Hyundai Motor America Corporation is facing serious allegations of fraudulent business practices that could shake the automotive industry. On July 5, 2024, Napleton Aurora Imports, Inc., along with four other plaintiffs, filed a complaint in the United States District Court for the Northern District of Illinois against Hyundai Motor America Corporation (HMA).
The plaintiffs, which include several Illinois and Florida-based Napleton dealerships, accuse HMA of running an illegal scheme to inflate its sales figures artificially. According to the complaint, HMA has been pressuring its dealers to report unsold vehicles as sold or placed into loaner service, only to reverse these transactions later. This practice allegedly allows HMA to publish misleadingly high sales numbers and gain a competitive edge in the electric vehicle (EV) market. Dealers who comply with this scheme are rewarded with price discounts and allocations of popular models, while those who refuse are penalized with slow-selling inventory and denied financial incentives.
Napleton's complaint outlines how HMA's actions violate multiple federal and state laws. The lawsuit claims that HMA’s manipulative tactics breach the Robinson-Patman Act by engaging in unlawful price discrimination and promotional discrimination. Furthermore, the complaint alleges violations of state franchise laws in Illinois, Indiana, and Missouri. These laws are designed to protect franchisees from unfair practices by franchisors. By selectively rewarding compliant dealers and punishing non-compliant ones like Napleton, HMA is accused of creating an uneven playing field that harms both competition and consumers.
The plaintiffs argue that these deceptive practices have caused significant financial harm to their businesses. They claim losses in vehicle sales revenue, profits from related finance products, customer goodwill, and overall market value. Additionally, they have incurred substantial legal fees investigating these alleged fraudulent activities.
Napleton seeks several forms of relief from the court: treble damages under federal law for the economic harm suffered due to HMA’s actions; injunctive relief to prevent further unlawful conduct; declaratory relief affirming that HMA's practices are illegal; punitive damages for common law fraud; and reimbursement for attorney’s fees and litigation costs.
The case is being handled by attorneys Mir Y. Ali from ArentFox Schiff LLP in Chicago and Russell P. McRory from New York City on behalf of Napleton Automotive Group’s General Counsel Leslie Stracher. The presiding judge for this case has yet to be assigned.