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U.S. Supreme Court turns away GM bid to revive racketeering suit against Fiat Chrysler

2023-04-17T15:46:15Z

The U.S. Supreme Court on Monday declined to hear a bid by General Motors Co (GM.N) to revive its racketeering lawsuit against rival automaker Fiat Chrysler Automobiles (FCA), now part of Franco-Italian automaker Stellantis NV , over bribery allegations involving the United Auto Workers union.

The justices turned away an appeal by General Motors of a lower court’s dismissal of its lawsuit that accused Fiat Chrysler of bribing employee union officials in a bid to undermine GM and pressure the Detroit-based automaker into a merger with FCA.

Stellantis in a statement praised the court’s decision to turn away what it described as “baseless claims” by GM.

“Today’s decision upholding the district court’s dismissal of GM’s lawsuit is another reaffirmation that its claims are meritless,” Stellantis said.

GM did not provide an immediate comment in response to the court’s action.

GM brought a civil lawsuit in 2019 under the Racketeer Influenced and Corrupt Organizations Act, a law designed to target organized crime, claiming FCA bribed United Auto Workers (UAW) union officials over many years to corrupt the bargaining process and gain advantages, costing GM billions of dollars. GM sought an estimated $6 billion in damages.

A federal judge in Michigan dismissed the lawsuit in 2020, saying GM’s alleged injuries were not legally caused by FCA’s conduct. The Cincinnati-based 6th U.S. Circuit Court of Appeals last August agreed.

“Even accepting GM’s theory as true, the chain of causation between FCA’s bribes and GM’s injury is still too attenuated,” the 6th Circuit wrote.

A separate federal corruption investigation led to at least 17 criminal convictions, including former FCA employees and two former UAW presidents, after FCA and UAW officials admitted embezzling funds for their personal benefit, using the funds for liquor, cigars, golf outings and expensive hotel stays.

In 2021, FCA US was sentenced to probation after pleading guilty to making more than $3.5 million in illegal payments to UAW officers. FCA paid a $30 million fine while the UAW agreed to independent oversight to resolve the U.S. Justice Department investigation.

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A Fiat Chrysler Automobiles (FCA) sign is at the U.S. headquarters in Auburn Hills, Michigan, U.S. May 25, 2018. REUTERS/Rebecca Cook/File Photo

People walk across the plaza of the U.S. Supreme Court building on the first day of the court’s new term in Washington, U.S. October 3, 2022. REUTERS/Jonathan Ernst
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