GM's Efforts to Revive Fiat Chrysler Lawsuit Denied--Update

By Ben Foldy 

A federal-court judge has denied a motion filed by General Motors Co. to revive its civil-racketeering lawsuit against Fiat Chrysler Automobiles NV, once again striking down a legal battle between the two Detroit rivals.

GM earlier this month asked the court to reconsider its tossing of a lawsuit filed last fall, alleging Fiat Chrysler bribed officials at the United Auto Workers union to gain an advantage in labor-contract negotiations.

GM at the time argued it had uncovered new evidence to support claims that Fiat Chrysler was trying to weaken its larger competitor through an alleged payoff scheme involving top UAW officials.

Fiat Chrysler has called GM's lawsuit meritless and disputed the allegations.

In a ruling Friday, Judge Paul Borman called GM's motion to amend its earlier complaint "a prohibited attempt to have a second bite at the apple."

Mr. Borman also ruled that the new allegations provided by GM, claiming Fiat Chrysler had enlisted two top UAW officials to aid the scheme and paid them off using offshore banking accounts, were too speculative to warrant revisiting his previous decision to dismiss the case.

A GM spokesman said the company is disappointed in the decision and will appeal.

The ruling marks yet another setback for GM in its unusual legal offensive against a key rival.

Last November, GM filed the racketeering lawsuit, alleging Fiat Chrysler sought to gain a labor-cost advantage over its competitor by paying off UAW officials and corrupting the bargaining process.

The lawsuit was largely based on revelations surfaced in a yearslong federal investigation into corruption at the UAW. The investigation has so far resulted in 14 convictions, including of top officials at the union and a former labor-relations executive at Fiat Chrysler.

In the original complaint, GM claims it incurred an extra $1 billion in labor costs as a result of the alleged scheme, which it says was orchestrated by Fiat Chrysler then-Chief Executive Sergio Marchionne. Mr. Marchionne died in 2018.

Judge Borman in July dismissed the case, ruling GM failed to show it was a primary victim of the alleged misconduct.

Write to Ben Foldy at [e-mail]

(END) Dow Jones Newswires

August 14, 2020 11:25 ET (15:25 GMT)

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