State court dismisses GM's 'enthralling' lawsuit against FCA

Breana Noble
The Detroit News

A Wayne County circuit judge has dismissed what he called General Motors Co.'s "wholly riveting" lawsuit against Fiat Chrysler Automobiles NV on the grounds that the Detroit automaker failed to show it was harmed from its crosstown rival bribing United Auto Workers officials.

The decision from Judge David Allen of the Wayne County Circuit Court is the second time a court has dismissed GM's civil suit claims alleging "billions" of dollars in damages after FCA executives bribed UAW officials in efforts to corrupt three rounds of bargaining to harm and take over GM. A federal lawsuit remains pending on the matter. FCA, now known as Stellantis NV, has called the claims "meritless."

The late Fiat Chrysler CEO Sergio Marchionne, left, and UAW President Dennis Williams embraced at the start of contract talks in 2015. GM charged that Marchionne orchestrated a bribery conspiracy to corrupt three rounds of bargaining with the UAW in an effort to harm and take over Detroit's biggest automaker.

"GM relies primarily on an agreement tentatively reached, though not actually made, to rather crudely assert that it incurred 'billions of dollars in labor costs' it otherwise would not have in a counterfactual world where the FCA-UAW bribery scheme did not take place," Allen wrote. "However, this is, at best, a hypothetical harm."

Other factors, including the UAW's continued support of the 2015 deal with GM, would play into that, he said. The judge added that GM's average hourly wage cost decreased by about $1 per hour between 2011 and 2015.

"Given that inflation between 2011 and 2015 was five percent, this Court fails to see how a decrease in average wage structure over that same period makes GM anything but better off than it was previously," Allen said. "It hypothetically may not be as well off as it had hoped or planned to be, but that is not a legally cognizable damage."

And even if GM did have harm done to it, the immediate cause of the concessions would be "the economic force of pattern bargaining and threat of strike," not FCA, Allen added: "Whatever FCA's material misrepresentations about the 2015 CBA negotiations may have been, the force of pattern bargaining would have guided GM's hand regardless."

GM's claims stem from a years-long federal investigation into UAW corruption, which has resulted in the convictions of 15 people, including three former FCA executives. The automaker earlier this year following its merger with French rival Groupe PSA pleaded guilty to one count of conspiracy to violate the Labor Management Relations Act. It agreed to pay $30 million to settle the charges and is submitting to three years under an independent monitor to oversee the dissolution of a joint training center FCA operated with the UAW.

"As we have said from the date the original lawsuit was filed, it is meritless," Stellantis said in a statement of GM's suit. "The courts once again agreed and dismissed GM’s complaint. We will continue to defend ourselves vigorously and pursue all available remedies in response to this groundless lawsuit."

In a statement, GM said: "We respectfully disagree with the ruling and are considering our legal options.”

A federal district court judge dismissed GM's original racketeering lawsuit against FCA, because the Detroit automaker was not the direct victim of the scheme. GM appealed that decision.

"Even the most enthralling drama must eventually reach a conclusion," Allen concluded. "This one is no exception."

Twitter: @BreanaCNoble