DETROIT — General Motors’ effort to revive its racketeering lawsuit against Fiat Chrysler Automobiles was denied in a Friday ruling by a federal judge in Detroit, who said new evidence the automaker presented was “too speculative.”
U.S. District judge Paul Borman dismissed the case with prejudice in July after calling it a distraction for the companies and a “waste of time and resources.” GM’s original racketeering suit, filed in November, claimed that its smaller rival secured an unfair labor-cost advantage by bribing UAW officials during key contract negotiations covering wages and benefits.
But GM came with new evidence earlier this month, saying in its amended complaint that FCA and co-conspirators used a network of foreign bank accounts containing millions of dollars in Switzerland, Luxembourg, Liechtenstein, Italy, Singapore and the Cayman Islands to harm GM.
Friday’s filing recounted GM’s reasoning to reopen the case, in which it “argued that 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.”
The court said Friday that it disagrees with GM.
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.”
GM said it would appeal the ruling to the Sixth Circuit Court of Appeals.
“Today’s decision is disappointing, as the corruption in this case is proven given the many guilty pleas from the ongoing federal investigation,” the automaker 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.”
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 ex-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.”
Reuters contributed to this report.
