S&C Guides FCA to Litigation Victory Over GM

July 15, 2020

S&C obtained the dismissal of a high-profile RICO lawsuit brought by General Motors against longtime client Fiat Chrysler Automobiles in which GM sought billions of dollars in damages. On July 8, Judge Paul Borman of the U.S. District Court for the Eastern District of Michigan granted FCA's motion to dismiss with prejudice, rejecting GM's claims that it was harmed by alleged improper payments to former officials of the United Auto Workers that were facilitated by certain former FCA employees. The judge found that any injury GM allegedly suffered was too indirect to be cognizable under RICO, which permits only the most directly injured party to seek treble damages.

This ruling followed other favorable decisions in the case for FCA. When GM sought early discovery, FCA convinced the court to stay all discovery pending a decision on FCA's motion to dismiss. When GM filed a petition for a writ of mandamus seeking to have the case taken away from Judge Borman for purportedly undermining the appearance of justice, the Sixth Circuit refused to reassign the case to another judge.

As FCA argued in its court filings, GM's actual motivation for the lawsuit was an attempt to derail FCA's pending $50 billion merger with PSA Groupe, the maker of Citroen and Peugeot vehicles. That deal, in which S&C is advising FCA, will create the world's fourth-largest automaker by volume and third largest by revenue.

The S&C team was led by Steven Holley and Matthew Porpora.