Lawsuit against Kia and Hyundai: Does lawsuit filed by Baltimore have merit?

Does making cars that are easy to steal constitute a public nuisance for which a city should be awarded damages?

That’s what Baltimore and more than a dozen other cities across the United States are arguing in lawsuits against Hyundai and Kia, which for years made vehicles that did not have engine immobilizers, a relatively inexpensive and industry-standard part that prevents a car from starting without the key. A viral TikTok challenge has helped fuel a nationwide explosion in thefts of some models made between 2010 and 2021 because people can steal them with as little as a screwdriver and a USB cable.

“These cost-cutting measures employed by Hyundai and Kia at the expense of public safety are unacceptable,” Mayor Brandon Scott said in a statement. “They have left our residents vulnerable to crime and are significantly burdening our police resources.”

The lawsuit is an example of how governments are working with private law firms to seek damages from companies using a claim of public nuisance, a vague legal doctrine that dates back centuries. There has been a resurgence of these cases in recent decades with litigation against tobacco makers, the fossil fuel industry and opioid manufacturers.

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And though it can be difficult to prevail in court, some of these lawsuits against product manufacturers have led to multibillion-dollar settlements.

This story is part of a deep dive on auto thefts.

More than a dozen cities have sued Hyundai and Kia

Seattle City Attorney Ann Davison sued Hyundai and Kia, and cities including New York, Cleveland and St. Louis have followed. The complaint from Baltimore includes some paragraphs that are identical to the lawsuit that Seattle filed against the automakers, including one that reads, “Reckless driving impacts the comfortable enjoyment of life, health, and safety of others within Seattle.”

Sara Gross from the Baltimore City Law Department and Richard Gordon and Martin Wolf of Gordon, Wolf & Carney are representing the city. The law firm is working on the lawsuit on a contingency basis, which means that outside counsel will receive a percentage if the city wins or settles the case, said Bryan Doherty, Scott’s director of communications, in an email.

The lawsuit has since been transferred to U.S. District Court for the Central District of California.

In a statement, Kia said the lawsuits are “without merit.” The National Highway Traffic Safety Administration has stated that it has not determined that the anti-theft issues constitutes a safety defect or noncompliance that requires a recall, the statement continued.

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“Kia continues to take action to help our customers by making it more difficult for criminals to use methods of theft recently popularized on social media to steal certain vehicle models,” the company said.

Ira Gabriel, senior group manager for corporate and marketing public relations for Hyundai, said in a statement that, “Hyundai is committed to the comprehensive actions we are undertaking to assist customers and communities affected by the persistent theft of certain vehicles not equipped with push-button ignitions and engine immobilizers.”

Engine immobilizers, he said, are now standard on all cars.

The car manufacturers have rolled out software updates and partnered with police departments to give out steering wheel locks.

‘Low probability of success’

Historically, certain actions were viewed as public nuisances, such as blocking a road or polluting the local water supply, said Thomas Merrill, Charles Evan Hughes professor of law at Columbia Law School.

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In the 19th century, Merrill said, state legislatures declared certain activities public nuisances, including gambling dens and houses of prostitution. Meanwhile, in the 20th and 21st centuries, he said, the legal doctrine has been “construed to be kind of a joker in the deck.”

Merrill said the traditional remedy in public nuisance cases was orders of abatement to stop the behavior. Now, he said, attorneys have asserted the right to sue for compensation to recover money spent on dealing with a problem.

It can be tough to win these cases.

“I think there’s probably, if it ever goes to adjudication, there’s a low probability of success,” said Donald Gifford, distinguished university professor and Jacob A. France professor of torts at the University of Maryland Francis King Carey School of Law. “Public nuisance suits against product manufacturers have very rarely been successful.”

Lawyers, he said, are trying to “throw out 100 years of well-developed product liability law” and proceed under a claim of public nuisance because it is “vaguely defined, to say the least.” A public nuisance is anything that annoys or offends, Gifford said.

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The lawsuit that Baltimore filed against Hyundai and Kia is in federal court, but state law applies to the case, Gifford said. And Maryland courts, he said, have rarely been pro-plaintiff, progressive or avant-garde.

But if a settlement is reached, Gifford said, it could be significant to the city and the attorneys handling the case.

The states reached a $246 billion, 25-year settlement in 1998 with the tobacco industry as compensation for health care costs related to smoking. Three drug wholesalers, AmerisourceBergen, Cardinal Health and McKesson, as well as Johnson & Johnson, finalized a $26 billion settlement in 2022 to resolve lawsuits alleging that companies helped fuel the opioid crisis. Other cases have been less successful.

Car thefts cost the city and the people who live there in numerous ways, from taking up police resources to saddling drivers with higher insurance rates. Even if law enforcement recovers a stolen vehicle, it can take weeks for a mechanic to even look at a car because of backlogs.

“What’s happened for the last 25 years is that these attorneys go to state and city governments, and they say, ‘Look, you know we have a desperate problem, because you don’t have adequate public funds to solve the problem of rampant auto theft. And we’ve got a way that will cost you nothing,’” Gifford said.

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“That’s a very attractive proposal if you’re the mayor of Baltimore or a member of the City Council,” he added. “And so I’m not sure exactly what the attorneys are thinking here, except that they think it’s a long shot chance, but it’s one worth pursuing.”

Sometimes, Gifford said, these lawsuits can make regulators aware of specific issues.

“I’m not a conservative. I’m anything but a conservative,” he said. “But you know, not all problems have solutions in courts.”

‘I certainly hope the manufacturers will do the right thing’

Andre Davis, a retired judge of the U.S. Court of Appeals for the Fourth Circuit and former Baltimore city solicitor, said though there is no assurance that these lawsuits will be successful, “it’s not so outrageous or specious or speculative, given the nature of the law of nuisance, that a city shouldn’t pursue it.”

Davis said he thinks that there is a plausible argument that Hyundai and Kia should be held liable for some amount of damages to cities that have experienced a spike in car thefts. He brought up how the automakers did not include anti-theft technology in their vehicles while a majority of manufacturers were doing so.

Though 96% of cars from all other automakers had engine immobilizers in 2015, that was only the case for 26% of Hyundai and Kia vehicles, according to the lawsuit. At the same time, the companies were installing them in all cars made for the Canadian and European markets, where they are legally required.

A critical point in the litigation, he said, will be whether a judge finds that there is enough for a claim of public nuisance to proceed. If a law firm is working on a case on a contingency basis, Davis said, there’s no financial downside to the city.

He said he’s not in a position to predict how the lawsuit will turn out.

“But I certainly hope the manufacturers will do the right thing and step up and put on their big boy pants and pay compensation to people who were harmed as a result of their reckless behavior,” Davis said.

“Giving out those steering wheel locks is not enough.”

dylan.segelbaum@thebaltimorebanner.com

Dylan Segelbaum

dylan.segelbaum@thebaltimorebanner.com