June 26, 2019
Weil, Gotshal & Manges LLP
En Banc Ninth
Circuit Grants
Nationwide Class
Action Settlements
a Lifeline
By David R. Singh, Audrey Stano,
and Neeckaun Irani
In a decision that has garnered national attention, In re Hyundai & Kia Fuel
Econ. Litig., the Ninth Circuit grappled with whether material variations in
state law preclude certification of a nationwide settlement of state law
consumer protection claims. On June 6, 2019, the Court reversed its
previous ruling, holding that variations in state law do not defeat
predominance in settling a class action.
Factual Background
The litigation commenced as a putative class action in the Central District of
California challenging Hyundai’s marketing of certain vehicles as achieving
40 MPG fuel economy in violation of consumer protection laws. Before any
class certification decision, Hyundai and Kia voluntarily revised their fuel
efficiency ratings for certain vehicles and implemented a reimbursement
program designed to compensate consumers for increased fuel costs.
Plaintiffs across the country then filed over 50 additional class actions that
were transferred into a multidistrict litigation and consolidated with the initial
case in the Central District of California. Shortly thereafter, the parties
reached a nationwide settlement that would resolve all of the pending
litigation.
Lower Court’s Ruling and Procedural Background
In connection with the motion for preliminary approval of the proposed
settlement, the district court held several hearings to consider concerns
about the fairness, adequacy, and reasonableness of the settlement, the
sufficiency of the proposed class notice, and whether a settlement class
should be certified. With respect to certification, the district court found no
“serious differences between the laws of the various states” that would
preclude a finding that common issues would predominate. The district court
emphasized that the accuracy of the fuel efficiency representations and the
defendants’ knowledge thereof were common issues that would drive the
analysis with respect to any cause of action such that variations in state law
would not predominate. On, August 21, 2014, the district court granted
preliminary approval to the proposed class settlement.1 On June 11, 2015, it
granted final approval.2
Various objectors, including James Feinman, brought appeals challenging
the district court’s final approval order. On January 23, 2018, the Ninth Circuit
vacated the district court’s court’s ruling on class certification in a 2-1
