GM Racketeering Suit Against FCA Rejected By Appeals Court1
A U.S. court of appeals has upheld a judge’s decision to dismiss a racketeering lawsuit filed by General Motors against Fiat Chrysler Automobiles (FCA), however GM still plans to pursue legal action against its rival separate from racketeering laws.
GM sued FCA in late 2019, accusing the automaker of conspiring with the UAW to receive preferential treatment during labor negotiations. The automaker said this conspiracy cost it billions of dollars, as the UAW did not offer GM the same concessions during the negotiations that it offered FCA.
U.S. District Judge Paul Borman dismissed GM’s case against FCA with prejudice in early 2020, saying there was no evidence that FCA conspired to harm GM through its relationship with the UAW. GM then filed another appeal seeking to have the racketeering lawsuit reinstated, which has now been dismissed by a three-judge panel in the U.S. 6th Circuit Court of Appeals, Reuters reports.
“Even accepting GM’s theory as true, the chain of causation between FCA’s bribes and GM’s injury is still too attenuated,” the panel said of the case, which was dismissed through a unanimous decision.
In a statement, GM said it “will continue to pursue our case against FCA and the other defendants in the Michigan state court to recover the damages caused to GM as a result of FCA’s admitted corruption.”
FCA was forced to pay a $30 million fine after it was found to have made $3.5 million in illegal payments to UAW officials between 2009 and 2016 in exchange for preferential treatment during contract negotiations. A total of 14 people have been convicted as part of the UAW corruption investigation, including three former FCA executives. Judge Borman previously ruled that FCA’s bribery scheme had mainly hurt paying UAW members, rather than GM.
Former GM Motors board member Joe Ashton was at the center of the FCA-UAW conspiracy. Ashton pleaded guilty to conspiracy to commit wire fraud and money laundering in 2020 after he was accused of being a “paid mole” on the GM board, which he was appointed to in 2014. Ashton is said to have received payment from FCA through offshore accounts in exchange for providing the automaker with information and intel on GM’s operations. FCA denied these allegations, likening the accusations to the plot of a “third-rate spy movie.” It reiterated this stance in a statement released this week, saying GM’s case is equivalent to a “third-rate spy movie, full of preposterous allegations.”
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If you check closely you will see that unions as a hole make a lot more than the people they represent.
They have much better benefits too.
Check where your union dues go.