GM General Counsel, Kirkland Attorneys Leveraged US Corruption Probe to Sue Fiat Chrysler
On Wednesday the GM lawyers filed a federal racketeering lawsuit against Fiat Chrysler, accusing Fiat of "a systemic and near decade-long conspiracy to bribe senior union officials to corrupt the collective bargaining process and labor relations" to GM's detriment.
November 21, 2019 at 06:01 PM
4 minute read
The original version of this story was published on Corporate Counsel
Carefully tracking a yearslong U.S. attorney's probe into corruption at the United Auto Workers, General Motors Co. general counsel Craig Glidden and his outside counsel at Kirkland & Ellis began to see a pattern emerging.
On Wednesday the GM lawyers revealed what they saw in a federal racketeering lawsuit filed against Fiat Chrysler Automobiles NV. The suit accuses Fiat Chrysler of "a systemic and near decade-long conspiracy to bribe senior union officials to corrupt the collective bargaining process and labor relations," to GM's detriment.
In short, the suit alleges Fiat Chrysler paid bribes to corrupt the union bargaining process to win concessions and other favorable treatment not granted to GM, using the union to try and financially force GM into a merger.
The suit paints Fiat Chrysler's late CEO, Sergio Marchionne, as the mastermind behind the alleged conspiracy. For several years Marchionne had sought a merger with GM, but the company always rebuffed him.
Fiat Chrysler released a statement in response to the GM suit, saying, "We are astonished by this filing, both its content and its timing. We can only assume this was intended to disrupt our proposed merger with [French carmaker PSA Peugeot] as well as our ongoing negotiations with the UAW."
The statement added, "We intend to vigorously defend against this meritless lawsuit and pursue all legal remedies in response to it."
The company did not immediately respond to messages, but on Thursday Fiat Chrysler chairman John Elkann told reporters in Turin, Italy, that the Peugeot merger will move forward and that "we are not worried" by the lawsuit, according to the Associated Press.
At Detroit-based GM, Glidden was unavailable for comment. But in a statement after filing the suit, he said, "We have alleged in the complaint that Mr. Marchionne is responsible for conceiving, executing and sponsoring the alleged wrongdoing. We have no present intent to pursue the UAW. Our focus is on FCA. We believe the responsibility firmly rests on the orchestrater of the wrongdoing … and we plan to hold FCA responsible."
Glidden added, "This lawsuit is intended to hold FCA accountable for the harm its actions have caused our company and to ensure a level playing field going forward." The harm included unfair labor costs and other operational advantages, according to the suit.
The suit was filed in U.S. District Court in the Eastern District of Michigan, where the U.S. Attorney's Office has been conducting a multiyear investigation into union corruption. So far the investigation has led to convictions of seven union personnel and three Fiat Chrysler executives.
It was filed by Hariklia Karis, a litigation partner in Kirkland's Chicago office, and other Kirkland attorneys, along with the Detroit law firm Honigman. Karis did not immediately return messages Thursday.
The defendants are FCA US LLC, based in Auburn Hills, Michigan, and its parent company, Fiat Chrysler. GM also named the three convicted Fiat Chrysler executives—Alphons Iacobelli, Jerome Durden and Michael Brown—as co-defendants in the suit.
Hours after the suit was filed, UAW president Gary Jones resigned, though he is not mentioned in the complaint.
Earlier this month, federal prosecutors charged retired UAW vice president and former GM board member Joseph Ashton with fraud and money laundering as part of the investigation. He also is not mentioned in the GM complaint.
GM did not ask for a specific dollar amount, but the suit seeks damages, "including but not limited to the billions of dollars in damages GM suffered as a result of defendants' bribery scheme, pattern of racketeering, and other unlawful acts" plus punitive damages, restitution, costs and other fees.
In addition, the U.S. statute covering racketeering allows a court to treble the damage award against a losing defendant, raising a potential for tens of billions of dollars in damages.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllFederal Judge Rejects Teams' Challenge to NASCAR's 'Anticompetitive Terms' in Agreement
Film Company Alleges Elon Musk, Tesla Used AI to Mimic 'Blade Runner' Scene
6 minute readTrending Stories
- 1Gibson Dunn Sued By Crypto Client After Lateral Hire Causes Conflict of Interest
- 2Trump's Solicitor General Expected to 'Flip' Prelogar's Positions at Supreme Court
- 3Pharmacy Lawyers See Promise in NY Regulator's Curbs on PBM Industry
- 4Outgoing USPTO Director Kathi Vidal: ‘We All Want the Country to Be in a Better Place’
- 5Supreme Court Will Review Constitutionality Of FCC's Universal Service Fund
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250