FCA opposes GM's bid to revive racketeering lawsuit
Washington ― Stellantis NV on Monday urged the U.S. Supreme Court not to take up the racketeering lawsuit filed by General Motors Co. against a subsidiary, the former Fiat Chrysler Automobiles, saying it's not warranted and the legal question at issue wouldn't change the outcome in the case.
GM in January had asked the justices to review its claims against FCA after losing an appeal in August when the U.S. 6th Circuit Court of Appeals affirmed a federal judge's decision to toss the lawsuit filed in 2019.
GM had sued its crosstown rival alleging FCA's late CEO Sergio Marchionne orchestrated a multimillion-dollar racketeering conspiracy that used bribes to corrupt three rounds of bargaining with the United Auto Workers in order to harm GM. The Detroit automaker has said it lost "billions" as a result of the bribery conspiracy to make GM's labor costs high during negotiations with the UAW.
The Detroit automaker, in its January filing, contended FCA had "directly harmed GM, both by ensuring that GM would consistently be denied concessions the UAW gave to FCA, and by corrupting the pattern-bargaining process to force GM to shoulder more than $1 billion in labor costs above what it would have expended absent FCA’s racketeering."
GM alleged that the effort to impose these costs on GM was "no accident" and the goal of FCA’s "scheme to use bribery and corruption to injure a rival and strong-arm GM into a merger."
Stellantis/FCA in its response filed with the Supreme Court on Monday noted the high court has held that only a "directly injured” victim of alleged racketeering activity can successfully bring a civil claim under the the Racketeer Influenced and Corrupt Organizations Act (RICO), and highlighted the 6th Circuit's conclusion that, even if GM's legal theory is true, its alleged competitive harm is "too attenuated."
"As this Court has repeatedly made clear, intent to harm is not the test for proximate cause under RICO; directness is," wrote lawyers for FCA.
They also said there's no disagreement among the federal appeals courts on the legal question at hand, and that resolving the question would not change the outcome because GM's RICO claims fail for other "independent" reasons.
"And there is no good reason for this Court to address proximate causation under RICO in the context of allegations that both the court of appeals and the district court agreed strain the bounds of plausibility and are contrary toeconomic reason," FCA's lawyers wrote.
"At bottom, GM seeks this Court’s review because it disagrees with the court of appeals’ fact-bound application of well-settled legal principles articulated by this Court over the last three decades in multiple RICO decisions. ... The petition for a writ of certiorari should be denied."
The justices could decide in the coming weeks whether to review GM's case.
"We believe Supreme Court review of the 6th Circuit’s decision is appropriate, as its incorrect application of the federal racketeering statute would allow FCA to escape liability for the harm it inflicted on GM through its admitted corruption," GM spokesperson Maria Raynal said.
mburke@detroitnews.com