A California federal judge last month denied a bid by Hyundai Motor Co. to dismiss a putative class action over a stalling defect in Santa Fe vehicles. U.S. District Judge Samuel Conti said the Plaintiffs proved they had standing and properly alleged the bulk of the claims against the South Korean automaker. Hyundai’s argument that four of the five named Plaintiffs lacked standing was rejected, the judge saying that at this stage of the case, the Plaintiffs need only prove that at least one named Plaintiff satisfies the standing requirements. The judge wrote in a 37-page ruling:
Here, there can be no serious doubt that (at least) Jaffe has standing — indeed, defendants did not even challenge Jaffe’s Article III standing in their original [motion to dismiss].
Judge Conti also denied Hyundai’s attempts to have co-Defendant Hyundai Motor America’s parent company dismissed from the case for lack of a transaction, holding that Hyundai Motor Co. had a duty to disclose the alleged defect. The order said:
Plaintiffs sufficiently allege materiality. Plaintiffs state that they would have behaved differently had they been aware of the alleged stalling defect. Again, this is highly reasonable, as very few ‘reasonable consumer[s]’ would buy a car (at full price) that they knew will unpredictably stall resulting in an inability to steer or brake.
Judge Conti also allowed fraud claims and claims brought under California’s Unfair Competition Law and Consumer Legal Remedies Act to proceed, saying the Plaintiffs adequately alleged that Hyundai’s knew of the stalling defect. But a claim brought under the state’s False Advertising Law was dismissed by the judge. Hhe did give the Plaintiffs an opportunity to amend their complaint and try again. The ruling is the latest in a case first brought by named Plaintiff Julia Reniger and others in August 2014, claiming that Hyundai and its American subsidiary knew the 2010-2012 Santa Fe SUVs were prone to unexpected stalling, but did nothing about it.
The Plaintiffs alleged that Hyundai knew before 2010 about the stalling defect and had shown enough evidence, including early consumer complaints, as well as testing data and information the automaker allegedly received from its dealers, to warrant the case moving forward. The case is in the U.S. District Court for the Northern District of California.
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