General Motors, LLC, et al. v. FCA US, LLC, et al.

The defendants in this case (collectively, “FCA”) illicitly funneled millions of dollars to officers of the labor union they share with General Motors (“GM”). That is an undeniable fact backed by multiple criminal pleas by FCA and the union. FCA did so not just to decrease its own labor costs and to obtain preferential work rules, but for the specific purpose of increasing GM’s labor costs and imposing constraints to pressure GM to merge with FCA. The Sixth Circuit acknowledged that GM plausibly alleged that it was the intended target of that racketeering scheme and that GM was harmed in fact. But the court nevertheless held that GM could not proceed past the motion-to-dismiss stage under the Racketeer Influenced and Corrupt Organizations (“RICO”) Act because the scheme corrupted the union to harm GM and aspects of the scheme required the approval of GM workers. The court reached this counterintuitive conclusion that the intended victim of a RICO conspiracy could not sue despite this Court’s teaching that “[o]ne who intentionally causes injury to another is subject to liability” under RICO “to the other for that injury,” Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639, 657 (2008), and even though multiple other circuits have allowed the intended victims of RICO conspiracies to sue in comparable circumstances. The question presented is: Whether the direct and intended victim of a racketeering scheme who suffers injury by reason of the scheme is precluded from establishing proximate cause under RICO if the scheme by design involved the corruption or deceit of other parties.