Plaintiffs bring this action on behalf of all persons in the United States who purchased or leased any Hyundai Veloster, Hyundai Sonata (Eco) and Hyundai Elantra (Eco) vehicles equipped with a 7-speed dual-clutch automatic transmission (DCT) (collectively, “Hyundai Vehicles” or “Class Vehicles”)1 designed, manufactured, marketed, distributed, sold, warranted, and serviced by Hyundai Motor America, a California corporation.
In October 2014, Hyundai premiered its 7-speed DCT, designed to “provide an improvement in fuel consumption and CO2 emission compared to a conventional six-gear automated transmission, while acceleration performance increases” and featuring two dry clutches that transfer engine power “independently into the odd and even gear train to always be ready to shift into the next gear.”2 However, Plaintiffs allege on information and belief that Hyundai’s 7-speed DCT contains a design defect in the Transmission Control Module (“TCM”) that causes, among other problems, failure to shift, stalling, delayed acceleration, or loss of power (“TCM Defect”). The TCM is a small electronic component within the powertrain that processes data from various sensors throughout the engine in order to determine the optimal gear for shifting and fuel-economy.
On information and belief, the TCM is defective because it fails to interpret data from the vehicle’s sensors properly, thus miscalculating both the appropriate gear and the correct shift timing, which results in an unresponsive accelerator pedal and stalling. Since 20 4. 15, in an effort to address owner complaints regarding the TCM Defect, Hyundai has issued Technical Service Bulletins (“TSBs”), as detailed below. However, these efforts failed to resolve the TCM Defect.
The TCM Defect causes unsafe conditions, including the transmission failing to shift, stalling, and delayed or unresponsive acceleration, especially from a stop. These conditions are hazardous because they severely affect the driver’s ability to control the vehicle during normal driving conditions and prevent drivers from accelerating to maintain safe speeds in traffic. For example, the TCM Defect may make it difficult for drivers to accelerate safely from traffic stops because Class Members’ vehicles hesitate, fail to shift gears, and stall when drivers try to accelerate from stops.
Since at least 2015, through consumer complaints and dealership repair orders, among other internal sources, Defendant knew or should have known that the 7-speed DCT in the Class Vehicles contained a design defect that diminishes the drivability of the Class Vehicles and causes safety hazards, in part because the same concerns were expressed regarding the 2016-2017 Hyundai Tucson that is equipped with the same 7-speed DCT and TCM.
On information and belief, Defendant’s corporate officers, directors, or managers knew about the TCM Defect but failed to disclose it to Plaintiffs and Class Members, at the time of sale, lease, repair, and thereafter. In fact, in or around August 2016, Hyundai issued a Technical Service Bulletin (“TSB”) for Hyundai Tucson vehicles equipped with the 7- speed DCT and a limited recall in September 2016 for certain of the same vehicles informing its dealers that a faulty “transmission clutch application logic can result in a delayed engagement when accelerating from a stop” or fail to accelerate at all “if the accelerator pedal is repeatedly cycled.” Hyundai dealers were instructed to reprogram the TCM in the affected vehicles. However, both the TSB and the recall were limited to the 2016 Tucson, despite owners complaining of similar issues in other Hyundai vehicles equipped with the same 7-speed DCT.
Because Hyundai will not notify Class Members that the 7-speed DCT is defective, Plaintiffs and Class Members (as well as members of the general public) remain subject to dangerous transmission malfunctions that can occur without warning. As alleged, the alleged TCM Defect was inherent in each Hyundai Vehicle and
was present in each Hyundai Vehicle at the time of sale. Hyundai knew about and concealed the TCM Defect present in every Class Vehicle, as well as its attendant hazardous conditions, from Plaintiffs and Class Members, at the time of sale, lease, repair, and thereafter. In fact, instead of repairing the defects in the 7-speed DCT, Hyundai either refused to acknowledge their existence or performed repairs that simply masked them.
If they had known about these defects at the time of sale or lease, Plaintiffs and Class Members would not have purchased or leased the vehicles.