A U.S. appeals court on Monday put a stay on a lower court’s order requiring CEOs from General Motors (GM) and Fiat Chrysler Automobiles (FCA) to resolve GM’s racketeering lawsuit.
“In order to provide enough time to consider the matters raised in GM’s petition, and having considered the relevant factors, we conclude that a temporary stay is appropriate,” the Sixth Circuit Court of Appeals said in a court filing.
GM stated it looked forward to the appeals court’s review and decision.
FCA said again that GM’s lawsuit was meritless and in a filing called on the appeals court to reject GM’s request to reassign the case to a new judge.
On Friday, GM asked a U.S. appeals court to permit it to continue pursuing its civil racketeering lawsuit against FCA, declining U.S. District Court Judge Paul Borman’s belittling of the complaint. GM referred to Borman’s order as “unprecedented” and “a profound abuse” of judicial power.
GM’s appeal came less than a week after Borman described its lawsuit as a “waste of time and resources” at a time when both automakers should be focused on dealing with the consequences of the coronavirus pandemic.
Borman ordered GM CEO Mary Barra and FCA CEO Mike Manley to meet by July 1 to negotiate a resolution and later amended his order to permit other officials in their place. On Monday, Borman stated in an order that the July 1 call would simply entail the executives answering “yes” or “no” on whether the case in question had been resolved.
Judges routinely call for parties to find out settlements and GM simply wasn’t satisfied with some of Borman’s questions in the last hearing, according to FCA.
Removing Borman would be “a direct affront to the rule of law” FCA noted in the filing. “GM’s ‘bruised feelings’ about facing tough questions cannot be a valid basis for replacing the judge.”
GM took legal action against FCA last year, alleging the Italian-American company’s executives of bribing United Auto Workers (UAW) union officials to secure labor agreements that put GM at a disadvantage. FCA is going through an investigation by the U.S. Justice Department as part of a wide-ranging probe of UAW corruption.
GM’s accusations came as FCA and French automaker PSA were preparing for a $50 billion worth merger. FCA has said the suit was aimed at disrupting that deal. GM has said the suit has nothing to do with the merger.
