Kia Motors and Hyundai Motors (“Defendants”) market and sell numerous models of vehicles in the United States, including the following 2011 through 2013 models: 2013 Hyundai Accent, Azera, Elantra, Genesis, Santa Fe, Tucson and Veloster; 20I3 Kia Rio, Sorento, Soul and Sportage; 2012 Hyundai Accent, Azera, Elantra, Genesis, Sonata, Tucson and Veloster; 2012 Kia Optima hybrid, Rio, Sorento, Soul and Sportage; 2011Hyundai Elantra and Sonata hybrid; and 2011 Kia Optima hybrid (the “Subject Vehicles”).
Over the past two years, Defendants have uniformly represented in product advertising that each of the Subject Vehicles will obtain a standard mile per gallon range. However, based on a federal government investigation spawned by many consumer complaints, both Defendants have recently admitted that the calculations for these ranges were miscalculated and uniformly wrong. This is material to consumers, since as stated by Gina McCarthy of the U.S. Environmental Protection Agency (“EPA”): “Consumers rely on the window sticker to help make informed choices about the cars they buy.”
According to the EPA, this is not a situation where the company complied with EPA testing procedures in accordance with regulations promulgated by the government, but rather admittedly failed to comply with such procedures and regulations. This action does not seek to alter or amend Defendants obligations for providing correct mileage calculation statements, which Defendants admittedly did not do. These representations were made in the Subject Vehicles’ advertising, including brochures, billboards, and publicly disseminated commercials.
As alleged in the complaint, Defendants engaged in an extensive advertising campaign emanating from California and taking place throughout the United States and Canada. Part of the goal of this advertising campaign was to convince consumers that many Subject Vehicles achieved gas mileage in the 40 mile per gallon range, which is a very important threshold for marketing purposes. While the differences vary, in almost all the circumstances in question as a result of the downward adjustment the vehicles will not reach that level — a fact that was and is material to Plaintiff and the reasonable consumer who purchased or leased at least one of the Subject Vehicles.
Because of this deceptive advertising campaign, and the claims made therein, Defendants have charged a price premium for the Subject Vehicles and/or increased demand therefor. While Defendants have attempted to address this admitted problem by offering consumers debit cards, they either know or reasonably should know what they are offering will not reimburse consumers for their actual out of pocket losses as the debit card is only for certain mileage differences, requires them to visit their car dealer for “verification” purposes, is not in cash such that they can count on the entire amount not being used, and fails to provide compensation for the fact that many consumers, such as Plaintiff, would not have bought or leased these vehicles at the prices they did if the true facts had been timely disclosed.
This action is brought by Plaintiff on behalf of a class comprising all similarly situated consumers who purchased or leased one or more of the Subject Vehicles other than for resale or distribution and seeks to halt the use of a “refund” program that does not fully compensate consumers for their losses and does not operate as a release of claims, or at a minimum ensures it is an offset against actual losses, as well as to correct the misperception that such false and deceptive advertising has created in the minds of consumers and obtain full redress for those who purchased or leased one or more Subject Vehicles.