FCA Court Documents

Case 2:19-cv-13429-PDB-DRG ECF No. 90 filed 08/10/20 PageID.
3232 Page 1 of 29
IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
x
GENERAL MOTORS LLC; GENERAL :
MOTORS CO., :
:
Plaintiffs, : No. 2:19-cv-13429
:
Honorable Paul D. Borman
v. :
: District Court Judge
FCA US LLC; FIAT CHRYSLER :
Honorable David R. Grand
AUTOMOBILES N.V.; ALPHONS :
Magistrate Judge
IACOBELLI; JEROME DURDEN; MICHAEL :
BROWN, :
:
Defendants. :
x
FCA DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO

ALTER OR AMEND JUDGMENT
Thomas W. Cranmer (P25252) Steven L. Holley (N.Y. 1917830)

Matthew P. Allen (P57914) Matthew J. Porpora (N.Y. 4402798)
MILLER, CANFIELD, PADDOCK Jacob E. Cohen (N.Y. 4787271)
& STONE, PLC SULLIVAN & CROMWELL LLP
840 West Long Lake Road 125 Broad Street
Suite 150 New York, New York 10004-2498
Troy, Michigan 48098-6358 Tel: (212) 558-4000
Tel: (248) 879-2000 [email protected]
[email protected] [email protected]
[email protected] [email protected]
Counsel for FCA US LLC and Fiat Chrysler Automobiles N.V.
August 10, 2020

Case 2:19-cv-13429-PDB-DRG ECF No. 90 filed 08/10/20 PageID.3233 Page 2 of 29
TABLE OF CONTENTS
Page
Preliminary Statement ........................................................................................... 1
Argument ................................................................................................................ 6
I. The Court should deny GM’s request for reconsideration of this

Court’s correct application of RICO’s direct causation standard ......... 7
A. Rehashing previously rejected arguments is not grounds for

altering or amending a judgment ......................................................... 8
B. This Court correctly applied the standard for pleading causation

under RICO ......................................................................................... 9
II. GM was not entitled to an advisory opinion from this Court as to

how to overcome the numerous deficiencies in its Complaint .............. 12
III. GM’s alleged “new evidence” is wild conjecture and does nothing
to cure the deficiencies the Court identified in dismissing the
Complaint ................................................................................................... 14
A. GM’s “new evidence” is nothing but conclusory speculation .......... 14
B. GM’s “new evidence,” even if considered, would not “clearly”

lead to a “different result” ................................................................. 18
Conclusion ............................................................................................................. 21
TABLE OF AUTHORITIES
Page(s)
Cases
16630 Southfield Ltd. P’ship v. Flagstar Bank, F.S.B.,
727 F.3d 502 (6th Cir. 2013) .................................................................. 6, 16, 17
Anza v. Ideal Steel Supply Corp.,

547 U.S. 451 (2006) .................................................................................. passim
Arnold v. Alphatec Spine, Inc.,

2014 WL 2896838 (S.D. Ohio June 26, 2014) ........................................... 14, 15
Bachi-Reffitt v. Reffitt,
802 F. App’x 913 (6th Cir. 2020) ........................................................... 6, 19, 20
Bledsoe v. Comm. Health Sys., Inc.,

342 F.3d 634 (6th Cir. 2003) ...................................................................... 13, 14
Bridge v. Phoenix Bond & Indem. Co.,

553 U.S. 639 (2008) ............................................................................................ 8
Bunn v. Navistar, Inc.,

797 F. App’x 247 (6th Cir. 2020) ..................................................................... 13
Carriuolo v. Gen. Motors Co.,

823 F.3d 977 (11th Cir. 2016) ............................................................................ 3
City of Cleveland v. Ameriquest Mortg. Sec., Inc.,

615 F.3d 496 (6th Cir. 2010) ............................................................................ 11
Clark v. United States,

764 F.3d 653 (6th Cir. 2014) .............................................................................. 7
Davis v. Prof’l Reps. Org.,

666 F. App’x 433 (6th Cir. 2016) ........................................................... 5, 14, 18
Empire Merchs., LLC v. Reliable Churchill LLLP,

902 F.3d 132 (2d Cir. 2018) ......................................................................... 9, 18
Empress Casino Joliet Corp. v. Johnston,

763 F.3d. 723 (7th Cir. 2014) ............................................................................. 8
-ii-
Energy Conversion Devices Liquidation Tr. v. Trina Solar Ltd.,

833 F.3d 680 (6th Cir. 2016) ...................................................................... 13, 14
Gen. Motors LLC v. FCA US LLC,

2020 WL 3833058 (E.D. Mich. July 8, 2020) ............................................ 10, 19
Graham v. Fearon,
721 F. App’x 429 (6th Cir. 2018) ..................................................................... 12
Hemi Grp., LLC v. City of N.Y.,

559 U.S. 1 (2010) ...................................................................................... passim
Hernandez v. City of Saginaw,

2013 WL 4052632 (E.D. Mich. Aug. 12, 2013) ................................................. 7
Higginbotham v. Baxter Int’l, Inc.,

495 F.3d 753 (7th Cir. 2007) ............................................................................ 15
Holmes v. Sec. Inv’r Prot. Corp.,

503 U.S. 258 (1992) .......................................................................................... 19
Jones v. Nat. Essentials, Inc.,

740 F. App’x 489 (6th Cir. 2018) ....................................................................... 8
Leisure Caviar, LLC v. U.S. Fish & Wildlife Serv.,

616 F.3d 612 (6th Cir. 2010) ...................................................................... 4, 6, 7
Letvin v. Lew,
2014 WL 3865007 (E.D. Mich. Aug. 6, 2014) ............................................... 4, 8
Mich. Flyer LLC v. Wayne Cty. Airport Auth.,

860 F.3d 425 (6th Cir. 2017) ........................................................................ 4, 13
Perry v. Am. Tobacco Co.,

324 F.3d 845 (6th Cir. 2003) ...................................................................... 11, 18
Raub v. Moon Lake Prop. Owners’ Ass’n,

2018 WL 10127704 (E.D. Mich. Jan. 3, 2018) .............................................. 8, 9
Stuart v. Lowe’s Home Centers, LLC,

737 F. App’x 278 (6th Cir. 2018) ............................................................... 17, 18
-iii-
Total Benefits Planning Agency, Inc. v. Anthem Blue

Cross & Blue Shield,
552 F.3d 430 (6th Cir. 2008) ............................................................................ 13
United States v. Burris,

912 F.3d 386 (6th Cir. 2019) (en banc) ............................................................ 11
Vemco, Inc. v. Camardella,

23 F.3d 129 (6th Cir. 1994) .............................................................................. 20
Wallace v. Midwest Fin. & Mortg. Servs., Inc.,

714 F.3d 414 (6th Cir. 2013) .................................................................... passim
Winget v. JP Morgan Chase Bank, N.A.,

537 F.3d 565 (6th Cir. 2008) .............................................................................. 5
Wood v. Gen. Motors Corp.,

2015 WL 1396437 (E.D.N.Y. Mar. 25, 2015) .................................................. 20
Rules
Fed. R. Civ. P. 11 ................................................................................................... 20
Fed. R. Civ. P. 12(b)(6) .................................................................................... 14, 17
Fed. R. Civ. P. 15 ............................................................................................... 4, 12
Fed. R. Civ. P. 59 ........................................................................................... passim
-iv-
STATEMENT OF ISSUE PRESENTED
Should this Court alter or amend the judgment dismissing GM’s Complaint
with prejudice to permit GM to file its proposed Amended Complaint, where GM
merely (i) repeats the already rejected argument that the Court applied an unduly
“strict” standard for pleading causation under the Racketeer Influenced and Corrupt
Organizations Act (“RICO”), (ii) misrepresents the standard for leave to amend, and
(iii) casts baseless aspersions on FCA that (a) are completely unsupported by any
well-pled factual allegations, and (b) do not change the fact that GM’s causation
theory remains too indirect and contingent upon harm allegedly incurred by others?1
1
Plaintiffs General Motors LLC and General Motors Co. are referred to
collectively as “GM”; Defendants FCA US LLC and Fiat Chrysler Automobiles
N.V. are referred to collectively as “FCA.”
-v-
STATEMENT OF CONTROLLING
OR MOST APPROPRIATE AUTHORITIES
The controlling or most appropriate authorities for the relief that FCA seeks
include:
1. Fed. R. Civ. P. 59.
2. Energy Conversion Devices Liquidation Tr. v. Trina Solar Ltd., 833 F.3d 680
(6th Cir. 2016).
3. Leisure Caviar, LLC v. U.S. Fish & Wildlife Serv., 616 F.3d 612 (6th Cir.
2010).
4. Letvin v. Lew, 2014 WL 3865007 (E.D. Mich. Aug. 6, 2014) (Borman, J.).
5. Mich. Flyer LLC v. Wayne Cty. Airport Auth., 860 F.3d 425 (6th Cir. 2017).
-vi-
PRELIMINARY STATEMENT
GM’s motion to set aside and vacate the Court’s judgment dismissing GM’s
claims, or to amend that judgment to convert the dismissal of GM’s Complaint to be
“without prejudice,” and thereby permit GM to file its proposed Amended
Complaint, is meritless and should be denied. GM must know that the prospect of
the Court changing its mind on the crucial issue of RICO causation is slim to none,
so this motion is apparently a vehicle for GM to make more defamatory and baseless
accusations about a competitor that is winning in the marketplace.
GM’s proposed Amended Complaint reads like a script from a third-rate spy
movie, full of preposterous allegations that FCA paid not one, but two, “mole[s]” to
“infiltrate[] GM” and “funnel[] inside information to [FCA]” using money “stashed”
in a “broad network” of “secret overseas [bank] accounts.” (Motion 2, 5, 7-8, 20-
21.) None of that is true. That GM has extended its attacks to individual FCA
officers and employees, making wild allegations against them without a shred of
factual support, is despicable. (E.g., proposed Amended Complaint (“AC”)
¶¶ 101(c), 101(d), 101(e).)
In addition to concocting an unfounded tale of “corporate espionage” that
would make John Le Carré cringe (Motion 21), GM (i) improperly seeks to reargue
the standard for “direct causation” under RICO, (ii) misrepresents the legal standard
governing leave to amend after judgment has been entered, and (iii) accuses the
Court of committing “manifest error” by dismissing the Complaint without granting
GM leave to amend, even though GM spent two years drafting its original complaint
and did not previously request leave to amend. GM is wrong in every respect.
This motion is the latest example of the lengths to which GM is prepared to
go in attacking FCA, accusing the Court of misconduct along the way. GM’s
fictional account of “corporate espionage” is based entirely on two unremarkable
allegations:
1. FCA—a Dutch corporation headquartered in the United Kingdom, with

subsidiaries that operate facilities in Italy and more than 40 other countries,
and sales to customers in more than 130 countries—maintains “foreign bank
accounts” in “countries such as Switzerland, Luxembourg, Liechtenstein,
Italy, Singapore, the Cayman Islands, and others.” (Motion 5.) That is
unremarkable, and certainly not illegal.
2. Certain individuals—such as Alphons Iacobelli (who GM hired without

asking FCA for a reference after his employment was summarily terminated
by FCA) and Joseph Ashton (a former UAW official who served on GM’s
Board of Directors and has no connection to FCA)—also held or controlled
bank accounts in some of those same countries. (AC ¶¶ 35, 43.) Even if true,
there is nothing illegal about that either.
Based solely on the “existence of [these] foreign bank accounts” (Karis Decl.
¶ 10), GM leaps to the bold conclusion, which it pleads solely on “information and
belief,” that Iacobelli and Ashton were “mole[s]” paid by FCA through “secret
overseas [bank] accounts” to “infiltrate[] GM,” “funnel[] inside information to
[FCA],” and ensure that benefits and concessions provided to FCA by the UAW
were not also provided to GM. (Motion 2, 5, 7-8, 20-21.) No facts alleged in the
-2-
proposed Amended Complaint—not a single one—support this outrageously
speculative accusation.
Confirming that GM is engaged in a smear campaign, and that its principal
goal is to sully the reputations of FCA and the individual FCA officers and
employees it has chosen to attack, GM includes in its proposed Amended Complaint
allegations concerning “a variety” of other supposed “scandals in organizations
controlled or connected to FCA NV.” (AC ¶¶ 185-94.) These allegations have
nothing whatsoever to do with the FCA officers and employees whose reputations
GM has wrongly impugned. Moreover, the allegations have no connection to GM’s
claims in this case, and thus they can do nothing to correct GM’s failure to meet the
proximate cause requirement of RICO.2
GM’s motion to alter or amend the judgment should be denied for the
following reasons:
First, the Court should deny GM’s motion to alter or amend the judgment
because there is no reason for the Court to reconsider its decision that RICO
2
GM insinuates that, because FCA has been accused of engaging in certain
misconduct in the past, the Court should embrace GM’s speculative “corporate
espionage” theory. But on that “logic,” the fact that GM frequently has been accused
of making misrepresentations to consumers, e.g., Carriuolo v. Gen. Motors Co., 823
F.3d 977, 981 (11th Cir. 2016), including concealing an ignition switch defect linked
to more than 120 fatalities (see CNN, Death toll for GM ignition switch: 124 (Dec.
10, 2015), https://tinyurl.com/yxcnyx75), is reason to conclude that GM’s proposed
Amended Complaint is replete with such misrepresentations.
-3-
plaintiffs—especially economic competitors—must satisfy a strict proximate cause
requirement. GM merely “regurgitate[s] the same arguments and case law set forth
in [its] previous response to [FCA’s] motions to dismiss.” Letvin v. Lew, 2014 WL
3865007, at *1 (E.D. Mich. Aug. 6, 2014) (Borman, J.). As GM and its experienced
counsel must know, “[a] motion under Rule 59(e) is not an opportunity to re-argue
a case.” Mich. Flyer LLC v. Wayne Cty. Airport Auth., 860 F.3d 425, 431 (6th
Cir. 2017).
Second, GM misrepresents the standard for leave to amend, contending that
“leave to amend should have been freely granted” under the “liberal amendment
policy” of Federal Rule of Civil Procedure 15. (Motion v (“Statement of Issues”),
13.) But the Sixth Circuit has squarely held that Rule 15 and its liberal amendment
policy do not apply when a plaintiff seeks leave to amend after a judgment has been
entered against it, which is what is happening here. “A party seeking leave to amend
after an adverse judgment faces a heavier burden than for a Rule 15 leave to amend
motion prior to a final ruling.” Mich. Flyer, 860 F.3d at 431. This makes eminent
sense: “If a permissive amendment policy applied after adverse judgments, plaintiffs
could use the court as a sounding board to discover holes in their arguments, then
‘reopen the case by amending their complaint to take account of the court’s
decision.’” Leisure Caviar, LLC v. U.S. Fish & Wildlife Serv., 616 F.3d 612, 616
(6th Cir. 2010). Thus, while GM wrongly boasts that its proposed Amended
-4-
Complaint “addresses every concern the Court raised in its Order granting
Defendants’ motions to dismiss” (Motion 16), GM was “not entitled to an advisory
opinion from the Court informing [it] of the deficiencies of the complaint and then
an opportunity to cure those deficiencies.” Winget v. JP Morgan Chase Bank, N.A.,
537 F.3d 565, 573 (6th Cir. 2008).
Third, GM fails to meet its burden of showing that its so-called “newly
discovered evidence” “clearly would have produced a different result if presented
before the original judgment.” Davis v. Prof’l Reps. Org., 666 F. App’x 433, 440
(6th Cir. 2016). The only new purported “facts” that GM alleges are the “existence
of foreign bank accounts by various individuals previously and currently employed
by FCA and former UAW Presidents.” (Karis Decl. ¶ 10.) There is not one well-
pled allegation in the proposed Amended Complaint that these foreign bank accounts
were used to pay bribes or facilitate any other illegal conduct. Instead, GM merely
asserts, on “information and belief,” that the existence of foreign accounts must
mean that Iacobelli and Ashton were “moles” who infiltrated GM, passed
unspecified inside information about GM to FCA, and ensured that the alleged
concessions provided to FCA by the UAW were not also provided to GM.
(Motion 2, 5, 7-8, 20-21.)
Such baseless speculation—plainly the product of a fevered imagination—is
insufficient to state a claim. For one, GM’s unsupported allegations pled “upon
-5-
information and belief” “are precisely the kinds of conclusory allegations that Iqbal
and Twombly condemned and thus told [courts] to ignore when evaluating a
complaint’s sufficiency.” 16630 Southfield Ltd. P’ship v. Flagstar Bank, F.S.B.,
727 F.3d 502, 506 (6th Cir. 2013). For another, even if these new allegations were
accepted as true, GM’s causation theory continues to be too indirect. (See infra 18-
19.) And lastly, even if it were possible to conclude that the purpose of the alleged
RICO scheme was to injure GM and no one else by imposing higher labor costs on
GM (Motion 21), then the proposed Amended Complaint would fail to state a claim
because “a single scheme targeting a single victim” does not plead “an actionable
‘pattern of racketeering activity.’” Bachi-Reffitt v. Reffitt, 802 F. App’x 913, 918
(6th Cir. 2020).
ARGUMENT
A plaintiff “who seeks to amend a complaint after losing the case must provide
a compelling explanation to the district court for granting the motion,” based on
“(1) a clear error of law; (2) newly discovered evidence; (3) an intervening change
in controlling law; or (4) a need to prevent manifest injustice.” Leisure Caviar, 616
F.3d at 615, 617. In deciding whether to grant such a motion, a court must also
“consider[] the competing interest of protecting the finality of judgments and the
expeditious termination of litigation,” and “ought to pay particular attention to the
-6-
movant’s explanation for failing to seek leave to amend prior to the entry of
judgment.” Id. at 615-16 (internal quotation omitted).
While GM seeks to convey the impression that it has a clear right to the relief
requested in its motion, nothing could be further from the truth. This Court has
“considerable discretion in deciding whether to grant Rule 59 motions,” Clark v.
United States, 764 F.3d 653, 661 (6th Cir. 2014), and in exercising that discretion
must “remain conscious that relief under Rule 59(e) is an ‘extraordinary remedy to
be employed sparingly in the interests of finality and conservation of scarce judicial
resources.’” Hernandez v. City of Saginaw, 2013 WL 4052632, at *2 (E.D. Mich.
Aug. 12, 2013). GM utterly fails to show that it is entitled to such an “extraordinary
remedy” here.
I. The Court should deny GM’s request for reconsideration of this Court’s
correct application of RICO’s direct causation standard.
GM is upset that this Court faithfully applied the strict standard for pleading
“direct causation” under RICO, but that certainly is not a valid basis for altering or
amending the judgment. GM’s request that the Court reconsider its legal holding,
based on the very same arguments that GM made in its failed opposition to FCA’s
motions to dismiss, should be denied for two independent reasons.
-7-
A. Rehashing previously rejected arguments is not grounds for

altering or amending a judgment.
GM merely “rehash[es] the same arguments this Court already rejected,”
which is not grounds for altering or amending the judgment. Letvin, 2014 WL
3865007, at *2. Indeed, GM’s entire argument is copied almost verbatim from its
Opposition to FCA’s motions to dismiss, including:
 The Sixth Circuit in Wallace v. Midwest Financial & Mortgage Services, Inc.,
714 F.3d 414 (6th Cir. 2013) held that “foreseeability” and “intentional[]”
conduct are the only requirements for causation under RICO. (Compare
Motion 4, 10-11 with Opp. 11-12, 16.)
 “[N]either Hemi nor Anza,” require a plaintiff to satisfy a “strict” direct

causation requirement. (Compare Motion 4, 10-11 with Opp. 9, 11.)
 The Supreme Court held in Bridge v. Phoenix Bond & Indem. Co., 553 U.S.
639 (2008) that “[p]roximate cause” under RICO “is a flexible concept.”
(Compare Motion 10 with Opp. 8.)
 GM’s alleged injuries are “distinct” from those of other more directly injured
parties. (Compare Motion 12 with Opp. 13, 18, 20.)
 GM’s causation theory is “[u]nlike” the one rejected in Anza v. Ideal Steel
Supply Corp., 547 U.S. 451 (2006), and more akin to the one in Empress
Casino Joliet Corp. v. Johnston, 763 F.3d. 723, 733 (7th Cir. 2014).
(Compare Motion 4, 12 with Opp. 13, 17-18.)
This effort by GM to get another bite at the apple is plainly improper.
“Rule 59(e) does not exist to provide an unhappy litigant an opportunity to relitigate
issues the court has already considered and rejected.” Jones v. Nat. Essentials, Inc.,
740 F. App’x 489, 495 (6th Cir. 2018); see Raub v. Moon Lake Prop. Owners’ Ass’n,
-8-
2018 WL 10127704, at *1 (E.D. Mich. Jan. 3, 2018) (“Plaintiffs may not use rule
59(e) to re-assert arguments previously rejected by the Court.”).
B. This Court correctly applied the standard for pleading causation

under RICO.
GM’s motion for reconsideration should be denied because there is no mistake
to be remedied: in dismissing GM’s Complaint, the Court correctly applied the
standard for pleading causation under RICO.
GM first faults the Court for describing proximate cause under RICO as a
“strict standard.” (Motion 2, 4.) But that statement is unquestionably correct. “The
requirements of RICO causation are stricter than those for common-law torts.”
Empire Merchs., LLC v. Reliable Churchill LLLP, 902 F.3d 132, 145 (2d Cir. 2018)
(emphasis added; quotation omitted). Moreover, the Supreme Court has directed
district courts to be skeptical of RICO “claims brought by economic competitors,
which, if left unchecked, could blur the line between RICO and the antitrust laws.”
Anza, 547 U.S. at 460; see Empire Merchs., 902 F.3d at 144 (same). Such skepticism
demands strict enforcement of the requirements of RICO, including proximate
cause.
Next, and in a similar vein, GM accuses the Court of inventing an “unduly
strict proximate cause standard that is inconsistent with governing Supreme Court
and Sixth Circuit precedent.” (Motion 4, 10.) In particular, GM argues that the Sixth
Circuit in Wallace “rejected the notion” of a “directness” requirement (Motion 10),
-9-
and held instead that “a scheme that intentionally and purposefully targets another
for harm causes injury that is both foreseeable and sufficient to show proximate
cause.” (Motion 10-11.) These arguments are nothing new, and GM is wrong on
both scores, as this Court already has found. See Gen. Motors LLC v. FCA US LLC,
2020 WL 3833058, at *8 (E.D. Mich. July 8, 2020).
First, the Sixth Circuit in Wallace did not “reject[]” the Supreme Court’s
“directness” requirement, nor could it do so. (Motion 10.) As an initial matter,
Wallace did not address the precise causation issue here, which was also the focus
in Hemi Grp., LLC v. City of N.Y., 559 U.S. 1 (2010), and Anza—namely, whether
someone other than the RICO plaintiff was more directly injured by the defendant’s
alleged conduct. Instead, the question in Wallace was whether a fraudulently
“inflated appraisal” of plaintiff’s home procured by defendants “‘led directly’ to
[plaintiff’s] decision” to enter into a “high-cost, adjustable-rate mortgage,” which
was the cause of plaintiff’s financial ruin and bankruptcy. 714 F.3d at 416, 420. For
this reason, the Wallace panel had no need to engage with the Supreme Court’s
precedents relating to plaintiffs that suffered only indirect injury. In any event, the
Supreme Court could not have been clearer in Hemi that, “in the RICO context, the
focus is on the directness of the relationship between the conduct and the harm,” and
that persons who claim to have incurred harm “beyond the first step” in the causal
chain cannot assert a RICO claim. Hemi, 559 U.S. at 10, 12. Even though Wallace
-10-
“post-date[s]” Hemi (Motion 4), the Sixth Circuit does not have the power to
overrule the Supreme Court.
Second, and for similar reasons, Wallace did not hold that “a scheme that
intentionally and purposefully targets another for harm causes injury that is both
foreseeable and sufficient to show proximate cause.” (Motion 10-11.) The Supreme
Court expressly rejected the argument that “RICO’s proximate cause requirement
turn[s] on foreseeability,” as argued by the Hemi dissenters. Hemi, 559 U.S. at 12.
Likewise, long before Wallace, the Sixth Circuit “rejected the argument that
the intentional nature of plaintiffs’ claims alters the remoteness inquiry,” holding
that “specific intent to harm does not magically create standing or cause . . . injuries
to be direct.” Perry v. Am. Tobacco Co., 324 F.3d 845, 850 (6th Cir. 2003). The
Sixth Circuit held again seven years later that an allegation that “Defendants
intentionally caused the alleged course of events . . . is not relevant to our directness
requirement analysis” under RICO. City of Cleveland v. Ameriquest Mortg. Sec.,
Inc., 615 F.3d 496, 502-03 (6th Cir. 2010). Thus, even if Wallace purported to alter
the Sixth Circuit’s standard for pleading direct causation under RICO sub silentio (it
did not), the Wallace panel had no power to do so, because “[a] panel of [the Sixth
Circuit] cannot overrule the decision of another panel.” United States v. Burris, 912
F.3d 386, 406 (6th Cir. 2019) (en banc).
-11-
In sum, there is no merit to GM’s claim that it has met RICO’s proximate
cause requirement by alleging that FCA intended to cause indirect harm to GM. As
explained further below in Section III, because GM’s supposedly “new” evidence
purports to show only that FCA’s conduct was “intentionally designed to . . . harm
GM,” that evidence is irrelevant to the proximate cause analysis and does not make
GM’s alleged injury any less indirect. (Motion 5.)
II. GM was not entitled to an advisory opinion from this Court as to how to
overcome the numerous deficiencies in its Complaint.
GM asserts that this Court committed “manifest error” by failing to anticipate
that GM might want “an opportunity to rectify the[] perceived deficiency in its
pleadings,” and that the Court should now grant GM leave to amend pursuant to
“Rule 15(a)’s liberal [amendment] policy.” (Opp. 2, 4-5, 15.) Both assertions are
wrong. GM—which is not some pro se litigant, but a major corporation represented
by experienced counsel—was “not entitled to a directive from the district court
‘informing [it] of the deficiencies of the complaint and then an opportunity to cure
those deficiencies.’” Graham v. Fearon, 721 F. App’x 429, 439 (6th Cir. 2018).
As an initial matter, this Court did not “commit[] manifest error by dismissing
GM’s claims with prejudice and denying GM the opportunity to file an amended
complaint to address the Court’s concerns.” (Motion 2 (emphasis in original).) GM
omits the crucial point that it never asked the Court for leave to amend—not when
it opposed FCA’s motions to dismiss and not at oral argument. Where, as here, a
-12-
“Plaintiff never filed a proper motion to amend [its] complaint” before judgment is
entered against it, a “district court d[oes] not abuse its discretion . . . by failing to
rule on a motion that was never before it.” Bunn v. Navistar, Inc., 797 F. App’x 247,
257 (6th Cir. 2020). Consequently, GM’s “argument that the district court should
have rescued Plaintiffs by sua sponte offering leave to amend the complaint is
simply misplaced.” Total Benefits Planning Agency, Inc. v. Anthem Blue Cross &
Blue Shield, 552 F.3d 430, 438 (6th Cir. 2008).
More fundamentally, contrary to GM’s assertion, leave to amend should not
be “freely” granted after a judgment has been entered against a plaintiff.
(Motion 13.) The Sixth Circuit “has been abundantly clear that, once judgment
issues, concerns about finality dilute the otherwise permissive amendment policy of
the Civil Rules.” Energy Conversion Devices Liquidation Tr. v. Trina Solar Ltd.,
833 F.3d 680, 692 (6th Cir. 2016). GM never even mentions the Sixth Circuit’s
“heav[y] burden” standard that applies in the post-judgment context. Mich. Flyer,
860 F.3d at 431.
Nor are the facts here anything like those in Bledsoe v. Community Health
Systems, Inc., 342 F.3d 634 (6th Cir. 2003) (Motion 14), which “concerned a
situation where the plaintiff included all of the relevant elements in his complaint
but lacked notice of a heightened pleading standard until the moment the district
court dismissed the complaint.” Energy Conversion, 833 F.3d at 692 (discussing
-13-
Bledsoe). Here by contrast, RICO’s direct causation standard was not “unclear or
debatable.” (Motion 14.) Anza was decided in 2006 and Hemi has been on the books
for a decade. Moreover, as in Energy Conversion, “[e]ven after [FCA] moved to
dismiss the complaint largely based on [GM’s] failure to plead [direct causation as
required by Hemi and Anza], [GM] did not amend the complaint,” but instead sought
leave to amend “[o]nly after the district court rejected [GM’s] argument and
dismissed the case under Rule 12(b)(6).” 833 F.3d at 691. Thus, the unique facts at
issue in Bledsoe are “not remotely this case.” Id. at 692.
III. GM’s alleged “new evidence” is wild conjecture and does nothing to cure
the deficiencies the Court identified in dismissing the Complaint.
GM asserts that it “should plainly be given leave to file its proposed
[Amended Complaint] in light of GM’s newly discovered and alleged evidence
confirming GM’s status as an intended and direct victim of Defendants’ unlawful
scheme.” (Motion 15-16.) Not only is GM’s “newly discovered evidence” the kind
of baseless speculation that courts should, and routinely do, ignore, but GM fails to
demonstrate that such evidence “clearly would have produced a different result if
presented before the original judgment.” Davis, 666 F. App’x at 440.
A. GM’s “new evidence” is nothing but conclusory speculation.
As explained above at pp. 1-3, GM’s allegations of “corporate espionage” are
not supported by a single well-pled factual allegation, let alone pled “with sufficient
particularity under Rule 9(b)” as required when alleging predicate acts of “money
-14-
laundering.” Arnold v. Alphatec Spine, Inc., 2014 WL 2896838, at *13 (S.D. Ohio
June 26, 2014). GM merely contends that it retained unspecified “third parties” with
unspecified “credentials” who discovered unspecified “reliable information” about
the existence of foreign bank accounts. (Karis Decl. ¶ 8.) But GM does not deign
to identify these third parties, state their credentials, or provide any basis to assess
whether the unspecified “information” they allegedly learned is in fact “reliable.”
For all anyone knows, “[p]erhaps these [unidentified] sources have axes to grind.
Perhaps they are lying. Perhaps they don’t even exist.” Higginbotham v. Baxter
Int’l, Inc., 495 F.3d 753, 757 (7th Cir. 2007) (Easterbrook, J.).
Nor does anything in GM’s proposed Amended Complaint support GM’s
zany allegations that “Ashton and Iacobelli infiltrated GM” to (i) “gather and funnel
highly confidential information to the FCA Defendants and their co-conspirators at
the UAW” (Motion 20), or (ii) “ensure that Ashton imposed higher costs on GM,
rather than the same benefits it provided to FCA.” (AC ¶ 88.)3 Instead, this
purported grand conspiracy rests solely on the unremarkable alleged fact that FCA—
3
Notably, when GM appointed Ashton to its Board of Directors in 2014, it had
nothing but praise for him, stating in a press release that “Joe brings a wealth of
knowledge from his work across many industries, especially his deep understanding
of how labor strategy can contribute to a company’s success.” (GM Press Release,
GM Nominates UAW VP Joe Ashton to Board of Directors (Apr. 25, 2014),
https://tinyurl.com/y2l2aazh.) Moreover, Ashton retired from the UAW when he
joined the GM Board (id.), and GM provides no explanation of how Ashton could
influence—much less control—the UAW’s bargaining positions when he no longer
was an officer of the union.
-15-
which operates through subsidiaries in more than 130 countries around the world—
had foreign bank accounts in some of the same countries as Iacobelli and Ashton.
(See supra at 2.) Even if true, that coincidence is insufficient to state a claim.
Indeed, GM’s theory is remarkably similar to allegations the Sixth Circuit
squarely rejected in 16630 Southfield. There, plaintiff sued a bank contending that
denial of his application to refinance a loan was discriminatory based on his Iraqi
origin. But the Complaint “allege[d] facts that are merely consistent with liability
(i.e., being Iraqi and being denied a loan extension) as opposed to facts that
demonstrate discriminatory intent.” 727 F.3d at 505. The inference that GM asks
the Court to draw—namely, that the existence of foreign bank accounts means those
accounts must have been used to facilitate “corporate espionage”—is even less
plausible. Although GM has been forced to retrench from loss-making businesses
in various jurisdictions, it is a virtual certainty that GM still has foreign bank
accounts, but that hardly is a basis to accuse GM of engaging in money laundering.4
The plaintiff in 16630 Southfield attempted to bolster his claim with
speculation, “alleging ‘upon information and belief’ that [the bank] has refinanced
delinquent borrowers who ‘were Caucasian’ or ‘not . . . members of minority
4
According to GM’s public filings with the U.S. Securities & Exchange
Commission, as of December 31, 2019, GM operates through subsidiaries in 35
countries. (See GM Form 10-K, Exhibit 21, https://tinyurl.com/y477tv4u). And GM
has subsidiaries (and presumably bank accounts) in many of the countries it contends
are hotbeds for money laundering, including Switzerland, Italy, and Singapore. (Id.)
-16-
groups.’” Id. at 506. GM similarly speculates “on information and belief” that FCA
used foreign bank accounts to “secretly” provide money to Iacobelli, Ashton, and
others “in exchange for intentionally infiltrating GM, both to impose asymmetrical
costs on GM through the 2015 collective bargaining agreement and to pressure GM
to merge with FCA NV.” (Motion 6-8.) But “[t]hese ‘naked assertions devoid of
further factual enhancement’ contribute nothing to the sufficiency of the complaint,”
and thus must be “ignore[d] when evaluating a complaint’s sufficiency.” 16630
Southfield, 727 F.3d at 506. Even if one accepted GM’s strained theory that the
existence of foreign bank accounts alone supports a conclusion that those accounts
were used to facilitate bribes or engage in money laundering, the proposed Amended
Complaint contains zero factual allegations as to what information Ashton and
Iacobelli supposedly passed on to FCA, who at FCA received that information, or
how the information supposedly “directly harmed GM” in negotiation of the 2015
collective bargaining agreement. (Motion 21.) Indeed, it is impossible that Iacobelli
sabotaged negotiation of that agreement from within GM because, as GM itself
confirms, it did not “hire[] Iacobelli to work in its labor relations department” until
“January 2016.” (AC ¶ 182 (emphasis added).)
All GM has is the ex cathedra pronouncement that foreign bank accounts must
have existed for the sole purpose of enabling FCA to orchestrate a nefarious plot to
injure GM. Again, “conclusory allegations, unsupported by facts, are not sufficient
-17-
to survive a 12(b)(6) motion.” Stuart v. Lowe’s Home Centers, LLC, 737 F. App’x
278, 282 (6th Cir. 2018). This is particularly true in the RICO context, where courts
should “not allow RICO plaintiffs leeway to continue on with their case in an attempt
to prove an entirely remote causal link.” Empire Merchs., 902 F.3d at 144.
B. GM’s “new evidence,” even if considered, would not “clearly”

lead to a “different result.”
GM’s proposed Amended Complaint still fails to state a valid RICO claim for
numerous independent reasons—even if GM’s speculative and conclusory new
allegations could be considered. As a result, GM’s “newly discovered evidence”
would not lead to a “different result.” Davis, 666 F. App’x at 440.
First, GM contends that “the newly discovered evidence confirms that GM
was the target of Defendants’ scheme.” (Motion 20.) But as explained above,
“specific intent to harm does not magically create standing or cause . . . injuries to
be direct.” Perry, 324 F.3d at 850. It is similarly irrelevant that GM says its “newly
discovered evidence” shows that its alleged “injuries were distinct” from those
incurred by rank-and-file FCA employees or the IRS. (Motion 12, 20.) The notion
that a plaintiff suffered a “unique” or “distinct” injury has no bearing on whether the
alleged injury “was directly caused by the defendants’ racketeering.” Empire
Merchs., 902 F.3d at 145-46.
-18-
Second, GM’s causation theories remain incompatible with the three Holmes
factors,5 including because plaintiffs alleging more direct injury than GM have
already sued (including rank-and-file members of the UAW and the U.S.
Department of Justice on behalf of the IRS), and GM’s claim that its labor costs were
increased by virtue of the conduct alleged in the proposed Amended Complaint will
lead to precisely the kind of “intricate, uncertain inquiries” that should not be
permitted to “overrun[]” the litigation. Anza, 547 U.S. at 460.
Third, according to GM’s new theory, FCA’s alleged conduct “harmed GM—
not FCA’s workers or anyone else—through FCA’s orchestration of the scheme
from within through a [GM] Board member and high-ranking labor relations
executive.” (Motion 21; see AC ¶ 4 (alleging that “only GM incurred” harm from
FCA’s alleged conduct).) GM has missed the boomerang effect of that contention.
If the singular purpose of FCA’s alleged actions was to harm GM and no one else,
as GM now contends, then the proposed Amended Complaint would need to be
dismissed because “a single scheme targeting a single victim” does not plead “an
actionable ‘pattern of racketeering activity.’” Bachi-Reffitt, 802 F. App’x at 918;
5
These factors include (i) whether there are more immediate victims with
incentive to sue, (ii) whether it is difficult to quantify the amount of the plaintiff’s
alleged damages, and (iii) whether there is a potential risk of multiple recoveries.
Holmes v. Sec. Inv’r Prot. Corp., 503 U.S. 258, 269 (1992); see GM, 2020 WL
3833058, at *8 (discussing Holmes factors).
-19-
see Vemco, Inc. v. Camardella, 23 F.3d 129, 135 (6th Cir. 1994) (no RICO liability
where there was a “single victim and a single scheme for a single purpose”).
* * *
As is evident from even a casual review, GM’s motion is not a serious legal
document filed in good faith. The evident purpose of GM’s motion is to tarnish the
reputations of FCA and certain of its officers and employees—an inexcusable
litigation tactic.
It is well-known that RICO claims have “damaging effects on the reputations
of individuals alleged to be engaged in RICO enterprises and conspiracies.” Wood
v. Gen. Motors Corp., 2015 WL 1396437, at *4 (E.D.N.Y. Mar. 25, 2015). For this
reason, the Sixth Circuit recently instructed district courts “[t]o deter” the “strong
temptation for plaintiffs to raise a RICO claim, even when the claim is obviously
frivolous,” by not “hesitat[ing] to impose Rule 11 sanctions as a sanction for
bringing frivolous RICO claims.” Bachi-Reffitt, 802 F. App’x at 919.
-20-
CONCLUSION
For the foregoing reasons, the Court should deny GM’s motion to alter or
amend the judgment.
August 10, 2020 Respectfully submitted,
/s/ Steven L. Holley

Thomas W. Cranmer (P25252) Steven L. Holley (N.Y. 1917830)
Matthew P. Allen (P57914) Matthew J. Porpora (N.Y. 4402798)
MILLER, CANFIELD, PADDOCK Jacob E. Cohen (N.Y. 4787271)
& STONE, PLC SULLIVAN & CROMWELL LLP
Counsel for FCA US LLC and Fiat Chrysler Automobiles N.V.
-21-
CERTIFICATE OF SERVICE
I hereby certify that on August 10, 2020, I electronically filed the foregoing
paper with the Clerk of the Court using the ECF system which will send notification
of such filing to all parties of record, and I hereby certify that I have mailed by United
States Postal Service the paper to the following non-ECF participants: None.
Respectfully submitted,
/s/ Steven L. Holley

Steven L. Holley (N.Y. 1917830)
SULLIVAN & CROMWELL LLP
125 Broad Street
New York, New York 10004-2498
Tel: (212) 558-4000
[email protected]
Counsel for FCA US LLC

and Fiat Chrysler Automobiles N.V.
August 10, 2020
-22-

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Case 2:19-cv-13429-PDB-DRG ECF No. 90 filed 08/10/20 PageID.

IN THE UNITED STATES DISTRICT COURT

FCA DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO

Thomas W. Cranmer (P25252) Steven L. Holley (N.Y. 1917830)

Counsel for FCA US LLC and Fiat Chrysler Automobiles N.V.

August 10, 2020

Preliminary Statement ........................................................................................... 1

I. The Court should deny GM’s request for reconsideration of this

A. Rehashing previously rejected arguments is not grounds for

B. This Court correctly applied the standard for pleading causation

II. GM was not entitled to an advisory opinion from this Court as to

A. GM’s “new evidence” is nothing but conclusory speculation .......... 14

B. GM’s “new evidence,” even if considered, would not “clearly”

Anza v. Ideal Steel Supply Corp.,

Arnold v. Alphatec Spine, Inc.,

Bledsoe v. Comm. Health Sys., Inc.,

Bridge v. Phoenix Bond & Indem. Co.,

Bunn v. Navistar, Inc.,

Carriuolo v. Gen. Motors Co.,

City of Cleveland v. Ameriquest Mortg. Sec., Inc.,

Clark v. United States,

Davis v. Prof’l Reps. Org.,

Empire Merchs., LLC v. Reliable Churchill LLLP,

Empress Casino Joliet Corp. v. Johnston,

Energy Conversion Devices Liquidation Tr. v. Trina Solar Ltd.,

Gen. Motors LLC v. FCA US LLC,

Hemi Grp., LLC v. City of N.Y.,

Hernandez v. City of Saginaw,

Higginbotham v. Baxter Int’l, Inc.,

Holmes v. Sec. Inv’r Prot. Corp.,

Jones v. Nat. Essentials, Inc.,

Leisure Caviar, LLC v. U.S. Fish & Wildlife Serv.,

Mich. Flyer LLC v. Wayne Cty. Airport Auth.,

Perry v. Am. Tobacco Co.,

Raub v. Moon Lake Prop. Owners’ Ass’n,

Stuart v. Lowe’s Home Centers, LLC,

Total Benefits Planning Agency, Inc. v. Anthem Blue

United States v. Burris,

Vemco, Inc. v. Camardella,

Wallace v. Midwest Fin. & Mortg. Servs., Inc.,

Winget v. JP Morgan Chase Bank, N.A.,

Wood v. Gen. Motors Corp.,

Fed. R. Civ. P. 12(b)(6) .................................................................................... 14, 17

Fed. R. Civ. P. 15 ............................................................................................... 4, 12

Fed. R. Civ. P. 59 ........................................................................................... passim

STATEMENT OF ISSUE PRESENTED

with prejudice to permit GM to file its proposed Amended Complaint, where GM

1. Fed. R. Civ. P. 59.

claims, or to amend that judgment to convert the dismissal of GM’s Complaint to be

“without prejudice,” and thereby permit GM to file its proposed Amended

accusations about a competitor that is winning in the marketplace.

in a “broad network” of “secret overseas [bank] accounts.” (Motion 2, 5, 7-8, 20-

factual support, is despicable. (E.g., proposed Amended Complaint (“AC”)

¶¶ 101(c), 101(d), 101(e).)

In addition to concocting an unfounded tale of “corporate espionage” that

Court of committing “manifest error” by dismissing the Complaint without granting

This motion is the latest example of the lengths to which GM is prepared to

fictional account of “corporate espionage” is based entirely on two unremarkable

1. FCA—a Dutch corporation headquartered in the United Kingdom, with