GM's Bid To Revive Fiat Suit Rejected -- WSJ
August 15 2020 - 3:02AM
Dow Jones News
Judge denies motion to allow complaint alleging Fiat Chrysler
bribed UAW union
By Ben Foldy
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (August 15, 2020).
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 tossing 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.
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."
Judge 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 spokesman for Fiat Chrysler said the ruling confirms the
company's assertion that GM's lawsuit is meritless.
A GM spokesman said the company was disappointed in the decision
and would 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 claimed it incurred an extra $1
billion in labor costs as a result of the alleged scheme, which it
said 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.
Earlier this month, GM attempted to resuscitate the legal
challenge, claiming private investigators have discovered new
evidence that GM says shows Fiat Chrysler allegedly had set up
foreign bank accounts to benefit top UAW officials and the former
head of labor relations for Fiat Chrysler.
The car company also alleges in its amended complaint that one
of those officials, former UAW vice president Joe Ashton, acted as
an informant for Fiat Chrysler while sitting on GM's board of
directors as a representative of a UAW health-care trust.
Additionally, GM claims in its filing that Fiat Chrysler used
bank accounts in Switzerland and Liechtenstein to reward former UAW
President Dennis Williams for allegedly scheming to plant Mr.
Ashton on GM's board to act as a "paid mole."
Attorneys for Messrs. Ashton and Williams didn't immediately
return requests for comment.
The UAW has said it was unaware of the offshore accounts, and
that GM's new allegations haven't surfaced in its discussions with
federal prosecutors.
A lawyer for Al Iacobelli, the former labor-relations head for
Fiat Chrysler and a defendant in the lawsuit, said in a filing that
GM's allegations were "a wild and completely unsupported tale."
Fiat Chrysler has also disputed the claims outlined by GM,
calling them "an unfounded tale of 'corporate espionage' " that
"reads like a script from a third-rate spy movie."
Write to Ben Foldy at Ben.Foldy@wsj.com
(END) Dow Jones Newswires
August 15, 2020 02:47 ET (06:47 GMT)
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