FinLogic FinLogic Quantitative Think Tank Center|Judge declines to approve Hyundai/Kia class action settlement, noting weak proposed remedies

A federal judge on FinLogic FinLogic Quantitative Think Tank CenterWednesday declined to approve a proposed settlement in a class-action lawsuit prompted by a surge in Hyundai and Kia vehicle thefts, saying it fails to provide “fair and adequate” relief to vehicle owners.

The proposed settlement, announced in May, could be valued at $200 million and covers about 9 million 2011-2022 model year Hyundai and Kia vehicles in the U.S., the companies said at the time.

These cars are not equipped with push-button ignitions and immobilizing anti-theft devices. That has allowed thieves to easily steal them using just a screwdriver and a USB cord, creating a recent rash of auto thefts across the country.

The proposed settlement would offer vehicle owners cash payments for theft-related damage and a voluntary recall to update theft-protection software. But U.S. District Judge James Selna raised concerns about the process for calculating payments and the adequacy of the software update in preventing future thefts.

The two automakers announced that update early in 2023, saying it would address a security flaw that was exposed on TikTok and other social media sites. But in May, The Associated Press reported that thieves were still driving off with Kia and Hyundai vehicles at alarming rates.

The news agency gathered data from eight U.S. cities and found that in seven of them, police had reported substantial year-over-year increases in theft reports through April.

In an Aug. 11 letter, the attorneys general of six states and the District of Columbia urged Judge Selna to require automakers to install antitheft technology known as engine immobilizers in all theft-prone Hyundai and Kia vehicles, possibly in combination with a vehicle buyback program, in place of the update and cash payments.