Hyundai, Kia must face insurers’ lawsuits over vehicle thefts

By Jonathan Stempel

(Reuters) -A U.S. judge rejected bids by Hyundai and Kia to dismiss litigation by several hundred insurers seeking to recoup more than $1 billion they claim to owe drivers whose vehicles were stolen or damaged in a social media-inspired theft spree.

In a decision on Wednesday, U.S. District Judge James Selna in Santa Ana, California, rejected arguments that it was unfair to let insurers recover because they had collected premiums and assumed theft risks, and did not specifically identify which drivers were victims.

Selna also found sufficient arguments that the lack of anti-theft devices on 14.3 million Hyundais and Kias made from 2011 to 2022 made thefts foreseeable, despite the South Korean automakers’ assurances that their cars were safe.

The complaint, he said, supports the idea that thefts were a “predictable consequence” of Hyundai’s and Kia’s actions.

“Though (the insurers) have received premiums, defendants allegedly failed to include any anti-theft device as required under federal regulations,” Selna wrote. “Thus, the level of fault is almost entirely on the defendants.”

Hyundai said on Thursday it was disappointed with the decision and looked forward to an eventual dismissal. It also said its dealers have installed anti-theft software on more than 1 million vehicles.

Kia said it remained confident that the plaintiffs’ legal claims had no merit, and said its vehicles complied with federal safety and theft-protection standards.

Both companies also said they are working with law enforcement on matters related to the thefts.

Lawyers for the insurers did not respond to requests for comment.

Hyundai and Kia generated much criticism and a slew of litigation over their failure to install anti-theft devices known as immobilizers on most of their vehicles.

Thefts began to increase in 2021, exacerbated by TikTok videos showing how to steal cars that lack push-button ignitions and immobilizers in a matter of seconds.

On Oct. 31, Selna granted preliminary approval to a class action settlement with Hyundai and Kia covering more than 9 million vehicles. That settlement has been valued at $200 million, with up to $145 million of the payments going to drivers.

Selna also oversees litigation by municipalities seeking to recoup public safety and other costs tied to vehicle thefts.

The case is In re Kia Hyundai Vehicle Theft Marketing, Sales, Practices, and Products Liability Litigation, U.S. District Court, Central District of California, No. 22-ml-03052.

(Reporting by Jonathan Stempel in New YorkEditing by Bill Berkrot and Matthew Lewis)