Regulators' $300 Million Penalty Against Hyundai and Kia for Misrepresenting Fuel Economy Does Not Compensate Aggrieved Consumers, says Consumer Watchdog

SANTA MONICA, Calif., Nov. 3, 2014 /PRNewswire-USNewswire/ -- Consumers who purchased Hyundai and Kia cars based on the companies' misrepresentations about the fuel economy of several of their 2011, 2012 and 2013 model year vehicles will not receive any money from the government consent decree with the auto makers announced today, said advocates at Consumer Watchdog, the non-profit advocacy group that first requested the EPA investigate mileage complaints in November, 2011. That will have to come from the settlement of class action lawsuits now pending before a federal court in Los Angeles. Consumer Watchdog attorneys have disputed several terms of the proposed settlement.

"Whether the government's settlement with Hyundai and Kia addresses the impact of their mis-representation on the environment, it does not provide compensation to consumers who bought Hyundai and Kia vehicles thinking they would get the advertised gas mileage but didn't," said Harvey Rosenfield, founder of Consumer Watchdog and one of its lawyers representing consumers in a class action lawsuit against the companies. "Consumers will need to rely on the controversial class action settlement now pending to get paid back the money they lost."

Consumer Watchdog attorneys, representing 13 consumers in the class action, opposed the initial terms of the settlement and pushed for improvements to the deal, including challenging the requirement that consumers file a claim form in order to get compensation.   The judge overseeing the litigation agreed with Consumer Watchdog attorneys on many points and ordered improvements to the terms of the settlement. However, as presently constructed, motorists will still have to file a claim to get their compensation. The federal court is monitoring the claims process closely.

"Because the class action settlement is the main avenue through which consumers will get paid, it is crucial that affected consumers are properly apprised of their rights under the settlement, said Laura Antonini, staff attorney for Consumer Watchdog. "Consumer Watchdog attorneys will continue to closely scrutinize the terms and outcome of the settlement to ensure as many people as possible get the money to which they are entitled."

The settlement between the auto makers, the Department of Justice and the Environmental Protection Agency requires Hyundai and Kia to pay a combined $300 million penalty to the federal government for violations of the Clean Air Act stemming from the "MPG" misrepresentations.

The dispute dates back to complaints Consumer Watchdog received in 2011 from consumers who were disappointed that their vehicles were not getting the advertised gas mileage. After writing both the White House and the EPA without response, Consumer Watchdog attorneys filed suit against Hyundai for misrepresenting the fuel economy of its vehicles. However, on November 2, 2012, the EPA announced that its investigation of the auto manufacturers determined that the manufacturers' estimates were inflated.

The EPA announcement sparked the filing of more than 50 other lawsuits, which were centralized in U.S. District Court in Los Angeles, at the request of the Consumer Watchdog legal team, in November 2012.  In February 2013, two of the 60 law firms representing Hyundai and Kia owners and lessees announced they had reached a class action settlement with the car manufacturers that would conclude the claims of an estimated 900,000 consumers who purchased or leased Hyundai and Kia vehicles with falsely advertised fuel economy. The proposed settlement was made public on December 23, 2013.

Court review of class action settlements is a two-step process. Courts engage in a preliminary review prior to class members (consumers) receiving notice of their rights under the settlement. At a future time, the court will engage in a final review of the settlement for its overall fairness, considering concerns and objections raised by class members.

The court preliminarily approved the class action settlement on October 3, 2014 and the hearing on final approval is currently scheduled for June 11, 2015.

The case is In re: Hyundai and Kia Fuel Economy Litigation, C.D. Cal. Case No. 2:13:ml-02424-GW-FFM.

Read more about the lawsuit here: http://www.consumerwatchdog.org/case/hyundai-false-advertising-miles-gallon-mpg

Consumer Watchdog is a nonpartisan consumer advocacy organization with offices in Washington, D.C. and Santa Monica, CA. Find us on the web at: http://www.ConsumerWatchdog.org

SOURCE Consumer Watchdog

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