U.S. appeals court stays order requiring GM, FCA meet to resolve GM lawsuit

U.S. appeals court stays order requiring GM, FCA meet to resolve GM lawsuit

Reuters  | Jun 29, 2020 18:06

U.S. appeals court stays order requiring GM, FCA meet to resolve GM lawsuit

By Ben Klayman

DETROIT (Reuters) - A U.S. appeals court on Monday stayed a lower court's order requiring officials from General Motors Co (N:GM) and Fiat Chrysler Automobiles (MI:FCHA) (N:FCAU) 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 that it looked forward to the appeals court's review and decision. Officials with FCA were not immediately available to comment.

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.

GM sued FCA last year, accusing the Italian-American company's executives of bribing United Auto Workers union officials to secure labor 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.

© Reuters. FILE PHOTO: The GM logo is seen at the General Motors plant in Sao Jose dos Campos

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

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