A federal judge has dismissed General Motors’ lawsuit against Fiat Chrysler Automobiles (FCA), as outlined in a report from Automotive News. The lawsuit, which was filed last November, accuses former FCA CEO Sergio Marchionne of conducting a bribery scheme with United Auto Workers (UAW) labor union leaders to gain unfair contract advantages, with the ultimate goal of pressuring General Motors into a merger with FCA.
U.S. District Judge Paul Borman said that FCA had not violated federal racketeering laws, and that the parties most harmed by the bribery scheme were in fact FCA workers.
General Motors said that it strongly disagreed with the ruling and that it would seek other legal remedies.
“There is more than enough evidence from the guilty pleas of former FCA executives to conclude that the company engaged in racketeering, our complaint was timely and showed in detail how their multi-million dollar bribes caused direct harm to GM,” said GM spokesman Jim Cain in a statement. “The district court’s opinion is contrary to well-established RICO case law and would let wrong-doers off the hook for the massive harm caused by their criminal conspiracy.”
FCA also responded to the ruling, saying in a statement, “We have said from the very outset that this was a meritless lawsuit. The dismissal of GM’s complaint with prejudice earlier today vindicates our position.”
Although Borman conceded that GM’s first causation theory that FCA participated in a pay-to-harm scheme had “some appeal,” it eventually “fails on closer look,” as General Motors can’t argue that it would negotiate a more favorable labor contract with the UAW without the FCA bribes.
Borman went on to say that the second theory of causation is through “even-more-remote” injury, wherein General Motors alleges FCA bribed the UAW to designate it as the lead company for the 2015 labor negotiations, enabling FCA to maneuver into a contract that was less favorable for GM.
GM CEO Mary Barra in 2018
Last month, Borman ordered General Motors CEO Mary Barra and FCA CEO Mike Manly to meet in person in order to find a mutual agreement and avoid drawn-out court proceedings he labeled as “a waste of time and resources.”
General Motors responded by asking an appeals court to overturn the decision and to remove Borman from the case.
In response, the 6th U.S. Circuit Court of Appeal rejected GM’s request for a new judge, but did agree that Borman had overstepped when ordering the two CEOs to meet.
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Comments
Anyone with common sense knew that this would be nearly impossible to prove. Another waste of money, time and resources. I can’t believe GM really thought they had a shot at this.
Time for GM to stop this stupidity, while they are wasting money on Lawyers and losing market share, a much smaller car company operating out of a unwanted former GM factory has become the worlds most valuable carmaker while GM share price is in the doldrums
I think sensible people can see GM’s point. The argument that they can’t prove how much damage they incurred seems like a straw man to divert from the fact that FCA DID cause damage. FCA’s racketeering intent is clear to anyone with a brain, and even prior courtroom confessions support GM’s claims.
This judge –the JUDGE– described GM’s case as “a waste of time and resources”??? That’s precisely why they are taking FCA to court… for wasting THEIR time and resources!!! The judge seems hostile to GM and he should have been removed. I hope this setback just makes GM more determined and that they pursue the case with more vigor. FCA MUST PAY or they will just do it again!
The case was dismissed “with prejudice” meaning it cannot be appealed or revived. This usually happens when a judge sees a lawsuit as frivolous. GM can try other avenues to sue FCA but it gas been more or less handcuffed. FCA is now likely to go to court and demand GM reimburse it for legal costs.
With prejudice means that the same case or close to the same case cannot be refiled. However, “with prejudice,’ in and of itself does not mean that there is no appeal. Judicial error would have to be shown or some other aspect of law or of this particular judge would have to be shown to overturn having dismissed the case from the legal process. As I said once before, usually in these cases, it is only the lawyers who win.
Sorry but GM messed up from the start and it’s not really a straw man. GM chose to use the RICO statute against FCA like the crime mobs. GM then tried to prove its case by using a series of events that led up to the bribery but not the actual bribery. The RICO statute is not designed for that. The RICO is used to show that money was actually taken out of your pocket. Yes, there were witnesses in court, but that doesn’t prove the negotiation process was corrupted. Neither does it prove that money was taken from GM. The truth is in a case like this, the FCA employees would be more effected than anyone at GM. FCA employees would have a much better chance of proving FCA top brass threatened or harmed them in a RICO lawsuit not GM. It really seems to me that GM did not have a good understanding of the RICO statute.
In court it’s not what you know, but what you can prove. Everyone remembers Sergio telling Marry, “I can hug you like a bear”. Sergio is dead now, and the UAW has been investigated on so much corruption already that even the corruption investigations may be corrupted. Maybe you and others on here have never heard the term, “let sleeping dogs lie”. In other words, maybe there is some truth to the lawsuit, but where is the proof at? Will trying to find that proof be worth it’s weight in gold? Is GM just wasting everyone’s time like they always do? And lastly, just to get under all the GM lover’s skin, maybe GM is just mad that the poorest of the Big 3 who almost went under several times (Chrysler) is now merged/merging with every European brand GM used to deal with and will probably have a better corporate structure. Oh, did I mention the “cheap Italian crap brand” also makes the pickup truck and muscle car with the better sales? Those are the 2 most loyal markets in the American auto industry and the truest definition of American automobile of all thats left. GM is just mad that it’s empire is dwindling and Chrysler is somehow expanding after near death? GM is in denial.
Get rid of the auto unions and this would save everyone money! Jobs that build vehicles are beholden to demand. Auto unions are corrupt anyways. So good luck proving this case. It is a waste of time. They need to put that money to better use. For one maybe advertise some of their good vehicles. Like the CT4 and CT5.
I think most readers here are more concerned about the lawsuit against General Motors for their defective 8L45 and 8L90 automatic transmissions that they will not address ..I know I am (because I own one ,2017 Cadillac ATS Premium Luxury with the 8L45 transmission)