Hyundai and Kia are set to face lawsuits filed by several hundred insurers seeking to recover over $1 billion in connection with a wave of vehicle thefts inspired by social media. A U.S. District Judge, James Selna, in Santa Ana, California, rejected the attempts by Hyundai and Kia to dismiss the litigation.
The insurers argue that the automakers owe compensation to drivers whose vehicles were stolen or damaged during a spree fueled by social media. The judge dismissed the automakers’ claims that it was unfair to allow insurers to recoup losses, emphasizing that the lack of anti-theft devices on approximately 14.3 million Hyundais and Kias manufactured between 2011 and 2022 made thefts foreseeable.
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Judge Selna pointed out that the insurers had a valid complaint, asserting that the absence of anti-theft devices, despite federal regulations requiring them, contributed to the predictability of thefts. He noted that the insurers had collected premiums but alleged that the defendants, Hyundai and Kia, failed to include mandatory anti-theft devices.
Both Hyundai and Kia expressed disappointment with the decision. Hyundai mentioned that it looks forward to an eventual dismissal and highlighted that its dealers have installed anti-theft software on more than 1 million vehicles. Kia, on the other hand, remained confident that the legal claims against them had no merit, asserting that their vehicles complied with federal safety and theft-protection standards.
The legal dispute stems from the criticism and litigation faced by Hyundai and Kia for not installing immobilizers, a type of anti-theft device, on most of their vehicles. Thefts surged in 2021, with TikTok videos demonstrating how to steal cars without push-button ignitions and immobilizers in seconds. A class action settlement covering over 9 million vehicles, valued at $200 million with potential payments of up to $145 million to drivers, received preliminary approval on October 31. This settlement is part of a broader litigation overseen by Judge Selna, including claims by municipalities seeking to recover costs associated with vehicle thefts.
The rejection of Hyundai and Kia’s bid to dismiss the insurers’ lawsuits underscores the legal challenges these automakers face in the aftermath of social media-inspired vehicle thefts and the alleged failure to comply with anti-theft device regulations.
Source: Reuters
