Class Action Says Hyundai Palisade Recall Failed to Fix Third-Row Airbag Defect in Over 500,000 SUVs

Hyundai Motor America is facing a proposed class action lawsuit alleging that a recall meant to fix a third-row side curtain airbag defect in the Palisade SUV never actually delivered a working repair, leaving more than 500,000 vehicles on the road with the underlying safety flaw intact.

The case, Steeneck v. Hyundai Motor America Inc., was filed February 5 in federal court in New Jersey. It centers on 2020-2025 model year Palisade vehicles built between April 2019 and June 2025 that were subject to a recall issued by the National Highway Traffic Safety Administration in January. Regulators determined the SUVs did not meet Federal Motor Vehicle Safety Standard No. 226, a rule designed to prevent occupants from being ejected through side windows during a crash.

According to the complaint, Hyundai first learned in April 2025 that the 2025 Palisade had failed compliance testing because the third-row side airbags did not achieve the required headform displacement, a key measure of how effectively the airbag cushions a passenger's head in a rollover or side-impact crash. The lawsuit claims the defect traces back to shortcomings in Hyundai's design, development and validation processes before the vehicles ever went on sale.

Plaintiffs argue that even after issuing the recall, Hyundai has not given owners or dealers an effective fix and has continued marketing and selling Palisade SUVs "as is," without disclosing the ongoing risk to buyers or lessees. The suit contends this leaves third-row passengers, often children, exposed to greater injury risk in the event of a side-impact or rollover collision.

The complaint, brought under the Magnuson-Moss Warranty Act and New York consumer protection law, seeks to represent all U.S. consumers who purchased or leased an affected Palisade. It is the latest in a string of legal challenges against the popular three-row SUV, following earlier suits over alleged brake problems and a tow-hitch wiring harness defect linked to fire risk.

Hyundai has not publicly responded to the specific allegations in the new filing. The Palisade, built primarily for the North American market and produced at Hyundai's Ulsan, South Korea plant among other sites, has been one of the automaker's top-selling SUVs in the U.S. in recent years.