Milwaukee Kia, Hyundai thefts class action lawsuit settled

MILWAUKEE - Kia and Hyundai reached a preliminary $200 million settlement in a Milwaukee class action suit over a defect that makes certain models easy to steal.

Barton Cerjak S.C. filed the first consumer class action case against Kia and Hyundai in June 2021 in the Milwaukee County Circuit Court. It was then removed to the United States District Court for the Eastern District of Wisconsin and was consolidated with 60 others that followed.

In filing the lawsuit, the attorneys said:

"The City of Milwaukee has seen a massive spike in motor vehicle thefts in 2021—a 193% increase in the last year. The Milwaukee Police Department has described the situation as a car theft "epidemic." The car thieves’ main targets are Hyundais and Kias, which account for approximately 66% of all thefts across all vehicles.

Kia and Hyundai thefts have increased by a whopping 2,500% since this time last year. The principal culprits, many of whom are middle-schoolers, have even coined themselves the "Kia Boyz," in an apparent homage to the ease with which these cars are stolen.  Indeed, Kia and Hyundai vehicles—who share common ownership, and hence, common design features—are being stolen at such an alarming rate that the Milwaukee Police Department ("MPD") is handing out free steering wheel locks to these vehicle owners."

The case was settled Thursday, May 18 for around $200 million.

That money would be split between security upgrades to affected models and compensation for losses as a result of theft or damage.

Attorney James Barton said it's a sign Kia and Hyundai have finally realized what's happening here.

"Our city was under siege, simple as that," said Barton. "The number of thefts of Kias and Hyundais were skyrocketing."

Barton responded the best way he knows how, filing a lawsuit on behalf of victims who've had their Kias and Hyundais stolen, saying "the Milwaukee metropolitan area has been transformed into a game of Grand Theft Auto wherein the Kia Boyz are preying on the owners to steal their cars in droves."

"It's because someone figured out, teenagers, how easy the cars were to steal, and it spread like wildfire through various social media outlets," said Barton.

He filed the case first in Milwaukee County two years ago and then in federal court, arguing Kia and Hyundai did not integrate technology that would have made the vehicles safer. It's since been litigated as a class-action lawsuit in federal court in California where Kia and Hyundai announced the preliminary settlement agreement worth up to $200 million.

"It's important, and I'm glad that, finally, Kia and Hyundai saw the public safety crisis," said Barton. "Our community is going to be safer as a result of this, and that's really the main reason we started the case."

The federal judge still has to approve the settlement which does not affect claims brought by cities like Milwaukee, insurance companies or personal claims.

Statement from Barton Cerjak S.C.

Barton Cerjak S.C. is pleased to announce that Kia America, Inc. and Hyundai Motor America have agreed in principle to a resolution of consumer class claims relative to a defect that made certain vehicle models easy to steal. The firm filed the first consumer class action case against Kia and Hyundai in June 2021 concerning this defect well over a year before any other cases were brought. The case was filed in the Milwaukee County Circuit Court and then removed to the United States District Court for the Eastern District of Wisconsin. 

"We started this case to try to make a difference in our community," said firm co–founder James Barton. "The City of Milwaukee was under siege given the rash of stolen vehicles, and when no other firms were willing to take on Kia and Hyundai to hold them accountable, we decided we had to do something. We’re pleased that the hard work our firm did and the resources we expended raised awareness of the issue and ultimately contributed to this resolution. We hope the fix developed by Kia and Hyundai will be implemented quickly, that all affected owners will be appropriately compensated, and that this problem will soon be in the past. Our firm remains committed to ensuring that all those who have been affected receive justice."

After the first–filed case was unsealed and became public in July 2022, over 60 additional copycat suits were filed across the country. The cases were then consolidated and are now pending in multi–district litigation before the United States District Court for the Central District of California, where the United States operations of Kia and Hyundai are headquartered. The next step in the process requires court approval of the proposed nationwide settlement.

Statement from Kia/Hyundai

Hyundai Motor America and Kia America, Inc. today announced they have entered into an agreement to resolve class action litigation with owners of certain Hyundai and Kia vehicles without push-button ignitions and immobilizing anti-theft devices. The agreement, which could be valued at approximately $200 million depending on how many customers elect to participate, will provide cash compensation for customers who incurred theft-related vehicle losses or damage not covered by insurance, in addition to reimbursement for insurance deductibles, increased insurance premiums, and other theft-related losses.

"We appreciate the opportunity to provide additional support for our owners who have been impacted by increasing and persistent criminal activity targeting our vehicles," said Jason Erb, chief legal officer, Hyundai Motor North America. "Customer security remains a top priority, and we’re committed to continuing software upgrade installations and steering wheel lock distribution to help prevent thefts and offering insurance options through AAA for those who have had difficulty securing and sustaining coverage."

"Kia is very pleased that today’s announcement will allow customers who have been impacted by vehicle thefts to receive additional benefits," said John Yoon, chief legal officer, Kia America, Inc.  "This agreement is the latest step in a series of important actions, in addition to providing a free security software upgrade and distributing over 65,000 steering wheel locks, that Kia has taken to help customers whose vehicles have been targeted by criminals using methods of theft popularized on social media.  Kia remains committed to assisting our customers and upholding vehicle security."

As part of this settlement, the software upgrade will be automatically installed in conjunction with any service or maintenance appointment that brings the owner of an eligible vehicle into the dealership.

For the subset of customers whose vehicles cannot accommodate the software upgrade, the agreement will provide reimbursement up to $300 for the purchase of various anti-theft devices. Hyundai and Kia have also provided consumers with tens of thousands of free steering wheel locks, either through local law enforcement or through direct shipment to impacted owners.

The settlement includes approximately 9 million Hyundai and Kia vehicles.

Hyundai Kia

The Court is expected to review the proposed settlement of the matter (In re: Kia Hyundai Vehicle Theft Marketing, Sales Practices, and Products Liab. Litig., Case No. 8:22-ML-3052 JVS(KESx) (C.D. Cal.) for preliminary approval in July.  Notices will be sent to individual class members following final approval and pursuant to the terms of the settlement.

Following historically low rates of theft among Hyundai and Kia vehicles, thefts spiked in the summer of 2022 in response to videos posted by car thieves on TikTok and other social media channels in what became known as the "Kia Challenge."  In these videos, thieves documented and promoted a specific method by which to bypass the vehicles’ security features, dismantle their steering columns and create direct access to their ignitions and challenged others to copycat their crimes.  Hyundai and Kia have urged TikTok and others to have the illicit content removed in accordance with the platforms’ terms of service and community standards.

Approximately 9 million 2011-2022 model year Hyundai and Kia vehicles on the road in the U.S. today – primarily "base trim" or entry-level models, which are not equipped with push-button ignitions and immobilizing anti-theft devices – are or were susceptible to these social media-promoted thefts.  While Hyundai and Kia believe these vehicles are fully compliant with federal anti-theft requirements, Hyundai and Kia have taken action to support the security of customers, and this agreement represents the latest step. 

Earlier this year, Hyundai and Kia introduced a free anti-theft software upgrade for affected customers.  To date, Kia has notified over three million owners and lessees of these vehicle models—covering over 96% of eligible vehicles—that they are eligible to receive the software upgrade and expects to notify all upgrade-eligible customers by the end of this month.  Kia owners can find more information at https://ksupport.kiausa.com/ConsumerAffairs/SWLD (link also available at Contact Us section of the Kia Owner’s Portal on www.kia.com).  All affected Hyundai vehicles are eligible for the upgrade as of last month.  Hyundai has notified the majority of these customers, with the remainder to be completed by month-end and is leveraging targeted paid digital media to drive affected customers to HyundaiAntiTheft.com for scheduling and more information. 

The free anti-theft software upgrade modifies certain vehicle control modules on Hyundai and Kia vehicles equipped with standard "turn-key-to-start" ignition systems to include an "ignition kill" feature so the vehicles cannot be started when subjected to the method of theft popularized on TikTok and other social media channels.  All Hyundai and Kia vehicles produced since November 2021 are equipped with an engine immobilizer as standard equipment.