GM’s Case Against FCA Dismissed with Prejudice

General Motors’ lawsuit against FCA for alleged racketeering was dismissed “with prejudice” on Wednesday. US District Court Judge Paul Borman, whose previous order for GM and FCA to meet privately was frozen by a higher court, has now thrown the case out completely.

In its case, GM alleged that FCA was trying to orchestrate a bribery conspiracy to corrupt bargaining with the United Auto Workers in a bid to harm and take over GM. And although there’s no doubt that there was corruption going on between FCA and the union, the judge disagrees that GM was the victim.

“FCA’s UAW workers were the direct victims of the bribes because they were paid less, and GM suffered only an indirect competitive harm,” wrote Borman in his Wednesday order. It cannot be inferred that FCA “wanted to increase GM’s labor costs by asking the UAW to deny GM concessions that it otherwise would have given.”

GM’s case has always looked like a long shot, according to legal experts, because racketeering is very difficult to prove. Indeed, Wednesday’s decision would seem to support that—and FCA is already claiming victory—but GM says it will continue to fight this fight.

“We strongly disagree with the District Court’s order and will pursue our legal remedies,” said GM in a statement. “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. The district court’s opinion is contrary to well-settled RICO case law and would let wrong-doers off the hook for the massive harm caused by their criminal conspiracy.”

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