November 23, 2020

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Court suspends meeting between GM and Fiat Chrysler over RICO lawsuit


General Motors Chairman and CEO Mary Barra addresses the gathering Wednesday, June 3, 2020 during a press conference of corporate leaders speaking out against racism and injustice at City Hall in Detroit, Michigan.

GM

A judge-ordered meeting between General Motors CEO Mary Barra and Fiat Chrysler CEO Mike Manley to resolve a civil racketeering lawsuit has been temporarily suspended by a federal appeals court.

The 6th U.S. Circuit Court of Appeals on Monday said an order by U.S. District Court Judge Paul Borman last week calling for the meeting to occur by July 1 has been “stayed pending further consideration by this court.”

The suspension comes three days after GM filed a petition to remove Borman from the case. He previously called GM’s civil racketeering lawsuit against Fiat Chrysler a “waste of time.” GM also asked for the appeals court to vacate the order mandating the meeting.

Fiat Chrysler filed a response Monday questioning GM’s intentions for attempting to remove Borman and having the case reassigned.

“GM may be unhappy about questions Judge Borman posed during oral argument that bore upon the validity of GM’s claims—claims FCA believes are wholly meritless—but asking tough questions is a court’s mandate; it is hardly grounds for a judge to be removed from a case,” said the filing.

Attorneys for Fiat Chrysler argue there’s “nothing remarkable” about a judge asking the parties to explore, at an early stage of a litigation, whether a “settlement is feasible.”

Fiat Chrysler also reiterated in a statement Monday that it contends the lawsuit is meritless. “FCA will continue to defend itself vigorously and pursue all available remedies in response to this groundless lawsuit,” it said.

Jim Cain, a GM spokesman, said the company looks “forward to the Sixth Circuit’s review and decision.”

Fiat Chrysler Automobiles (FCA) CEO Mike Manley

Massimo Pinca | Reuters

GM said last week it rejected “the notion that seeking justice for the direct harm caused to GM is a ‘waste of time,’ a ‘distraction’ or a ‘diversion'” from more pressing and larger issues such as the coronavirus pandemic and racial injustice following the death of George Floyd. All were points used by Borman during a hearing Tuesday where Fiat Chrysler asked the judge to dismiss GM’s lawsuit.

GM filed the racketeering lawsuit in November, alleging the company was harmed as a result of “corrupted” collective bargaining where Fiat Chrysler leaders bribed union officials to give the company cheaper labor costs. Although the United Auto Workers union uses “patterned” bargaining, GM said it did not receive the same benefits as the Italian-American automaker.

Much of the lawsuit centers on the late-Fiat Chrysler CEO Sergio Marchionne, who unexpectedly died in 2018 and has been implicated in a federal probe into bribery and corruption of the union.

The U.S. Department of Justice’s case is ongoing, however federal prosecutors in May said GM was not currently a target of the yearslong investigation.

GM is seeking unspecified damages in the billions that, according to the lawsuit, “will be used for investment in the United States to grow jobs and for the benefit of employees.”

The federal probe has resulted in 14 convictions, including ex-UAW President Gary Jones and 10 other officials affiliated with the union as well as three former executives with Fiat Chrysler.



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