Southern California is once again at the center of a major legal battle against Kia and Hyundai, as a U.S. 9th Circuit Court of Appeals ruling on Monday cleared the way for American insurers to sue the South Korean carmakers. The decision directs a federal judge in Santa Ana to reopen a case seeking reimbursement for more than $1 billion in claims related to thousands of stolen vehicles.
The heart of the issue lies in a critical safety feature: the engine immobilizer. This safeguard, which prevents cars from being hot-wired without the correct key, was pioneered in the mid-1980s and became a standard safety feature by the turn of the century. However, Kia began omitting immobilizers from many of its U.S. models in 2011, and Hyundai followed suit five years later.
Automakers have already settled a $145 million class-action lawsuit with car buyers and a $9 million case brought by state attorneys general. These settlements addressed claims that manufacturers deliberately dropped the ignition safeguard on U.S.-bound models, flooding the market with vehicles that were notably easier to steal.
For years, the absence of these devices largely went unnoticed by thieves, who had grown accustomed to immobilizers being standard. UCLA anthropology professor Jeffrey Brantingham, lead author of a new study on the issue, noted that if most cars have immobilizers, “you can mostly slip under the radar.” Thieves, he explained, “didn’t know these Hyundai and Kia cars were easy to steal until about 2020.”
Around that time, car theft began to surge nationwide, particularly in Los Angeles. Thefts in the county roughly doubled from the summer of 2019 to the summer of 2020. Researchers at UCLA suggest that local car thieves were among the first to realize the vulnerability of these vehicles, leading to a spike in targeted thefts that largely predated a national trend. Brantingham characterized this as an “independent discovery” by local boosters.
While Milwaukee-based boosters launched their “Kia Boys” videos in the summer of 2021, and the meme gained national attention a year later, Los Angeles’s theft problem was already well underway and even beginning to level off. In contrast, some cities, like Atlanta, saw a dramatic explosion in Kia and Hyundai thefts only after the vulnerability became widely known in June 2022.
The problem isn't going away anytime soon for Southern California. The UCLA study projects that “we’re likely to be seeing elevated thefts of these cars through 2042,” Brantingham stated. Even as overall California car thefts have dropped recently, these specific models remain stubbornly popular with criminals. Many stolen cars are recovered and returned in usable condition, only to be boosted again, a trend that may see them trickle down to poorer neighborhoods through the secondary market.
Insurers claim they have paid out more than $1 billion in claims and associated costs due to the theft and attempted theft of these vulnerable vehicles. Some 200 car insurance companies sued Kia and Hyundai, alleging that the safety feature was deliberately removed from American-bound cars while it remained standard for the rest of the world.
U.S. District Judge James V. Selna initially dismissed the complaint, ruling that his Santa Ana court lacked jurisdiction over the foreign automakers. However, the 9th Circuit reversed that decision this week. The appellate panel found that the companies intentionally reserved immobilizers as an “upsell” for American buyers, effectively making millions of base models easy to hot-wire with minimal effort.
The appeals court further noted that over 70% of all Hyundai and Kia shipments to the U.S. passed through California’s ports. This meant that the vast majority of vehicles built without working immobilizers were effectively “targeted” to the state. Judge Eric D. Miller, writing for the panel, highlighted that the companies “expressly aimed their intentional and allegedly tortious actions at California by sending thousands of shipments of vehicles to and through California’s ports.”
With the 9th Circuit’s reversal, the case will now return to Judge Selna’s court in Orange County for further proceedings.