The Ninth Circuit's Decision In In Re Hyundai Underscores The Challenges Of Certifying Nationwide Classes

Last week, a split Ninth Circuit panel in In re Hyundai and Kia Fuel Economy Litigation1 vacated the certification of a nationwide class for settlement purposes because the district court failed to address choice-of-law issues and the variations in the relevant state laws, and also improperly "presumed" reliance on allegedly "misleading advertising." The case demonstrates the significant obstacles to certifying a nationwide class. Judge Sandra Ikuta's majority opinion, joined by Judge Andrew Kleinfeld, also emphasizes the duty to conduct a "rigorous analysis" into whether a proposed class meets Rule 23's requirements before granting certification, even in the context of certifying a class for settlement purposes.

The case arises out of an EPA investigation into Hyundai and Kia's representations regarding the fuel efficiency of certain 2011, 2012, and 2013 car models.2 After the EPA began its investigation, a number of plaintiffs filed a class action in California state court, seeking to represent a nationwide class of car purchasers who were allegedly misled by defendants' fuel efficiency marketing. Plaintiffs asserted claims under common law and California's statutory consumer protection laws.3

The car manufacturer defendants removed the case to federal court based on the Class Action Fairness Act and later opposed class certification, arguing that the variations in state consumer protection laws precluded a finding of predominance under Rule 23(b)(3).4 After a slew of follow-on lawsuits were filed across the country, which the MDL panel then consolidated before Judge George H. Wu of the Central District of California, the parties informed the district court that they had reached a class settlement on a nationwide basis.5

In preliminarily approving the class settlement, Judge Wu certified a nationwide class of owners of more than 75 models of Hyundai and Kia cars (including owners who purchased their vehicles new and used). He ruled that a choice-of-law analysis was not required when a case is settled on a class basis and that any concerns about state-law variations could be addressed in the context of the overall Rule 23(e) fairness hearing.6 A number of objectorsmainly named plaintiffs in certain follow-on lawsuits that were incorporated into the MDL7opposed the settlement. Nevertheless, at the Rule 23(e) hearing, Judge Wu granted final approval of the estimated $210 million class settlement, finding it to be fair, reasonable, and...