Hyundai Motor Corporation admitted it overstated the fuel-economy estimates after independent tests by the Environmental Protection Agency (EPA) showed a discrepancy.
The suit, filed in the U.S. District Court for the District of Central California, seeks to represent all consumers who own or lease Hyundai and Kia vehicles whose EPA fuel economy ratings were less than the fuel economy rating produced by the applicable federal test in that model' year.
According to published reports, Hyundai will lower fuel-consumption estimates on most Hyundai and Kia models produced in 2012 and 2013. It will reportedly lower estimates by as much as five miles-per-gallon for its Kia Soul Eco, and by one or two miles-per-gallon for most other models.
The automaker apologized to consumers, according to published reports, and blamed the issue on what the South Korean company called "procedural errors"in its testing, which was done by a Korean lab.
"Many who purchased Kia and Hyundai automobiles did so because of the claims of fuel economy the company made to consumers,"said Rob Carey, of Hagens Berman Sobol Shapiro, the consumer-rights law firm that filed the proposed class action.
Hyundai also announced plans to reimburse purchasers through a complex plan requiring owners to visit a dealership to verify mileage. The company intends to reimburse owners for the difference in the company' reported fuel economy rating and the EPA rating based on local fuel prices.
"While we think there are some laudable aspects to the company' approach to addressing the issues, we feel that consumers have rights under California law not yet addressed by the automakers,"Carey added.
The suit was filed for a Seattle woman who purchased a 2012 Hyundai Accent; an Arizona man who purchased a Hyundai Genesis sedan; an Arizona woman who purchased a Hyundai Genesis sedan; and an Illinois man who purchased a 2012 Kia Sorento, all relying on the fuel-economy numbers provided by the car manufacturer.
The suit contends that Hyundai, owned by Hyundai Motor Company of Korea (KSE:005380.KS), and Kia Motors America, owned jointly by Hyundai Motor Company and Kia Motor Company of Korea (KSE:000270.KS), violated California' Unfair Competition Law, its false advertising law and its consumer legal remedy act. The lawsuit also claims that Hyundai committed a breach of express warranty, and committed fraud and negligent misrepresentation under California Common Law, among other violations.