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Lawsuit against Hyundai made similar accusations to GM scandal

2014 has been a big year for automotive recalls. General Motors has received the most negative press for allegedly trying to cover up ignition switch defects, which delayed recalls by a decade or more. But GM is not the only company facing product liability lawsuits, nor the only automaker facing allegations that known defects were hidden and recalls were delayed.

In a recent court ruling, a judge upheld an award of $81 million to the families of two teenagers killed in a 2011 car accident. The plaintiffs allege that the victims lost control of the car due to a steering defect that Hyundai had known about but failed to investigate or fix.

The lawsuit filed against the South Korean car company went to trial in Montana, where the accident occurred and where the plaintiffs live. According to the lawsuit, a defective steering knuckle broke on the 2005 Hyundai Tiburon and caused the driver to lose control of the car, ultimately leading to the fatal crash.

The plaintiffs had already won the case against the automaker, but the punitive damages in the initial jury award had been reduced. Recently, Hyundai sought to reduce damages even more, but the judge refused. She kept the punitive damages at $73 million in addition to actual damages of $8.1 million.

Plaintiffs were successfully able to prove that Hyundai failed to address the problem despite having 127 warranty reports about issues with steering knuckles. In her ruling, the judge noted that “the defendants had over a decade of notice of problems or defects with their steering knuckles in their passenger vehicles -- which problems or defects were contrary to their own material specifications -- and apparently took no steps whatsoever to investigate.”

That allegation sounds very similar to those brought against General Motors and other auto companies earlier this year. The original jury award in this case ($240 million) was the largest ever against Hyundai.

Source: Bloomberg, “Hyundai Must Pay $73 Million Punitive Award, Judge Says,” Margaret Cronin Fisk, Sept. 22, 2014

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