GM racketeering suit against Fiat Chrysler rejected again News
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GM racketeering suit against Fiat Chrysler rejected again

A federal judge in Detroit on Friday rejected General Motors Co.’s amended racketeering lawsuit against its rival Fiat Chrysler Automobiles NV.

This judgment is the most recent activity in a lawsuit filed by General Motors Co. (GM) in November of 2019, in which GM accused Fiat Chrysler Automobiles NV (FCA) of paying off United Auto Workers (UAW) leaders to gain favorable contract terms for union workers during the 2015 collective bargaining negotiations.

The court rejected GM’s original claims on July 8, stating that GM failed to state a claim under the Racketeer Influenced and Corrupt Organizations Act (RICO) because GM’s injuries were not proximately caused by FCA’s alleged violations of the act.

GM filed its Motion to Alter or Amend Judgment on August 3, stating that the court improperly applied a strict proximate cause requirement and dismissed with prejudice. Additionally, GM said that it had “reliable information indicating the existence of foreign [bank] accounts potentially connected to the scheme alleged in GM’s Complaint.” The foreign bank accounts indicating in the complaint were controlled by “various individuals previously and currently employed by FCA and former UAW Presidents and officers.”

However, in denying GM’s Motion to Alter or Amend Judgment, Judge Paul Borman said, “The Court disagrees with GM. Neither the application of 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.” Borman continued by stating that GM’s new evidence does “very little to corroborate [GM’s] theory” that FCA “used ‘a broad network of foreign bank accounts containing millions of dollars’ to facilitate a bribery scheme that included two ‘paid mole[s]’ inside GM” during the 2015 collective bargaining negotiations.

According to a recent article from the Detroit Free Press, GM is planning to appeal. In a statement provided by spokesman David Caldwell, GM “will appeal the District Court’s ruling to the 6th Circuit Court of Appeals.”