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Court Dismisses Consumers’ Damages Claim Regarding Revocation of Vehicle Certifications


In a case where vehicle consumers filed a damages action against certain overseas vehicle manufacturers and a Korean vehicle importer on the ground that the certifications of their vehicles under the Clean Air Conservation Act (the “CACA”) and the Noise and Vibration Control Act (the “NVCA”) were revoked, Kim & Chang successfully represented the manufacturers and the importer and had the Court dismiss the consumers’ claims. This court decision will serve as an important precedent for future damages cases concerning the certifications of manufactured vehicles under the CACA and the NVCA.

In this case, the Ministry of Environment of Korea revoked the certifications of the relevant manufactured vehicles on the ground that the Korean vehicle importer forged the emissions and noise test reports that are required to obtain said certifications. Accordingly, the consumers who purchased or leased such vehicles sought damages against the vehicle manufacturers and the importer. The consumers asserted that their vehicles had turned into “illegal vehicles” due to the revocation of the certifications, and claimed that they should be compensated for (i) the manufacturers and importer’s violation of the Fair Labeling and Advertising Act, (ii) a tort under the Korean Civil Code and (iii) a breach of the vehicles’ warranty.

In response to the consumers’ claims, we defended the vehicle manufacturers and the importer by proving that (i) there were no inconsistencies between the contents of the labels/advertisements and the characteristics of consumers’ vehicles, (ii) the violation of the CACA and the NVCA does not establish tort liability with regards to the consumers, and (iii) the vehicles’ warranty certificates did not cover the certification of the vehicles. In particular, we actively strived to explain the meaning behind the certification of a manufactured vehicle under the CACA and the NVCA and the effects of the revocation of such certification before the Court.

After reviewing the parties’ arguments, the Court dismissed all of the consumers’ damages claims, and this dismissal was affirmed as the final decision. This case was the first case in which the Court provided its ruling regarding the legal meaning of manufactured vehicle certifications and the effects of their revocation. It is therefore a meaningful decision that can be applied to many future cases that address issues related to certifications of manufactured vehicles, such as emissions defeat devices.