Stellantis captured a legal victory over rival General Motors after an appeals court judge ruled the original dismissal of GM’s lawsuit claiming Fiat Chrysler conspired with UAW officials to undermine GM’s competitive position.
Tthe U.S. Sixth Circuit Court of Appeals in Cincinnati ruled a U.S. District Court Judge Paul Borman in Detroit was correct in the summer of 2020 when he dismissed GM’s sweeping lawsuit asserting Fiat Chrysler worked with key union officials to hurt the automaker’s business.
Stellantis hails ruling
“GM’s lawsuits are meritless as we have said all along,” Stellantis said in an email about GM’s lawsuit against Fiat Chrysler, which last year merged with the French automaker PSA to create Stellantis.
“We welcome today’s unanimous decision by the Federal Court of Appeals upholding the district court’s dismissal of this baseless claim. We will continue to defend ourselves vigorously against these frivolous allegations and we will not be distracted from our focus on competing and winning in the marketplace.”
The decision of the U.S. Sixth Circuit upheld Borman’s original ruling that GM’s complaint FCA’s effort to manipulate UAW officers were the “direct cause” of any harm inflicted on GM as fell short of the federal RICO statute.
In addition, the affidavits GM used to support its case, which originally was filed in November 2019, did not contain sufficient evidence to require a fresh look at the entire case, Borman said. The affidavits indicated FCA set up a network of foreign bank accounts to influence union officials.
“GM’s newly discovered evidence does not create a reasonable inference that FCA was bribing individuals to infiltrate GM as part of a scheme to directly harm GM, and, therefore, does not change the Court’s conclusion that GM’s alleged injuries were not proximately caused by FCA’s alleged RICO violations. GM’s newly discovered evidence is not of such a nature as would probably produce a different result. It does not support amending or altering the judgment issued in this case,” Borman wrote.
Borman also described the entire case as a “waste of time.”
Case built around federal probe of UAW
The ruling by the Court of Appeals leaves GM with few options except to appeal to the U.S. Supreme Court, which is unlikely to take up the case.
However, GM also said in statement it planned to pursue its case in state court in Michigan.
GM originally filed the high-profile lawsuit on the heels of a federal probe into the UAW, which uncovered the fact that FCA had made more than $1 million in illicit payments to officials responsible for administering union’s labor contract with FCA. General Holifield, the head of the UAW’s Fiat Chrysler department died, before he could be indicted, but Holifield’s wife, Monica, and several other UAW officials pled guilty and went to prison for their part in the scandal.
Last year, Stellantis agreed to pay a $30 million fine for violations of federal labor law by FCA.
Three FCA executives, including the company’s vice president of labor relations, Alphons Iacobelli, also went to prison for their part in the effort to influence union officials uncovered by federal investigators from the FBI and the Department of Labor.
GM maintained in its lawsuit FCA CEO Sergio Marchionne was mastermind behind the scheme, which gave FCA a competitive advantage worth billions of dollars to GM. Marchionne died in 2018, and he was never charged for any crime. After his death the U.S. Attorney in Detroit cryptically noted the U.S. Department of Justice would not bring criminal charges against a dead man.