Hyundai Motor Company is an established automaker that leads the domestic market in the Korean industry with exports across the globe. It is one of the largest manufacturers in the world. Although a popular brand in many countries, the company experiences its share of legal problems with numerous lawsuits for defective equipment, labor disputes, and other questionable activities. Here are the 10 biggest Hyundai lawsuits in company history so far.
10. Hyundai lawsuit for wage and hour violations Settlement: $340,000
In 2011, people accuse Hyundai of wage and hour violations by workers. The plaintiffs filed a civil lawsuit in the Superior Court of the State of California in Orange County in the Bang Tone LE vs Hyundai Motor Finance Company case. Workers allege Hyundai misclassifies their positions to avoid paying them the full wages that their work makes them eligible to receive. Investigation from the labor board finds evidence to substantiate the workers’ claims. Hyundai agrees to a settlement of $340,000 to resolve the issue. The case settles on September 7, 2011.
9. Hyundai Motor America sued for violation of the Consumer Warranty Act Settlement: $910,000
Allison McCarthy filed a complaint in March of 2008 claiming that Hyundai violated the Song-Beverly Consumer Warranty Act and other laws when a vehicle leased to Allison McCarthy in 2006 developed defects. The Hyundai dealer did not repair or service the vehicle as required by the terms of the warranty agreement. The company also failed to replace the vehicle, nor did they offer to make restitution to the person who leased the vehicle in good faith. Hyundai denied the allegations until the matter was brought into the legal system.
McCarthy obtained a settlement agreeing to return the vehicle and receive $9,513 to satisfy her claims, but they did not render attorney fees and costs. McCarthy filed a motion to recover $82,135 in attorney fees. She filed an appeal as the amount awarded did not cover the total amount of legal expenses. Hyundai fought back insisting that the legal fees requested were too high. By the end of the litigation, the courts awarded a settlement for $910,000. Hyundai would have spent less by agreeing to the previous request, plus they would have saved the expense of their defense attorney in the matter.
8. Hyundai penalized for violation of the health and safety code Penalty amount: $6,343,400
The California Air Resources Board investigated claims that Hyundai Kia made false claims about road test calculations about the fuel efficiency ratings of several of the vehicles they manufactured and sold to consumers. The civil case was filed in a California State Court after the CARB discovered that the vehicles violated regulations in section 43212 of the California Health and Safety Code. The road calculation methods used to determine the statistics about the vehicles were not in compliance with California’s approved test procedures, resulting in environmental violations.
The action was resolved on January 1, 2015, after investigations showed evidence supporting the claims, resulting in the Board imposing the penalty of $6.343 million, and Hyundai agreeing to the settlement to end the case. This is one of many similar litigations filed against Hyundai for violations of the Clean Air Act and several other regulations. From 2011 through 2013, Hyundai had big issues with its emissions testing and fuel economy statistics.
7. Hyundai lawsuit over inaccurate credit reporting Settlement amount: $19 million
Top Class actions reports that Hyundai Capital America allegedly provided inaccurate information on customer credit disclosures on applications for financing. The Consumer Financial Protection Bureau investigated the claims and discovered that Hyundai violated consumer rights by issuing over 8 million credit disclosures that contained untrue information. In many cases, consumers became the victims of lower credit scores, which caused them financial damages. Some of the details include Hyundai furnishing information to credit reporting agencies of poor payment history profiles that included missed or late payments, which were inaccurate.
Some customers that made their payments on time were reported as delinquent, resulting in Hyundai accruing violations of the Fair Credit Reporting Act. The damaging reports were issued between 2016 through 2020. This was a monumental case that created financial hardship for numerous customers with the loss of good credit standing that cost them points on their credit reports, erroneously, making many ineligible for lower interest rates on loans. The customers affected were entitled to share $13.2 million in restitution for the damages, with an additional $6 million paid by Hyundai in civil penalties.
Hyundai was further ordered to correct all inaccuracies in account information through an internal review. The case set a powerful precedent for all automakers and other companies who submit erroneous information to credit reporting agencies. The consequences of making false claims about consumer financial behaviors have a potentially devastating effect that can interfere with the victim’s ability to secure loans for cars, homes, and other expenses, and it can also affect a person’s ability to qualify for certain job positions that require a healthy credit report.
6. Hyundai lawsuit over defective transmissions Settlement amount: $22 million
Law 360 confirms that plaintiffs filed a civil case against Hyundai in 2020 for allegations that the company knowingly sold vehicles that came equipped with faulty transmissions. The transmissions would stall at random times, creating safety issues. The defects put the health and well-being of drivers and passengers at risk. The defective transmissions represented product safety violations for which Hyundai was found liable in a Central District of California federal court. The name of the case was the Nicholas Wylie v. Hyundai Motor America case. They agree to a settlement that required up to $22 million for restitution in the case. Hyundai paid the settlement in March 2020. This case is not to be confused with the multiple lawsuits filed against the company for selling cars with defective engines.
5. 2016 lawsuit against Hyundai for misrepresentation of mileage and fuel economy ratings Penalty amount: $41,233,320
The California Attorney General’s Office reports that Hyundai Motor and Kia Motors knowingly presented false statistics about the fuel economy and mileage ratings for various vehicles between 2011, 2012, and 2013. The claims about violations became a topic investigated by the Environmental Protection Agency. Additionally, legal actions were filed at the state level by multiple Attorneys Generals from several states. Hyundai was found in violation of environmental violations and ordered to pay a penalty of $41,223,320. The automakers agreed to a settlement of $41,233,320 to resolve the case without admitting to any wrongdoing. This legal action was not the first case that involved environmental violations by fudging mileage and fuel-efficiency ratings. Previous litigation that settled in 2015 cost the companies far more. This litigation was resolved on October 27, 2016, as a separate case from the earlier penalties that cost them a few hundred million in fines.
4. 2020 Hyundai litigation over safety offenses Settlement amount: $94 million
The NHTSA confirms that Hyundai became the defendant when accused of selling vehicles equipped with Theta II engines, known to be faulty. Although Hyundai and Kia recognize recalls on more than 1.6 million vehicles, the companies do not accurately report relevant information about the recalls, to the NHTSA and found to be in violation. The automakers failed to make timely recalls, which put drivers, passengers, and other drivers on the road at risk for injury or death.
The companies both face issues for lack of acceptable safety practices. Each must develop data analytics programs to detect future safety concerns in vehicles. Furthermore, they must act on issues on time. Hyundai must pay a total of $140 million in civil penalties if it happens again. The total amount Hyundai pays comes out to $94 million. This is with $54 million upfront and an extra $40 million to implement safety performance measures. Hyundai was fortunate to have $46 million of the penalty deferred if they comply with the conditions stipulated in the settlement agreement.
3. 2015 Hyundai Lawsuit for environmental offenses Settlement amount: $100 million
Violation Tracker reports that Hyundai was accused of environmental offenses regarding their claimed mileage and fuel economy ratings. The Environmental Protection Agency investigates allegations in2015. Their findings were sufficient for issuing a penalty in a civil case in Fountain Valley, California. The testing methods were not in compliance with California state laws regulating emissions controls. The case ends on January 9, 2015, resulting in a penalty of $100 million for the offenses. This was the second of many litigations that would ensue from similar actions within the next three years. However, Hyundai attempts to save the overhead expenses. However, they soon discover that it is more expensive to pay the penalties for breaking the law.
2. Hyundai lawsuit for Greenhouse Gas violations Settlement amount: $203.3 million
The United States Department of Justice reports that Hyundai and Kia’s failure to install emission controls in vehicles resulted in Clean Air Act violations. In addition to the civil penalty, the companies must pay, an additional penalty totals $203.3 million. However, this is for selling 1.2 million cars that emit nearly 5 tons of greenhouse gases. This is under Environmental Protection Agency mandates. Hyundai must spend an additional $50 million to take measures to prevent future Clean Air Act violations. Additionally, to forfeit greenhouse gas emissions credits that they claim previously.
The number of credits comes to a $200 million loss on top of the previous figures. Hyundai learned a valuable lesson about failure to adhere to established regulations for protecting the environment. Violations of federal laws come with heavy penalties. This case ends in 2014 in a complex settlement that cost Hyundai penalties for its irresponsible behaviors. However, failure to conform to mandates supporting the Clean Air Act affects every person on the planet. This is by dumping pollutants into the air that pose significant health risks.
1. Hyundai and Kia sued for faulty engines Settlement amount: $1.3 billion
Expert Institute reports that Hyundai and Kia were accused of selling vehicles with defective engines with various defects that sled to engine failure, fire, and seizure or stalling. Plaintiffs allege that the automakers knew about the defects in the engines. However, they did not disclose the information to the public or the National Highway Traffic Safety Administration. After claims were open, the NHTSA investigates the allegations and finds that Hyundai and Kia fail to issue recall notices on time over the 2017 period.
Hyundai had made similar recalls in 2015, but again with failure to make the recalls promptly. This lawsuit culminated in August of 2018 in a case heard by a judge. The court consolidated numerous multidistrict litigations and brought them together in a class action. However, each litigant receives separate compensation, depending on their loss. Hyundai does not admit to wrongdoing, nor does Kia. Both agree to the settlement which resolves for $758 million. However, mitigating circumstances and consideration that 3.9 million drivers were affected by the defects, drove the figure higher. The case was complex and involves multiple states’ Attorney Generals seeking compensation for the victims in their respective states. This is the biggest Hyundai settlement in the company’s history.