In re Hyundai and Kia Fuel Economy Litigation

Hyundai Motor America and Kia Motors America (the automakers) (defendants) made false representations about the estimated fuel economy of certain car models. Consumers (plaintiffs) around the country filed consumer-fraud, class-action lawsuits against the automakers. The lawsuits were consolidated into a multidistrict litigation in a federal court in the Central District of California, where the first lawsuit had been filed. The consumers moved to certify a nationwide litigation class. In response, the automakers presented information showing consumer-law differences among all 50 states, arguing that the state-law differences created too many individual issues for a single, nationwide class. The district court tentatively agreed that the state-law differences would make a nationwide litigation class unmanageable because the parties would have to fight through all the different laws at trial. But the court also asked for additional briefing. The automakers and many of the consumers then reached a proposed settlement. The court appointed counsel to represent the consumers who had not agreed to the settlement, and all parties conducted eight months of additional discovery into the claims. The settling parties then moved to certify a nationwide settlement class under Federal Rule of Civil Procedure 23(b)(3). The court found that the state-law differences were not as problematic for a nationwide settlement class as they had been for a litigation class. After months of hearings and changes to the proposed class, the district court certified a nationwide settlement class. After several more months of litigation, the court approved the proposed settlement. Consumers who objected to the settlement appealed to the Ninth Circuit. A three-judge panel vacated the class certification, holding that the district court had been required to analyze the state-law differences before it could certify a nationwide settlement class. The Ninth Circuit agreed to rehear the appeal en banc.