A federal judge in Detroit has denied General Motors’ effort to revive its racketeering lawsuit against Fiat Chrysler Automobiles.
U.S. District Court Judge Paul Borman issued an order Friday, saying the court did not err in its earlier actions and that GM’s “newly discovered evidence is too speculative to warrant reopening this case.”
Borman said in his order that GM’s new evidence “does not create a reasonable inference that FCA was bribing individuals to infiltrate GM as part of a scheme to directly harm GM, and, therefore, does not change the court’s conclusion that GM’s alleged injuries were not proximately caused by FCA’s alleged RICO violations,” a reference to the Racketeer Influenced and Corrupt Organizations Act.
GM is already planning an appeal.
“Today’s decision is disappointing, as the corruption in this case is proven given the many guilty pleas from the ongoing federal investigation. GM’s suit will continue — we will not accept corruption. Civil plaintiffs have the right to pursue their claims, including the right to amend, add new information and take discovery. We will appeal the District Court’s ruling to the 6th Circuit Court of Appeals,” according to a company statement provided by spokesman David Caldwell.
FCA, in responding to the order, echoed its earlier comments on the case.
“Judge Borman’s ruling this morning once again confirms what we have said from the beginning — that GM’s lawsuit is meritless — and its attempt to submit an amended complaint under the guise of asking the court to change its mind was nothing more than a baseless attempt to smear a competitor that is winning in the marketplace,” according to a statement sent by FCA spokesman Jeff Bennett.
FCA had previously blasted GM’s efforts as “despicable,” saying its proposed amended complaint “reads like a script from a third-rate spy movie, full of preposterous allegations. …”
GM, which had hired investigators, said it had found new evidence of offshore accounts in the Cayman Islands, Switzerland, Luxembourg and other countries designed to fuel a bribery scheme to harm GM and also claimed ex-GM board member Joe Ashton, who is awaiting sentencing in the UAW corruption probe, was actually a paid mole.
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GM’s original lawsuit, filed in November, claimed FCA corrupted the bargaining process, costing GM billions of dollars, in an effort to hurt GM and force a merger of the two companies, which never happened.
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The case, however, also provided additional story lines when Borman ordered the companies’ CEOs, Mary Barra for GM and Mike Manley for FCA, to meet for a possible resolution, something which GM fought and which ultimately did not happen. Borman had called the case a waste of resources should it move forward and said that the country, buffeted by the coronavirus pandemic and the frustration over racism that boiled over after the death of George Floyd at the hands of Minneapolis police, needed to heal.
The lawsuit pulled heavily from the UAW corruption scandal, although the UAW was not a defendant. That ongoing scandal has led to 14 convictions of former union and FCA officials, including former UAW President Gary Jones. The three ex-company officials, Michael Brown, Jerome Durden and onetime lead FCA labor negotiator Alphons Iacobelli, were also named in the suit by GM. Iacobelli’s attorney notably compared GM’s tactics in its suit to those of disgraced Sen. Joe McCarthy’s anti-communist witch-hunts.
Contact Eric D. Lawrence: elawrence@freepress.com. Follow him on Twitter: @_ericdlawrence.