GM asks U.S. appeals court to reinstate racketeering suit against FCA

DETROIT -- General Motors appealed the dismissal of its racketeering lawsuit against Fiat Chrysler Automobiles to the 6th U.S. Circuit Court of Appeals on Tuesday, claiming that a lower court’s decision to dismiss it was “patently wrong” and that its refusal to allow GM to include an amended complaint with additional allegations against FCA was “an abuse of discretion.”

GM requested an oral argument in Tuesday’s filing.

“Both the Supreme Court and this Court have made crystal clear that RICO’s proximate cause standard is readily satisfied when, as alleged here, a defendant uses a third party as a vehicle for intentionally inflicting injury on the plaintiff,” the automaker said in the filing. “And it should go without saying that a court cannot dismiss a complaint that plausibly pleads a viable legal claim simply because it is more inclined to believe the defendant’s story.”

U.S. District Judge Paul Borman denied GM’s motion to revive the case in August, concluding that new evidence GM presented was "too speculative."

In the motion to reconsider the case, GM alleged that FCA and co-conspirators were guilty of "corporate espionage" that directly harmed GM.

FCA and co-conspirators used a network of offshore bank accounts containing millions of dollars to harm GM, the automaker said in the August filing. GM also named former UAW leaders as defendants in the amended complaint: former President Dennis Williams and former Vice President Joe Ashton.

Initially, only FCA and ex-FCA officials -- Alphons Iacobelli, Michael Brown and Jerome Durden -- were defendants.

In the original lawsuit, filed in November, GM said that FCA coordinated a yearslong bribery scheme with UAW officials to gain an unfair labor-cost advantage, ultimately harming GM. The automaker also claimed that FCA CEO Sergio Marchionne, who died in 2018, wanted to hurt GM in an effort to force a merger between the rival automakers.

“We are confident in our case and filed this appeal to continue to seek redress, as permitted under the law, for damages FCA’s systemic corruption caused GM,” the automaker said in a statement Tuesday. “We have a responsibility to our employees and shareholders to hold FCA accountable and seek justice when we are targeted and directly harmed. We look forward to presenting our case to the Sixth Circuit.”

State court case

Last month, GM filed a separate lawsuit accusing FCA of bribery and conspiracy in state court after the dismissal of the federal lawsuit.

As part of the state lawsuit, GM also sued Ashton and Iacobelli. Ashton was a UAW vice president who later became a GM board member, and Iacobelli was an FCA labor affairs executive and worked as an FCA spy after GM hired him, GM claims.

Both Ashton and Iacobelli pleaded guilty to embezzling money as part of a wide-ranging corruption investigation into the UAW, according to separate filings. The case was filed in Wayne County Circuit Court in Michigan.

An FCA spokesman had no immediate comment on the latest appeal. But the company's response has been virtually the same since the litigation first began nearly a year ago. In a past statement, FCA said:

"GM’s lawsuit is meritless and its attempt to submit an amended complaint under the guise of asking the court to change its mind was nothing more than a baseless attempt to smear a competitor that is winning in the marketplace."