GM Not Yielding in Legal Tussle With FCA

General Motors will press forward with its lawsuit against Fiat Chrysler Automobiles, accusing FCA of bribing UAW officials to undermine GM’s competitive position, after a federal judge refused to reinstate the case.

Friday’s ruling by U.S. District Judge Paul Borman (below, left) “is disappointing, as the corruption in this case is proven given the many guilty pleas from the ongoing federal investigation,” GM says in a statement. “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. We will appeal the District Court’s ruling to the Sixth Circuit Court of Appeals.”

According to Borman, however, GM’s claims FCA conspired with UAW officials failed to pass legal muster.

Borman says in his latest ruling GM failed to show FCA efforts to manipulate UAW officers were the “direct cause” of any harm inflicted on GM as required by federal Racketeer Influenced and Corrupt Organizations (RICO) laws.

In addition, the affidavits GM is now using to support its complaint, which originally was filed in November, lacked sufficient evidence to require a fresh look at the case, Borman says. The affidavits filed earlier this month state FCA had set up a network of foreign bank accounts to influence union officials, according to court records.

US District Judge Paul Borman

“GM’s newly discovered evidence does not create a reasonable inference that FCA was bribing individuals to infiltrate GM as part of a scheme to directly harm GM, and, therefore, does not change the Court’s conclusion that GM’s alleged injuries were not proximately caused by FCA’s alleged RICO violations,” Borman wrote.

“GM’s newly discovered evidence is not of such a nature as would probably produce a different result. It does not support amending or altering the judgment issued in this case,” the Detroit-based judge says.

GM’s appeal to the Sixth Circuit Court of Appeals could take a year or more to complete.

The new ruling by Borman, who last month had dismissed GM’s original lawsuit and has described the entire case as a “waste of time,” apparently leaves GM with few options except to appeal.

The affidavits, stating private investigators had uncovered evidence FCA funneled money to UAW officials through bank accounts in Europe, Asia and Central America and spied on GM, are intensifying what is an unusually bitter legal fight.

“GM’s proposed amended complaint is the latest example of the lengths it is prepared to go to, attacking a competitor that is winning in the marketplace with yet more baseless accusations,” FCA lawyers note in court papers asking Borman to reject the amended pleadings.

Former UAW President Ron Gettelfinger also says GM’s claims that he and members of his family received payments through foreign bank accounts in return for promoting FCA’s business objectives at GM’s expense were false and defamatory.

“I want to be unequivocally clear: I have never had control over any financial account in any foreign country, nor has any member of my family,” Gettelfinger says in a statement. “Further, neither I nor any member of my family have ever received one cent from a foreign account like GM claimed. Never.”

Gettelfinger, UAW president from 2002-2010, is not linked to the embezzlement and racketeering scandal that has engulfed the union in the past three years. At least 13 UAW officials and FCA executives have pleaded guilty as part of that investigation.

GM, despite antagonizing the UAW and drawing harsh comments from the trial judge, says it stands by its lawsuit and the new affidavits that describe a broad conspiracy in which the late FCA CEO Sergio Marchionne used foreign bank accounts to bribe union officials and harm GM’s competitive position. GM has said the conspiracy has cost it more than $1 billion.

Meanwhile, the UAW says it would like to see the evidence supporting the existence of the secret bank accounts. Neither the U.S. Attorney’s Office, nor anyone else, has raised such an allegation with the UAW, the union says.