A federal judge on Wednesday dismissed a racketeering lawsuit General Motors (GM) had filed against rival Fiat Chrysler Automobiles NV (FCA), saying the biggest U.S. automaker’s alleged injuries were not caused by FCA’s alleged breaches.
GM officials said that they “strongly disagree” with the order by U.S. District Court Judge Paul Borman, whom the automaker had sought to have removed from the case, and would appeal.
“There is more than enough evidence from the guilty pleas of former FCA executives to conclude that the company engaged in racketeering, our complaint was timely and showed in detail how their multi-million dollar bribes caused direct harm to GM,” GM said
The automaker added that the judge’s decision “would let wrongdoers off the hook”.
GM filed the racketeering lawsuit against FCA in November 2019, accusing rival of bribing United Auto Workers (UAW) union officials over years to corrupt the bargaining process and take advantage, costing GM billions of dollars. GM was looking for “substantial damages” that one analyst said could have totaled no less than $6 billion. FCA had called the case meritless since November and asked it to be dismissed.
On Wednesday, Borman dismissed the lawsuit “with prejudice,” indicating that GM cannot re-submit the complaint.
“The direct victims of defendants’ alleged bribery scheme are FCA’s workers,” Borman wrote regarding FCA. “GM’s high labor costs were not an injury proximately caused by FCA’s bribes, and any competitive injury that GM suffered as a result of FCA’s advantage in labor costs is an indirect injury.”
“The dismissal of GM’s complaint with prejudice earlier today vindicates our position,” FCA stated.
On Monday, the Sixth U.S. Circuit Court of Appeals turned down GM’s petition to remove Borman from the case but said the two automakers’ CEOs didn’t have to meet to try to settle the case as Borman had ordered. Borman had called the lawsuit “a waste of time and resources” during the last month.