Judge Denies GM Bid to Reinstate Racketeering Case Against FCA

Matt Posky
by Matt Posky
judge denies gm bid to reinstate racketeering case against fca

General Motors’ attempt to revive its RICO lawsuit has failed after a federal court claimed the new evidence presented was too speculative to start the legal process back up. U.S. District Judge Paul Borman dismissed the case with prejudice in July, calling it a “waste of time,” but GM returned with new evidence it hoped might turn the tables.

Filed in November, the General’s case against FCA claims its rival finagled a labor advantage by bribing UAW officials during key contract negotiations. With a federal corruption case still probing the union, and with Fiat Chrysler’s known involvement, it seems like GM might have had a case here. But Judge Borman didn’t think there was sufficient evidence before, and hasn’t changed his mind since.

According to Automotive News, General Motors claimed the court “committed two clear errors of law — applying a strict proximate cause requirement and dismissing the Complaint with prejudice — and says that newly available evidence addresses the concerns raised by the Court and therefore requires the Court to amend the judgment, reopen the case, and allow GM to file an amended complaint.”

Armed with newly claimed evidence, GM updated its complaint to suggest FCA and co-conspirators used a series of bank accounts containing millions of dollars in the Cayman Islands, Italy, Liechtenstein, Luxembourg, Switzerland and Singapore to inflict direct harm upon GM.

From Automotive News:

GM named two former UAW officials — Joe Ashton, who joined GM’s board in 2014 after retiring as the head of the union’s GM department, and former President Dennis Williams — as defendants in its amended complaint, along with Alphons Iacobelli, who left FCA in 2015 and then joined GM. The complaint also makes allegations against former UAW President Ron Gettelfinger, who has not been named or implicated in any previous cases of UAW corruption. Gettelfinger angrily denied the accusations.

GM accused FCA of providing Iacobelli and a family member with “millions of dollars” through funds currently in accounts in Italy, Liechtenstein, Switzerland and Singapore.

FCA said in a filing Monday that GM’s proposed amended complaint was “full of preposterous allegations” and compared its claims to a “third-rate spy movie.”

The corruption charges do have some merit. Both Ashton and Iacobell have been convicted on bribery/union-corruption charges while the others are involved in an ongoing federal probe. But Iacobell’s lawyer, Michael Nedelman, claimed GM had only compiled more allegations without proof and was engaging in a predatory suit while the opportunity presented itself.

It seems Judge Borman agrees. He said there wasn’t sufficient proof and failed to see how it impacted GM to a point that would warrant compensation.

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

The automaker added that it would appeal the ruling to the Sixth Circuit Court of Appeals.

[Image: Michael Urmann/Shutterstock]

Join the conversation
2 of 3 comments
  • Matt51 Matt51 on Aug 14, 2020

    Don't let the door hit you on the way out Barra. Any "evidence" GM had should have been handed over to the government, where criminal convictions would strengthen GM's case for compensation. If their "evidence" (delusions) aren't strong enough to turn over to government prosecutors, then GM has no case. At some point, FCA will countersue GM for illegally interfering in their merger.

  • Aja8888 Aja8888 on Aug 14, 2020

    GM need to focus on building vehicles where the real crime is being committed and leave the courtroom stuff alone.

  • SCE to AUX The UAW may win the battle, but it will lose the war.The mfrs will never agree to job protections, and production outsourcing will match any pay increases won by the union.With most US market cars not produced by Detroit, how many people really care about this strike?
  • El scotto My iPhone gets too hot while using the wireless charging in my BMW. One more line on why someone is a dumbazz list?
  • Buickman yeah, get Ron Fellows each time I get a Vette. screw Caddy.
  • Dusterdude The Detroit 2.5 did a big disservice by paying their CEO’s so generously ( overpaying them ) It is a valid talking point for for the union ) However , the bottom line - The percentage of workers in the private sector who have a defined benefit pension plan is almost non existent - and the reason being is it’s unaffordable ! . This is a a huge sticking point as to have lower tier workers join would be prohibitive ( aside from other high price demands being requested - ie >30% wage gain request ) . Do the math - can a company afford to pay employees for 35 years , followed by funding a pension for a further 30 years ?
  • El scotto Human safety driver? Some on here need a human safety thinker.