taxi fares or public transportation. Class members also will get software upgrades or, if that’s not possible, $300 in reimbursement for installing a glass breakage alarm or purchasing a steering wheel lock.
Plaintiffs’ counsel plan to file a motion for preliminary approval of the settlement on July 10.
Shon Morgan of Los Angeles-based Quinn Emanuel Urquhart & Sullivan represented Hyundai and Kia in the negotiations. In a statement, Hyundai said Kia said they would also send tens of thousands of free steering wheel locks to consumers and local law enforcement agencies that can distribute them to affected vehicle owners.
“We appreciate the opportunity to provide additional support for our owners who have been impacted by increasing and persistent criminal activity targeting our vehicles,” said Jason Erb, chief legal officer at Hyundai Motor North America.
John Yoon, chief legal officer of Kia America, said: “This agreement is the latest step in a series of important actions, in addition to providing a free security software upgrade and distributing over 65,000 steering wheel locks, that Kia has taken to help customers whose vehicles have been targeted by criminals using methods of theft popularized on social media.”
‘Down to the penny’
The settlement might not end financial costs for Hyundai and Kia, however.
Excluded from the deal are cases brought by government entities, such as the cities of Seattle and Columbus, Ohio, and new class actions brought by insurance companies.
In an April 12 filing, Cozen O’Connor partners Nathan Dooley in Los Angeles and Elliott Feldman in Philadelphia, said that insurance companies’ claims could reach $600 million.
“Notably, the insurance plaintiffs own the lion’s share of alleged damages in this MDL action, with provable liquidated damages capable of calculation down to the penny,” they wrote.