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Federal Judge Tosses GM's Suit Against FCA

July 9, 2020
General Motors claims Fiat Chrysler paid off UAW officials to gain bargaining advantage on its rivals, costing GM billions, but the U.S. District Court found only "indirect competitive harm."

A federal judge on Wednesday July 8 dismissed General Motors Co.'s suit charging Fiat Chrysler Automobiles with bribing United Auto Workers leaders over many years in an effort to gain bargaining advantage over other automakers, namely GM. U.S. District Court Judge Paul Borman ruled that GM failed to show it was the primary victim of any alleged racketeering that FCA may have conducted, and that GM "suffered only indirect competitive harm."

In a statement, GM said it “strongly disagree(s)” with Borman's order, which will hinder GM's effort to recover an untold sum in settlement for what the suit alleges has cost the company billions of dollars over years of UAW bargaining efforts.

GM said it would pursue other legal means to pursue the case.

According to an FCA 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.”

The suit was filed in November 2019. Last month, Judge Borman directed General Motors CEO Mary Barra and FCA CEO Mike Manley to meet in person and work to settle the suit.

Later in June GM asked the U.S. Sixth Circuit Court of Appeals to allow it to overturn the Borman's order of the meeting, and to pursue the case without the negotiation. GM rejected Borman's characterization of its case as a "waste of time" and a "distraction," and reasserted the validity of its case and its effort to recover damages.

That Court accepted GM's appeal, meaning the CEOs did not meet, but leading to District Court Judge Borman dismissing the suit.

In a statement GM said: “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. The district court’s opinion is contrary to well-settled RICO case law and would let wrong-doers off the hook for the massive harm caused by their criminal conspiracy.”

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