A recent Metropolitan News story, “No Error in Approving $210M in Hyundai Settlement,” reports that the Ninth U.S. Circuit Court of Appeals, sitting en banc, affirmed the District Court’s approval of a $210 million settlement of a nationwide class action against Hyundai Motor Co. and Kia Motors Corp. based on their inflated estimates of their vehicles’ fuel economy. The settlement, approved by District Court Judge George Wu of the Central District of California ended litigation in 56 consolidated cases. Under the terms, nearly $9 million is allocated for attorney fees and costs.
Those objecting to the settlement argued that Wu erred in certifying the class for settlement purposes because there was not a predominance of common factual or legal issues. Nguyen wrote: “[H]ere, class members were exposed to uniform fuel-economy misrepresentations and suffered identical injuries within only a small range of damages. Further…, no material conflicts existed among class members.”
It was argued that purchasers of used cars manufactured by the defendants might not have seen the representations as to fuel efficiency. The judge responded that the “argument ignores the district court’s finding that the alleged misrepresentations were made ‘uniformly’—not only on the Moronery stickers, but also in ‘nationwide advertising.’ ” She explained in a footnote: “Monroney sticker is ‘the label placed on new automobiles with the manufacturer’s suggested retail price and other consumer information’…, including information about the vehicle’s fuel efficiency.” Those stickers are required only for new cars.
The jurist went on to say: “When misrepresentations are made as part of a nationwide, concerted marketing effort, it makes no difference to the predominance analysis whether consumers encounter them in different guises….Whether or not Hyundai’s and Kia’s advertising was substantial enough to support an inference of reliance…, the potential individual questions of reliance for used-car purchasers do not predominate in the context of this proposed settlement class.”
She continued: “That some individualized issues might need to be addressed does not in and of itself defeat predominance….Indeed, this sort of individual question would only apply to a subset of the class (used-car purchasers) and would primarily implicate trial management issues, which we do not consider when conducting a predominance analysis for a settlement class.”
In the multidistrict litigation (“MDL”) before Wu, cases that were consolidated came from districts in various states across the nation. Objectors argued that Wu, in certifying a class, failed to take into account variances in state laws. “Subject to constitutional limitations and the forum state’s choice-of-law rules, a court adjudicating a multistate class action is free to apply the substantive law of a single state to the entire class,” Nguyen wrote, adding: “Here, no party argued that California’s choice-of-law rules should not apply to this class settlement arising from an MDL in a California court.”
The judge rejected the contention that the attorney fees were exorbitant. Ikuta remarked: “Over the course of several years, the district court performed an admirable job of managing this complex litigation. After the settlement was announced, the district court held multiple status conferences and requested several rounds of briefing to ensure that all of the litigants’ concerns were heard and addressed. It made careful findings, which the objectors here largely do not challenge, and which more than support the judgment.”
The case is In re Hyundai and Kia Fuel Economy Litigation, 15-56014.