## Facts

- Purchasers and lessees nationwide alleged Hyundai and Kia overstated EPA fuel-economy ratings in advertising and vehicle window labels.
- After consumer complaints, the EPA investigated discrepancies between advertised and real-world fuel economy.
- In 2012, Hyundai and Kia announced downward fuel-economy adjustments for several 2011–2013 models, prompting numerous consumer actions nationwide.
- The cases were centralized in an MDL in the Central District of California.
- The district court initially indicated it would not certify a nationwide litigation class because state consumer-protection laws materially varied.
- Following extensive discovery, the parties proposed a nationwide settlement offering class members cash, dealer credits, or a transferable debit card (with amounts tied to vehicle model and ownership/lease duration) and incorporating a prior reimbursement program.
- The district court certified a nationwide settlement-only class under Rule 23(b)(3) and approved the settlement; objectors appealed, challenging predominance, choice of law, adequacy, fairness, and attorneys’ fees.

## Issues

1. Whether the district court abused its discretion in finding Rule 23(b)(3) predominance for a nationwide settlement class despite potential variations in state consumer-protection law and individualized exposure/reliance questions.
2. Whether, under California choice-of-law rules, California law could be applied to class members’ claims nationwide, or whether a state-by-state analysis was required.
3. Whether the settlement was fair, reasonable, and adequate under Rule 23(e), including adequacy of representation and alleged intra-class conflicts.
4. Whether the attorneys’ fee award was properly assessed in relation to the benefits conferred on the class.

## Decision

- The Ninth Circuit (en banc) affirmed the certification of the nationwide settlement class and the settlement’s final approval.
- The court held the district court did not abuse its discretion in concluding common questions predominated for settlement purposes.
- The court held the district court permissibly applied California law to the class claims under California’s choice-of-law framework, so state-law variations did not defeat predominance on this record.
- The court rejected objectors’ fairness and adequacy challenges and left the fee determination largely undisturbed, while emphasizing careful evaluation of fees against realized class benefit.

## Legal Principles

- Rule 23 requirements apply to settlement classes; settlement does not lower the predominance standard, though trial manageability is not a barrier when certification is for settlement only.
- Predominance is satisfied when common issues constitute a significant aspect of the dispute and can be resolved for all class members through generalized proof, even if individualized questions remain for damages.
- In applying California choice-of-law rules, a court uses a governmental-interest analysis: identify potentially different laws, determine whether a true conflict exists, and, if so, assess which jurisdiction’s interest would be more impaired if its law were not applied.
- A prior decision rejecting a nationwide litigation class does not categorically bar a nationwide settlement class; the certification inquiry remains case- and record-specific.
- Under California consumer-protection statutes, a material misrepresentation aimed at consumers can support an inference of class-wide reliance, making exposure/reliance issues less likely to defeat predominance where the misrepresentation is uniformly material.
- Rule 23(e) approval requires a finding that the settlement is fair, reasonable, and adequate in light of litigation risks, the stage of proceedings, the amount and structure of relief, and the quality of representation.
- Attorneys’ fees in class settlements must be evaluated against the actual value delivered to the class, using appropriate cross-checks (including percentage-of-fund and lodestar methods).

## Conclusion

The en banc Ninth Circuit upheld a nationwide settlement class challenging overstated fuel-economy claims, concluding that the district court permissibly applied California law under California choice-of-law principles, properly found Rule 23(b)(3) predominance based on common issues of alleged misrepresentations and materiality, and reasonably approved the settlement as fair, reasonable, and adequate.


In re Hyundai & Kia Fuel Econ. Litig., 926 F.3d 539 (9th Cir. 2019) (en banc)