Minority council countersues Piston Group in ongoing legal battle

The Michigan Minority Supplier Development Council has filed a countersuit against Piston Group, alleging breach of contract and defamation in an ongoing legal dispute over the minority leadership of the auto supplier.

The two organizations have been sparring since last year over Piston Group's minority-enterprise business status — a valuable certification doled out and rescinded by the MMSDC.

The MMSDC pulled Piston Group's certification in February after it determined its CEO, former Detroit Piston Vinnie Johnson, did not run the day-to-day operations of his large supplier, which operates four subsidiaries — Piston Automotive, Irvin Automotive, the Detroit Thermal Systems joint venture with Valeo, and office furniture unit Airea.

To be certified, a company must be 51 percent majority-owned by a person of color, actively managed in day-to-day operations by a person of color and operate independently, according to the organization.

The heads of Piston Group's four divisions are white, which the MMSDC says violates its rules.

Piston Group, owned by former the Detroit Pistons star, sued the council in May to restore the certification. In June, the District Court judge filed a temporary restraining order that reinstated the certification while the court case proceeded.

That case is set for a jury trial later this year.

In its countersuit, filed in Wayne County Circuit Court this month, MMSDC alleges Piston Group breached its contract with the organization by filing the original lawsuit.

The Piston Group and the MMSDC declined to comment on the countersuit.

By participating in the certification process, the organization agreed "to hold MMSDC free and harmless from any and all claims, demands, and damages whatsoever arising out of the presentation of this application and agrees to indemnify and hold MMSDC harmless for any and all liability in connection with the certification of the information contained in this application," the lawsuit states.

Ax to grind?

The MMSDC also alleges Piston Group defamed the organization and its CEO Marie Sourie-Robinson in its lawsuit and in the press and that has caused financial and reputation harm.

In its original lawsuit, Piston Group alleges Robinson has an ax to grind with Piston Group, most notably being upset the company hired away then-council executive Frank Ervin in 2018, who now serves as group vice president for government affairs for the supplier. The lawsuit also alleges that Robinson threatened to decertify Piston on several occasions after Johnson declined to donate $300,000 to an MMSDC initiative and failed to participate as a sponsor in the organization's golf outing fundraiser in 2019.

Piston Group, the largest Black-owned auto supplier in the U.S., alleged that Robinson and the MMSDC were "vindictive, willful, wanton or malicious" in their actions.

The MMSDC has denied the allegations.

The Piston Group and Johnson "made these false and defamatory statements in an attempt to bully the MMSDC into deeming them certified MBEs despite the fact that neither Vincent Johnson nor any other minority member is responsible for the day-to-day management of any of the Piston companies," the lawsuit said. "As a direct and proximate result of (the defendants) wrongful conduct, MMSDC has suffered substantial economic injury, loss of good will, loss of business opportunities, reputational harm and standing in the community."

Piston Group has not yet responded to the counterclaim in court.

The company ranks No. 64 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $2.8 billion in 2020.