9th Circuit en banc panel restores class settlement

The 9th U.S. Circuit Court of Appeals has reinstated a $210 million class action settlement over alleged fuel efficiency inflation by Hyundai Motor Co. and Kia Motors Corp. The en banc panel voted 8-3 on Thursday to overturn a previous decertification of the nationwide class.

In June 2015, the settlement was approved by U.S. District Judge George H. Wu, who called it "a raging success." But that decision was vacated by a split 9th Circuit panel nearly three years later. In a blow to nationwide class action settlements, Judge Sandra Segal Ikuta, writing for the majority, said variations in state consumer protection laws and individual facts meant the class had to be separated into state subclasses.

Now, the 9th Circuit has reversed once again after rehearing the case en banc, saving the settlement. The class members experienced similar fuel-economy misrepresentations and suffered identical injuries, establishing predominance and meeting the standard for class certification for settlement, the panel decided. Variations in state law do not defeat predominance, according to the opinion.

"This cohesive group of individuals suffered the same harm in the same way because of the automakers' alleged conduct," Judge Jacqueline H. Nguyen said in Thursday's majority opinion. Ikuta dissented. In re Hyundai and Kia Fuel Economy Litigation, 2019 DJDAR 4888 (9th Cir., June 6, 2019).

Attorneys who oversaw the settlement praised the decision.

James S. Azadian of Dykema Gossett PLLC, who represents Kia, said the holding brings the 9th Circuit in line with other circuit courts and the U.S. Supreme Court.

"The three-judge panel's decision could've made it significantly more difficult and costly to settle class actions brought before the 9th Circuit," he said in an interview. "The en banc court's decision helped promote reasonable compromises in the future between class action plaintiffs and defendants."

"Hyundai is grateful for today's opinion, which enables us to move forward with the nationwide settlement," according to a statement from Quinn Emanuel Urquhart & Sullivan LLP's Shon Morgan, who represents the company.

Plaintiffs' class attorney Steve W. Berman of Hagens Berman Sobol Shapiro LLP said the settlement will benefit consumers.

"The 9th Circuit's Hyundai decision resets the law on approval of class action settlements to what lawyers and trial judges had long understood it to be," Berman said in a statement.

But James B. Feinman, counsel for the objectors who filed the appeal, said the settlement hurts the class members he represents from Virginia, where he claims consumer protection laws are tougher than California's. He did not comment on whether he plans to appeal.

"The dissent describes the errors of fact and law of the District Court, as upheld by the majority and concludes that 'the majority's failure to correct these errors may be beneficial for the class action bar, but it detracts from compliance with Supreme Court precedent,'" Feinman said in a statement.