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What Is GM Doing? Racketeering Lawsuit Against FCA Denied 2nd Time

It’s a bit hard to understand why GM thinks it has such a compelling racketeering case against Fiat Chrysler. That’s because it has been denied a second time. The lawsuit was denied by a federal judge who called it “too speculative.” The case was dismissed with prejudice in July. Judge Paul Borman called it a “waste of time and resources.” With this second dismissal, GM vows to appeal to the Sixth Circuit Court of Appeals.

GM’s argument is that Fiat Chrysler received a cheaper labor rate by bribing UAW officials during contract wage negotiations. It says Fiat Chrysler hid the bribes through a series of foreign bank accounts. These locations included Switzerland, Luxembourg, Liechtenstein, Italy, and other countries. 

This second argument revolved around the terminology used in the first lawsuit by both GM and the Court. It tried to show new evidence it said covered the Court’s basis for dismissal of the first lawsuit. GM wanted the Court to agree to allow them to file an amended complaint. But today the court said it disagreed with GM.

“The Court denies GM’s Motion to Alter or Amend Judgment”

Mark Reuss, President of General Motors, announces that GMs Detroit-Hamtramck Assembly plant will build the all-electric Cruise Origin self-driving shuttle
Mark Reuss, the president of GM | Getty

According to Automotive News Borman said, “neither the application of the strict proximate cause standard nor the decision to dismiss with prejudice, rather than without prejudice, was a clear legal error, and GM’s newly discovered evidence is too speculative to warrant reopening this case. Therefore, the Court denies GM’s Motion to Alter or Amend Judgment.”

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“Today’s decision is disappointing, as the corruption, in this case, is proven given the many guilty pleas from the ongoing federal investigation,” GM said in a statement. “GM’s suit will continue. We will not accept corruption. Civil plaintiffs have the right to pursue their claims. This includes the right to amend, add new information, and take discovery.”

“Judge Borman’s ruling this morning once again confirms what we have said from the beginning. 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,” FCA said Friday.

Former UAW President Ron Gettelfinger is also alleged to have been actively involved

GM trucks can't compete with Ford and Ram
Mark Reuss, president of General Motors Co, speaks to the media at the GM Flint Assembly. | Getty

GM says UAW officials Joe Ashton, former President Dennis Williams, and Alphons Iacobelli, who left FCA in 2015 and joined GM, are the primary targets. But that’s not the only UAW heads it has filed against. Former UAW President Ron Gettelfinger is also alleged to have been actively involved. 

GM says FCA funneled “millions of dollars” to Iacobelli and a family member through the above banks. FCA said in a filing Monday that GM’s proposed amended complaint was “full of preposterous allegations.” It compared its claims to a “third-rate spy movie.”

While we all thought this would be over with it seems like GM is hellbent on pursuing the RICO lawsuit through the courts.