GM Wants New Judge for FCA Racketeering Lawsuit
Company blasts judge’s view that lawsuit is a “waste of time and resources”
General Motors has asked for a new judge to oversee its claims of racketeering by Fiat Chrysler Automobiles.
Last week Detroit federal circuit court Judge Paul Borman described GM’s lawsuit as a “waste of time and resources” and ordered the CEOs of both companies to meet in person—without legal counsel—by July 1 to work out a settlement.
A day later, Borman amended that order to say it would be okay for the two executives to bring along an attorney or two.
Abuse of Judicial Power?
GM decries Borman’s depiction of its lawsuit as an “unprecedented” and “profound” abuse of judicial power that destroys any appearance of impartiality as the case moves forward. GM swiftly petitioned the Sixth U.S. Circuit Court of Appeals in Cincinnati to reject Borman’s order and assign the carmaker’s lawsuit to a new judge.
GM’s complaint results from the federal convictions in 2018 of three FCA executives for bribing United Auto Workers union officials. The group comprises Alfons Iacobelli, former head of labor relations; Michael Brown, former director of employee relations; and Jerome Durden, a former FCA financial analyst.
The trio pleaded guilty to diverting funds intended for a joint FCA-UAW employee training center, mainly to pay for expensive gifts to themselves. GM claims that Sergio Marchionne, FCA’s CEO at the time, personally authorized bribes of UAW officials.
GM asserts that it was directly damaged by several unfair labor agreements its rival won as a result of the conspiracy. FCA retorts that GM’s claim has no merit.
GM counters that it has a “very strong” RICO civil case under the U.S. Racketeer Influenced and Corrupt Organizations Act.
And so the fireworks continue.