Half a Million Hyundai Palisade Owners Have No Working Third-Row Airbags

EvilCorporations.com • Case No. 2:26-cv-00636, E.D.N.Y. • 26 min read

The Non-Financial Ledger: What Numbers Cannot Quantify

Picture what it actually means to strap a child into the third row of a family SUV and drive onto a highway. You chose a three-row vehicle precisely because you needed the space, because the family grew, because the soccer team needed a ride, because the grandparents were visiting. You paid a premium for that space. The Palisade is not a cheap vehicle. You did not buy the entry-level option. You researched safety ratings. You probably looked at the IIHS scores. You saw Hyundai’s own marketing language: “industry-leading and award-winning safety and technology features help ensure drivers arrive safely.” You believed it. Why wouldn’t you? Federal safety standards exist for a reason. The whole point of FMVSS No. 226 is to prevent occupants from being ejected through side windows during a crash.

What Hyundai did not tell you is that the airbags behind your third-row passengers were, by federal measurement, already failing before you ever turned the key. Not in theory. Not in a hypothetical stress scenario. In actual NHTSA compliance tests conducted in April 2025, the airbags in a 2025 Palisade did not meet the displacement requirements meant to keep heads inside the vehicle. The agency tested again in November 2025. Same result. Hyundai ran its own tests starting December 8, 2025. Same result.

Through all of that, the cars kept selling. Dealers received no instructions. Buyers received no warnings. The people sitting in those third-row seats, the small children and the teenagers and the grandparents wedged in behind the second row, had no idea the safety system designed to protect them in the worst moment of their lives was not working as advertised. They still do not, because as of the lawsuit filing, Hyundai still has not provided adequate notice to owners.

The violation here is not just financial. When a company sells you a safety feature and that feature does not work, the company has made a bet with your family’s physical safety as the stakes. The bet is: we save money by not fixing this now, and statistically, most of our customers will never be in a crash severe enough to test it. Some of them will be. Some of them will be in exactly the scenario this airbag was federally required to handle. And those people, those children, were sent into traffic without the protection they paid for, without the protection Hyundai promised, without even the protection federal law demands.

Kevin Steeneck leased his 2023 Palisade in person at Centereach Hyundai in Suffolk County. He has a name. He is a person who made a reasonable, responsible decision to lease a vehicle from a major manufacturer with a documented safety reputation. His class action now represents hundreds of thousands of people who made that same reasonable decision and were let down by a company that, the complaint alleges, prioritized moving units and avoiding warranty costs over their safety.

That line from the complaint is worth sitting with. The entire argument for why consumers can trust manufacturers is built on the premise that ordinary people cannot independently verify safety systems. That is the entire basis of NHTSA, of FMVSS standards, of manufacturer warranties. You take the company at its word because you have no other option. Hyundai exploited that trust. The company was in the, as the complaint puts it, “unique and superior position of knowing how the Class Vehicles are manufactured.” They knew the defect existed. They knew buyers had no way to find it. They sold the cars anyway.

Legal Receipts: What the Complaint Actually Says

The following are direct quotations from the complaint filed in Case 2:26-cv-00636. These are not paraphrases. They are the actual words filed with a federal court, under penalty of sanctions, by attorneys who are required to have a good-faith basis for every allegation.

Societal Impact Mapping: Who Gets Hurt When Safety Is Optional

Public Health and Physical Safety

Federal Motor Vehicle Safety Standard No. 226 exists because ejection from vehicles during side-impact and rollover crashes is one of the leading causes of crash fatalities. The defect documented here directly undermines that protection for third-row occupants across more than half a million vehicles on American roads today.

• FMVSS No. 226 is the federal ejection mitigation standard, specifically designed to prevent occupants from being thrown through side windows during crashes. The complaint confirms the Palisade’s third-row airbags fail the headform displacement test that this standard requires. Any third-row occupant in a covered crash scenario is without the protection this standard was written to provide.
• The vehicles affected span model years 2020 through 2025, meaning defective Palisades have been on the road for as long as six years. Every one of those years represents road time accumulating across a fleet of over 500,000 vehicles where the third-row safety system does not meet federal minimums.
• Children are disproportionately seated in third-row positions in family SUVs. Three-row vehicles are purchased specifically for families who need to transport more than four people, and children are routinely placed in the third row. This demographic detail appears nowhere in the complaint because it does not need to: the complaint establishes non-compliant airbag performance, and common usage patterns make clear who bears the physical risk.
• The complaint establishes that, as of the filing date, Hyundai has provided no effective repair or replacement remedy. Owners have no option to make their vehicles compliant. They are being asked to continue driving a vehicle that is, by Hyundai’s own test results and NHTSA’s findings, noncompliant with a federal safety standard.
• Hyundai continued to sell new Palisades after the recall without correcting the defect, according to ¶ 16 of the complaint. This means new buyers entering Hyundai dealerships after January 22, 2026 could purchase vehicles carrying the same known defect without any disclosure.

Economic Inequality and Consumer Harm

The financial harm here falls hardest on buyers who spent the most, trusted the most, and had the fewest resources to independently verify what they were buying. A three-row family SUV is a major purchase. Working- and middle-class families who stretched to afford a Palisade based on its safety reputation have no straightforward recourse outside of this lawsuit.

• The Palisade commands a premium price partly because of its safety marketing and its IIHS Top Safety ratings. Buyers who paid that premium for a safety-certified family vehicle were denied a core component of what they paid for. The complaint calls this a “diminution in value” and a deprivation of the “benefit of the bargain.”
• Consumers who purchased or leased Palisades cannot legally resell them in their current defective state, according to the complaint. An owner who needs to sell the vehicle, whether due to financial hardship, family change, or any other reason, is stuck with an asset that carries a disclosed federal safety defect and no remedy. That suppresses resale value and traps lower-income owners in particular.
• The complaint alleges that Hyundai has not reimbursed owners who have already incurred out-of-pocket costs attempting to address the defect. Owners who pursued repairs, paid for inspections, or otherwise spent money responding to the recall have received nothing back from the manufacturer responsible for the defect.
• The class action structure itself reflects the economic reality: individual claims may be modest relative to litigation costs, making it “totally impossible” in the complaint’s own words to justify individual lawsuits. Hyundai’s legal and financial scale gives it a structural advantage over any single owner. The class action mechanism is the only realistic path to accountability for most of the 500,000-plus affected owners.
• Leaseholders face a particular bind. Lead plaintiff Kevin Steeneck is a lessee. He is paying monthly for the use of a vehicle he cannot safely use for its intended purpose and cannot legally transfer. He is locked into financial obligations on a product that does not meet the standards under which it was sold to him.
• The complaint seeks statutory damages of $50 per transaction under GBL § 349 and $500 per transaction under GBL § 350. For New York subclass members, these amounts are significant on paper. But the path to recovery requires surviving class certification, summary judgment, and possibly trial against one of the world’s largest automotive manufacturers.

The “Cost of a Life” Metric: What the Numbers Reveal

The lawsuit puts hard numbers to what Hyundai’s inaction is worth. Translate those figures into human terms and the calculus of corporate negligence becomes visible.

What Now? Your Options, Your Watchlist, Your Power

The lawsuit was filed February 5, 2026. It is active. If you own or lease a 2020-2025 Hyundai Palisade with a production date between April 10, 2019 and June 16, 2025, you are a potential class member. Here is what matters next.

Who Is Being Sued

• Hyundai Motor America Inc., a California corporation headquartered in Fountain Valley, California. This is the direct defendant. The complaint does not name individual executives by name in the source material; the action targets the corporate entity responsible for manufacturing, marketing, and warranting the Class Vehicles.
• Lead Plaintiff: Kevin Steeneck, Suffolk County, New York, lessee of a 2023 Hyundai Palisade SRT, leased at Centereach Hyundai.
• Plaintiff’s Counsel: Jason P. Sultzer, Esq., Sultzer & Lipari, PLLC, 85 Civic Center Plaza, Suite 200, Poughkeepsie, NY 12601. Tel: (845) 483-7100.
• The case is filed in the United States District Court, Eastern District of New York, under Case No. 2:26-cv-00636, filed February 5, 2026.

Regulatory Watchlist

These are the agencies with jurisdiction over this conduct. Contact them directly to file complaints and demand accountability.

• NHTSA (National Highway Traffic Safety Administration): The agency that identified the defect and issued Recall 26V-034. File a Vehicle Safety Complaint at safercar.gov. Your complaint becomes part of the public record and can trigger further investigations. Reference Recall 26V-034 and FMVSS No. 226.
• FTC (Federal Trade Commission): Has jurisdiction over deceptive marketing and advertising claims. The complaint’s allegations that Hyundai touted “award-winning safety” while concealing a known defect fall squarely within the FTC’s mandate against unfair or deceptive acts. File at reportfraud.ftc.gov.
• New York State Attorney General’s Office: The NY subclass claims under GBL §§ 349 and 350 are state consumer protection violations. New York’s AG has been aggressive on auto manufacturer deception. File at ag.ny.gov/consumer-frauds-bureau.
• Consumer Financial Protection Bureau (CFPB): If your Palisade was financed or leased through Hyundai Motor Finance and you have experienced financial harm from the defect, the CFPB has jurisdiction over auto finance practices. File at consumerfinance.gov/complaint.
• State Attorneys General in your state: Every state has a consumer protection office with authority similar to New York’s GBL. If you are outside New York, search “[your state] attorney general consumer complaint auto recall” and file there as well.

Grassroots Action and Mutual Aid

• Document everything now. If you are a Palisade owner or lessee, preserve all purchase or lease documents, warranty paperwork, any communications with dealerships, any repair receipts, and any written responses (or non-responses) from Hyundai regarding the recall. This documentation will be essential if you join the class or pursue individual remedies.
• Connect with other affected owners. Online communities of Hyundai Palisade owners on Reddit (r/HyundaiPalisade), Palisade-specific forums, and Facebook owner groups are organizing around this recall. Collective knowledge of how Hyundai is handling (or not handling) individual owner contacts is valuable evidence for the class action.
• Contact Sultzer & Lipari directly if you believe you are a class member and wish to understand your options. Phone: (845) 483-7100. The class period covers all purchases and leases of 2020-2025 Palisades with the production dates listed in the complaint.
• Demand accountability at the dealership level. Dealers have received no instructions from Hyundai on this defect, per the complaint. Walking into your dealership, putting your demand for a remedy in writing, and escalating to Hyundai’s corporate customer care line creates a paper trail that strengthens the class’s case. Do not accept verbal assurances. Request written responses.
• Share this story. Half a million families may not know their vehicle has a federal safety defect and no fix. The most immediate public health intervention available right now is awareness. Particularly for families with children in the third row.
• Push your elected representatives. Contact your U.S. House representative and U.S. Senators and ask them to demand a congressional inquiry into NHTSA’s timeline from first notification (April 2025) to recall (January 2026), nine months during which Hyundai continued selling defective vehicles. The House Energy and Commerce Committee and the Senate Commerce Committee have direct oversight of NHTSA.