The class action lawsuit challenges the unlawful scheme engaged in by Defendant Hyundai Motor America (hereinafter “Defendant” or “Hyundai”) in the selling and continued servicing of its telematics remote monitoring feature, “Blue Link Telematics System.” The term “telematics” refers to the branch of information technology that deals with the long-distance transmission of computerized information. The term has evolved to refer to automobile systems that combine global position satellite tracking and other wireless communications for automatic roadside assistance and remote diagnostics, first popularized by General Motors Corporation with its OnStar system.
Beginning in 2011, Hyundai introduced the Hyundai Blue Link Telematics System in certain models of its 2012 model year line-up, including the popular Hyundai Sonata. According to Hyundai, the Blue Link system “uses an enhanced cellular network, with automatic roaming, that optimizes connections and prioritizes emergency requests.” With Blue Link, Hyundai customers get automatic emergency assistance in the event of a collision, point-of-interest search and navigation assistance, the ability to remotely operate various vehicle features, and self-diagnostic vehicle reports. Though Hyundai owners must subscribe in order to receive the benefits of the Blue Link system, all necessary hardware for the Blue Link system is a “standard feature” included in the sale price of Blue Link equipped Hyundai vehicles.
Purchasers of Blue Link equipped Hyundai vehicles were provided with a trial subscription period ranging from 3 months to one year free of charge. Following the expiration of the free trial period, Hyundai owners had the option to pay for continued Blue Link subscription service or to pay nothing and allow the Blue Link subscription service to lapse. If Hyundai owners either did not subscribe to Blue Link or thereafter allowed their subscription to lapse, Hyundai provided a telephone number that the vehicle owner, or any subsequent owner of that vehicle, could call in order to reactivate the Blue Link service for a “nominal connection fee.”
At no time from 2011 through the end of 2014, did Hyundai inform purchasers of its Blue Link equipped vehicles that if owners did not subscribe to the Blue Link subscription service, the Blue Link Telematics hardware would be rendered nonfunctional and would require replacement at the customer’s expense if they, or a subsequent owner of the vehicle, desired to reactivate the Blue Link subscription service at a later time.
As alleged, on or about January 7, 2015, Hyundai notified owners of its Blue Link equipped vehicles whose Blue Link subscription services had been inactive for more than one year, that “If you do not reactivate your Blue Link services by January 15, 2015, your current Blue Link system in your vehicle will be permanently disabled.” In the same notice, Hyundai informed said owners that “[reactivating your Blue Link services after it is disabled will require a hardware change, dealer-assisted installation, and will cost a minimum of $500 to replace the telematics unit plus any applicable subscription fees.”
In threatening to permanently disable the Blue Link Telematics hardware, Hyundai forced owners of its Blue Link equipped vehicles to choose between: a) subscribing to the Blue Link service, that they previously had been informed was optional; or b) allowing the Blue Link Telematics hardware that they had purchased with their vehicles to be rendered non-functional, thereby devaluing their vehicles, and requiring a significant additional expense in the event they, or any subsequent owner, desired to avail themselves of the Blue Link subscription service.
As alleged, Hyundai’s actions constitute a breach of contract terms of the sale of Blue Link equipped Hyundai vehicle as provided for in the Monroney Sticker affixed to such vehicles which included as a “STANDARD FEATURE” the “Hyundai Blue LinkTM Telematics System.” It also constitutes a breach Hyundai’s representation to owners, as set forth in Hyundai’s Blue Link Handbook, that if they declined enrollment in the Blue Link subscription service, the Blue Link service could later “be reactivated by the owner or subsequent owners” for “a nominal reconnection fee.”