U.S. appeals court rejects GM racketeering suit against Fiat Chrysler

·2 min read
FILE PHOTO: The General Motors Co. headquarters is seen in Detroit, Michigan

By David Shepardson

(Reuters) -A U.S. appeals court on Thursday upheld a 2020 ruling that tossed out a racketeering lawsuit filed by General Motors Co against rival Fiat Chrysler Automobiles (FCA), now part of Stellantis NV, and former executives.

GM filed the racketeering lawsuit in November 2019, alleging FCA bribed United Auto Workers (UAW) union officials over many years to corrupt the labor contract bargaining process and gain advantages, costing GM billions of dollars.

"Even accepting GM’s theory as true, the chain of causation between FCA’s bribes and GM’s injury is still too attenuated," said the unanimous opinion of the three-judge panel of the U.S. 6th Circuit Court of Appeals.

GM said it strongly disagrees with the ruling, and said it will still pursue other claims not based on the racketeering laws.

"We will continue to pursue our case against FCA and the other defendants in the Michigan state court to recover the damages caused to GM as a result of FCA’s admitted corruption," GM said in a statement.

Stellantis in a statement called GM’s lawsuits "meritless."

"We will continue to defend ourselves vigorously against these frivolous allegations," Stellantis said, as it compared GM's filing to a "third-rate spy movie, full of preposterous allegations."

To date, 16 former UAW and FCA employees have pleaded guilty in a five-year federal corruption investigation that ensnared two former UAW presidents after officials admitted embezzling funds for their personal benefit, using the funds for liquor, cigars, golf outings and expensive hotel stays.

In August 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 Justice Department probe.

(Reporting by David Shepardson and Nate Raymond; editing by Jonathan Oatis and Leslie Adler)