General Motors’ lawsuit claiming rival Fiat Chrysler had corrupted officials of the United Auto Workers union in a bid to gain a competitive advantage, has been dismissed by a federal judge in Detroit.
GM filed the high-profile lawsuit last November, but Judge Paul Borman sided with FCA, granting its motion to dismiss the lawsuit that the company’s lawyers said was without merit
“GM’s failure to plead sufficient facts showing that it was proximately harmed ‘by reason of’ Defendants’ alleged § 1962 violations means that it did not state a cognizable civil RICO claim,” Borman said in his 30-page ruling that reviewed GM original allegations and legal arguments.
(Appeals court nixes GM-FCA CEO pow-wow.)
“We’re considering our options. I don’t want to go into specifics. An appeal is definitely an option,” GM spokesman James Cain said in a statement.
FCA, as it maintained from the start, said the GM’s allegations and its demand for one billion dollars in damages were without merit. “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,” FCA said in statement.
Last month, Borman had described GM’s lawsuit as a “waste of time” but ordered GM Chairman Mary Barra and FCA CEO Mike Manley to meet, without their lawyers in the room, to try and settle the matter. He later relented and agreed to allow lawyers in the meeting — that never happened.
(GM appeals ruling forcing CEOs to meet and resolve dispute, judge amends decision.)
However, GM appealed the order and the U.S. Sixth Circuit Court of Appeals in Cincinnati, which granted GM’s petition, setting aside Borman’s order. The appeals court effectively denied GM’s request to have Borman removed from the case.
Now that Borman ruled, the losing side can appeal – to U.S. Sixth Circuit Court of Appeals again – asking the ruling be set aside the decision, insuring that the case will take months if not years to complete.
GM filed its lawsuit after federal investigators had spent several months uncovering a corrupt bargain between FCA executives and UAW officers.
(Judge orders GM, FCA CEOs to meet to resolve “waste of time” lawsuit.)
The investigation has led to the conviction of three FCA executives and 10 UAW officers and officials as well as the widow of the former UAW officer in charge of union’s FCA section when the bribery and other corrupt acts that served as the basis of the GM lawsuit took place.
