Court stays order requiring GM, FCA meet to resolve GM lawsuit

APPEAL

DETROIT court on Monday stayed a lower court’s order requiring officials from General Motors Co and Fiat Chrysler Automobiles to resolve GM’s racketeering lawsuit.

“In order to provide sufficient time to consider the matters raised in GM’s petition, and having considered the relevant factors, we conclude that a temporary stay is appropriate,” the Sixth Circuit Court of Appeals said in a court filing.

GM said in a statement it looked forward to the appeals court’s review and decision.

FCA in a statement reiterated GM’s lawsuit was meritless and in a filing called on the appeals court to deny GM’s request to reassign the case to a new judge.

On Friday, GM asked a U.S. appeals court to allow it to continue pursuing its civil racketeering lawsuit against FCA, rejecting U.S. District Court Judge Paul Borman’s belittling of the complaint. The No. 1 U.S. automaker called Borman’s order “unprecedented” and “a profound abuse” of judicial power.

GM’s appeal came less than a week after Borman called its lawsuit a “waste of time and resources” at a time when both automakers should be focused on surviving the coronavirus pandemic.

Borman ordered GM chief executive Mary Barra and FCA CEO Mike Manley to meet by July 1 to negotiate a resolution, and later amended his order to allow other officials in their place. On Monday, Borman said in an order that the July 1 call would simply entail the executives answering “yes” or “no” on whether the case had been resolved.

Judges routinely call for parties to explore settlements and GM simply wasn’t happy with some of Borman’s questions in the last hearing, FCA said in its Monday filing.

Removing Borman would be “a direct affront to the rule of law” FCA said in the filing. “GM’s ‘bruised feelings’ about facing tough questions cannot be a valid basis for replacing the judge.”

GM sued FCA last year, accusing the Italian-American company’s executives of bribing United Auto Workers union officials to secure labour agreements that put GM at a disadvantage. FCA is under investigation by the U.S. Justice Department as part of a wide-ranging probe of UAW corruption.

GM’s accusations came as FCA and French automaker Peugeot SA were in early stages of preparing a merger. FCA said the suit was aimed at disrupting that deal. GM has said the suit has nothing to do with the merger.