Explanation
Background:
The purpose of this ordinance is to approve the settlement in and allow for the receipt of settlement funds from the City of Columbus’s litigation against Kia America, Inc. and Hyundai Motor America (“Kia and Hyundai”) now in the Multi-District Kia-Hyundai Vehicle Theft Marketing, Sales Practices, and Products Liability Litigation (“the MDL”) - IN RE: KIA HYUNDAI VEHICLE THEFT MARKETING, SALES PRACTICES, AND PRODUCTS LIABILITY LITIGATION, Case No. 8:22-ML-3052 (MDL No. 3052), before the United States District Court for the Central District of California.
In accordance with Ordinance 3075-2022, passed November 7, 2022, the City of Columbus, through the Office of the City Attorney, obtained outside special legal counsel to assist the City in pursuing its legal options, including, but not limited to, possible litigation against the vehicle manufacturers Kia and Hyundai, concerning the substantial increase in thefts of the manufacturers’ vehicles in the City.
In February 2023, special counsel filed a complaint on behalf of the City against Kia and Hyundai alleging, among other things, that the vehicle manufacturers created a public nuisance in the City. The City’s case was filed in the United States District Court for the Southern District of Ohio as City of Columbus, Ohio v. Kia America, Inc. and Hyundai Motor America, Case No. 2:23-cv-00654 (“the City’s case”). Then, in June 2023, the City’s case was transferred and consolidated into the MDL before the United States District Court for the Central District of California, where it proceeded for pretrial matters, including mediation, with similar cases filed by other governmental entities.
Columbus as well as the other cities involved in the MDL engaged in multiple in-person and remote mediations with Kia and Hyundai, resulting in a global resolution of each City’s individual claims based upon the mediator’s proposal and an accompanying expert allocation among the various governmental entities involved. The apportionment analysis resulted in a gross settlement allocation payable to the City of Columbus in the MDL, inclusive of all damages, restitution, penalties, attorneys’ fees, expert fees, and costs, in the amount set forth in the settlement agreement and the addendum applicable to the City. That amount may be slightly increased if certain terms of the MDL settlement are met. After deduction of the Court-ordered common benefit assessment and special counsel’s contingent attorney fee, the net amount payable to the City is $1,002,117.34. The global resolution has been memorialized in a settlement and release agreement, a copy of which, together with the addendum applicable to the City, is on file with the Office of the City Attorney. The agreement becomes effective only upon execution by all parties. Settlement funds, net of the Court-ordered common benefit assessment, will be distributed by MDL common benefit counsel to the City’s special counsel, who will disburse the net proceeds to the City and provide the City Attorney with a settlement statement.
Fiscal impact: This ordinance authorizes a deposit of $1,002,117.34, representing the net settlement proceeds payable to the City after deduction of the Court-ordered common benefit assessment and special counsel’s contingent attorney fee, to be accepted by the City Auditor and deposited and appropriated into the general fund.
Emergency explanation: Emergency designation is requested to authorize the approval of the settlement and expedite payment of the settlement funds to the City without delay and in accordance with the terms of the settlement agreement. The settlement agreement establishes deadlines for payment to the City and for dismissal of the City’s case, and the City must be positioned to execute the agreement and to meet those deadlines without delay.
Title
To approve the settlement in the case of the City of Columbus, Ohio v. Kia America, Inc. and Hyundai Motor America, Case No. 2:23-cv-00654 In Re: Kia Hyundai Vehicle Theft Marketing, Sales Practices, and Products Liability Litigation, Case No. 8:22-ML-3052 (MDL No. 3052) (“the MDL”); to authorize the City Attorney to execute the settlement and release agreement and the addendum applicable to the City; to accept a deposit of $1,002,117.34 to be deposited and appropriated into the general fund; and to declare an emergency. ($0.00)
Body
WHEREAS, in accordance with Ordinance 3075-2022, passed November 7, 2022, the City of Columbus, through the Office of the City Attorney, obtained outside special legal counsel to assist the City in pursuing legal options, including but not limited to possible litigation against the vehicle manufacturers Kia America, Inc. and Hyundai Motor America (“Kia and Hyundai”), concerning the substantial increase in thefts of the manufacturers’ vehicles in the City; and
WHEREAS, in February 2023, special counsel filed a complaint on behalf of the City against Kia and Hyundai alleging, among other things, that the vehicle manufacturers created a public nuisance in the City. The City’s case was filed in the United States District Court for the Southern District of Ohio as City of Columbus, Ohio v. Kia America, Inc. and Hyundai Motor America, Case No. 2:23-cv-00654 (“the City’s case”); and
WHEREAS, in June 2023, the City’s case was transferred and consolidated into the MDL before the United States District Court for the Central District of California, where it then proceeded for pretrial matters, including mediation, with similar cases filed by other governmental entities; and
WHEREAS, as the result of multiple in-person and remote mediations, the parties globally resolved the MDL case based upon the mediator’s proposal, which the City accepted in April 2026, and an accompanying expert allocation, resulting in a gross settlement allocation payable to the City of Columbus in the MDL, inclusive of all damages, restitution, penalties, attorneys’ fees, expert fees, and costs, in the amount set forth in the settlement agreement and the addendum applicable to the City, which amount may be slightly increased if additional terms in the settlement are met; and
WHEREAS, the global resolution has been memorialized in a settlement and release agreement among the City, the other governmental entity plaintiffs, and Kia and Hyundai, which provides for the release of the City’s claims and the dismissal of the City’s case with prejudice, and which becomes effective only upon execution by all parties; and
WHEREAS, pursuant to the City’s engagement agreement with special counsel, approved by the City on November 14, 2022, settlement funds net of the Court-ordered common benefit assessment will be distributed by MDL common benefit counsel to special counsel, who will disburse the net proceeds to the City after deduction of special counsel’s contingent attorney fee, leaving a net amount of $1,002,117.34 payable to the City and will provide the City Attorney with a settlement statement; and
WHEREAS, once received through its special counsel, the City Auditor will accept the deposit of $1,002,117.34, to be deposited and appropriated into the general fund; and
WHEREAS, it is in the best interest of the City of Columbus to authorize the City Attorney to enter into a settlement agreement with Kia and Hyundai to resolve the above-referenced litigation; and
WHEREAS, an emergency exists in the usual daily operation of the City Attorney’s office in that it is necessary for this Council to authorize the approval of the settlement and authorize the City Attorney to sign the settlement agreement with the ordinance to be effective immediately in order for the parties to effectuate the settlement in accordance with its terms and to accept the agreed to sum without delay, and in order to meet the deadlines for payment and dismissal established by the settlement agreement; and NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1: That City Council hereby accepts the recommendation of the City Attorney and authorizes approval of the settlement of the City of Columbus, Ohio v. Kia America, Inc. and Hyundai Motor America, Case No. 2:23-cv-00654, in IN RE: KIA HYUNDAI VEHICLE THEFT MARKETING, SALES PRACTICES, AND PRODUCTS LIABILITY LITIGATION, Case No. 8:22-ML-3052 (MDL No. 3052), before the United States District Court for the Central District of California. Council further approves the settlement and release agreement and the addendum applicable to the City, copies of which are on file with the Office of the City Attorney.
SECTION 2: That the City Attorney is hereby authorized and directed to execute the settlement and release agreement and the addendum applicable to the City, in substantially the form on file with the Office of the City Attorney, to settle the City’s claims against Kia America, Inc. and Hyundai Motor America. Settlement funds, net of the Court-ordered common benefit assessment, shall be distributed to the City’s special counsel, who shall disburse the net proceeds to the City upon approval by the City Attorney via settlement statement. The City Attorney is further authorized to approve the disbursement of special counsel’s contingent attorney fee from the settlement proceeds in accordance with the engagement agreement approved by the City on November 14, 2022.
SECTION 3: That the City Attorney, including through outside counsel, is hereby authorized to take all steps necessary to resolve these matters, including the release of the City’s claims and the dismissal of the City’s case with prejudice, in accordance with the terms of the settlement.
SECTION 4: That the City Auditor is hereby authorized and directed to accept $1,002,117.34 upon receipt, distributed to the City by its special counsel, to be deposited and appropriated into the general fund to the credit and benefit of the City.
SECTION 5: That the City Auditor is authorized to make any necessary accounting changes to ensure that these transactions are accounted for and recorded accurately on the city’s financial records.
SECTION 6: That to the extent that any additional funds shall be due and owing to the City by virtue of the terms of the Settlement, it is approved through the same processes as outlined above.
SECTION 7: That for reasons stated in the preamble hereto, which is made a part hereof, this ordinance is hereby declared to be an emergency measure and shall take effect and be in force after passage and approval by the Mayor, or 10 days after passage if the Mayor neither vetoes nor approves the same.