Appeals court suspends meeting between GM and Fiat Chrysler CEOs over RICO lawsuit

General Motors Chairman and CEO Mary Barra addresses the gathering Wednesday, June 3, 2020 during a press conference of corporate leaders speaking out against racism and injustice at City Hall in Detroit, Michigan.

GM

A judge-ordered meeting between General Motors CEO Mary Barra and Fiat Chrysler CEO Mike Manley to resolve a civil racketeering lawsuit has been temporarily suspended by a federal appeals court.



The 6th U.S. Circuit Court of Appeals on Monday said an order by U.S. District Court Judge Paul Borman last week calling for the meeting to occur by July 1 has been “stayed pending further consideration by this court.”

The suspension comes three days after GM filed a petition to remove Borman from the case. He previously called GM’s civil racketeering lawsuit against Fiat Chrysler a “waste of time.” GM also asked for the appeals court to vacate the order mandating the meeting.

Both Fiat Chrysler and Borman have a week from now to comment to the court, according to the filing.

Fiat Chrysler Automobiles (FCA) CEO Mike Manley

Massimo Pinca | Reuters

“We look forward to the Sixth Circuit’s review and decision,” said Jim Cain, a GM spokesman.

Fiat Chrysler reiterated in a statement that the lawsuit was meritless. “FCA will continue to defend itself vigorously and pursue all available remedies in response to this groundless lawsuit,” it said.

GM said last week it rejected “the notion that seeking justice for the direct harm caused to GM is a ‘waste of time,’ a ‘distraction’ or a ‘diversion'” from more pressing and larger issues such as the coronavirus pandemic and racial injustice following the death of George Floyd. All were points used by Borman during a hearing Tuesday where Fiat Chrysler asked the judge to dismiss GM’s lawsuit.

GM filed the racketeering lawsuit in November, alleging the company was harmed as a result of “corrupted” collective bargaining where Fiat Chrysler leaders bribed union officials to give the company cheaper labor costs. Although the United Auto Workers union uses “patterned” bargaining, GM said it did not receive the same benefits as the Italian-American automaker.

Much of the lawsuit centers on the late-Fiat Chrysler CEO Sergio Marchionne, who unexpectedly died in 2018 and has been implicated in a federal probe into bribery and corruption of the union.

The U.S. Department of Justice’s case is ongoing, however federal prosecutors in May said GM was not currently a target of the yearslong investigation.

GM is seeking unspecified damages in the billions that, according to the lawsuit, “will be used for investment in the United States to grow jobs and for the benefit of employees.”

The federal probe has resulted in 14 convictions, including ex-UAW President Gary Jones and 10 other officials affiliated with the union as well as three former executives with Fiat Chrysler.


Originally published on CNBC

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