By Michael Elkins
The U.S. Supreme Court on Monday declined to take up a dismissed racketeering case General Motors (NYSE:GM) brought against Fiat Chrysler Automobiles, now known as Stellantis (NYSE:STLA). The denial was included in a daily order list from the court on Monday.
The justices turned away an appeal by General Motors of a lower court's dismissal of its lawsuit that accused Fiat Chrysler of bribing employee union officials in a bid to undermine GM and pressure the Detroit-based automaker into a merger with FCA.
Stellantis in a statement praised the court's decision.
"We are pleased that the U.S. Supreme Court has denied GM’s latest attempt to resuscitate the baseless claims that GM has sought to bring in various forms in multiple jurisdictions. Today’s decision upholding the district court’s dismissal of GM’s lawsuit is another reaffirmation that its claims are meritless. We will continue to defend ourselves vigorously against these allegations and we will not be distracted from our focus on competing and winning in the marketplace," according to a statement provided by Stellantis spokeswoman Shawn Morgan.
GM brought a civil lawsuit in 2019 under the Racketeer Influenced and Corrupt Organizations Act, a law designed to target organized crime, claiming FCA bribed United Auto Workers (UAW) union officials over many years to corrupt the bargaining process and gain advantages, costing GM billions of dollars. GM sought an estimated $6 billion in damages.
A federal judge in Michigan dismissed the lawsuit in 2020, saying GM's alleged injuries were not legally caused by FCA's conduct. The Cincinnati-based 6th U.S. Circuit Court of Appeals last August agreed.
"Even accepting GM's theory as true, the chain of causation between FCA's bribes and GM's injury is still too attenuated," the 6th Circuit wrote.
A separate federal corruption investigation led to at least 17 criminal convictions, including former FCA employees and two former UAW presidents, after FCA and UAW officials admitted embezzling funds for their personal benefit. In 2021, FCA US was sentenced to probation after pleading guilty to making more than $3.5 million in illegal payments to UAW officers.
Shares of GM are up 0.80% while STLA is down 1.56% in afternoon trading.