US Cities Advance Auto-Theft Lawsuits Against Kia, Hyundai – Bloomberg Law

US Cities Advance Auto-Theft Lawsuits Against Kia, Hyundai – Bloomberg Law

Hyundai Motor America and Kia America Inc. must keep facing litigation by municipalities that blame insufficient security features for a rash of vehicle thefts that forced them to incur massive costs attributable to the resulting crime wave.

The municipalities raised viable negligence and public nuisance claims, the US District Court for the Central District of California said Nov. 17.

New York City, Cincinnati, and other cities alleged that design flaws in certain 2011–2022 Kia and Hyundai models make them easy to steal. These include the lack of an engine immobolizer—an electronic security device that makes it harder to start a vehicle without the appropriate key, the cities said. Social media posts demonstrating how to break in and steal the cars fueled a rash of thefts, they said.

Recklessly driven cars are frequently used in other crimes, sometimes with tragic results, the cities said. Meanwhile, finite city resources are diverted from other uses—including other emergencies.

The claims aren’t preempted by federal motor vehicle regulations that allow manufacturers a choice among security features, Judge James V. Selna said. The complaint’s references to “anti-theft technology” is consistent with the regulation, he said.

Selna rejected the automakers’ argument that they owe no duty to protect local governments from “fiscal injuries” caused by criminal third-party conduct.

The foreseeability that cars without anti-theft devices would be stolen gives rise to such a duty, the court said.

It “is difficult to envision a product more ‘public’ than the automobile,” Selna said. The “theft of an unprotected vehicle in a public place is entirely foreseeable, as is the subsequent reliance on municipal services to respond to the theft,” he said.

The criminal conduct doesn’t break a link to the automakers’ conduct and relieve them of potential liability, the court said.

“The fact that the theft exploitation and the thefts themselves are broadcast on a relatively new social media platform does not foreclose proximate causation,” it said.

The cases are part of multidistrict litigation that also includes suits by drivers whose cars were stolen or vandalized, and insurers seeking to recoup more than $1 billion paid out to their policyholders. Selna recently advanced the insurers’ suits and tentatively approved a settlement in the drivers’ litigation that includes a fund up to $145 million.

Keller Rohrback LLP and others represents the government entities. Jenner & Block LLP represents the automakers

The case is In Re: Kia, Hyundai Vehicle Theft Litig., C.D. Cal., No. 8:22-ml-03052, 11/17/23.