General Motors, LLC v. FCA US, LLC

RECOMMENDED FOR PUBLICATION

Pursuant to Sixth Circuit I.O.P. 32.1(b)

File Name: 22a0185p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

┐

GENERAL MOTORS, LLC; GENERAL MOTORS

│

COMPANY,

│

Plaintiffs-Appellants, > No. 20-1791

│

│

v. │

│

FCA US, LLC; FIAT CHRYSLER AUTOMOBILES N.V.; │

ALPHONS IACOBELLI; JEROME DURDEN; MICHAEL │

BROWN, │

Defendants-Appellees. │

┘

Appeal from the United States District Court

for the Eastern District of Michigan at Detroit.

No. 2:19-cv-13429—Paul D. Borman, District Judge.

Argued: March 4, 2021

Decided and Filed: August 11, 2022

Before: STRANCH, LARSEN, and NALBANDIAN, Circuit Judges.

_________________

COUNSEL

ARGUED: Paul D. Clement, KIRKLAND & ELLIS LLP, Washington, D.C., for Appellants.

Steven L. Holley, SULLIVAN & CROMWELL LLP, New York, New York, for FCA

Appellees. ON BRIEF: Paul D. Clement, Erin E. Murphy, Matthew D. Rowen, Julie M.K.

Siegal, KIRKLAND & ELLIS LLP, Washington, D.C., Hariklia Karis, Jeffrey Willian,

KIRKLAND & ELLIS LLP, Chicago, Illinois, for Appellants. Steven L. Holley, Matthew J.

Porpora, Jacob E. Cohen, Samantha F. Hynes, SULLIVAN & CROMWELL LLP, New York,

New York, Thomas W. Cranmer, MILLER, CANFIELD, PADDOCK & STONE, PLC, Troy,

Michigan, for FCA Appellees. Michael A. Nedelman, NEDELMAN LEGAL GROUP, PLLC,

Farmington Hills, Michigan, for Appellee Iacobelli. Judith S. Gracey, THE GRACEY LAW

FIRM, PLLC, Keego Harbor, Michigan, for Appellee Durden.

No. 20-1791 General Motors, LLC, et al. v. FCA US, LLC, et al. Page 2

_________________

OPINION

_________________

LARSEN, Circuit Judge. For almost a decade, executives at FCA US, LLC and its parent

company, Fiat Chrysler Automobiles N.V.,1 engaged in a pattern of racketeering, involving

bribery and corrupt labor relations with the United Auto Workers (UAW). General Motors

(GM) believes that it was the intended victim of the scheme and says it has suffered billions of

dollars in damages because of it. GM accordingly sued FCA, Fiat, and various executives under

the Racketeer Influenced and Corrupt Organizations Act (RICO). The district court granted

defendants’ motions to dismiss, concluding that GM had failed to establish that the alleged RICO

violations proximately caused its injuries. For the reasons stated, we AFFIRM.

I.

Because the case is at the motion to dismiss stage, the factual allegations in the complaint

are what matter, and we accept them as true. See Ohio Pub. Emps. Ret. Sys. v. Fed. Home Loan

Mortg. Corp., 830 F.3d 376, 382–83 (6th Cir. 2016).

In 2008, the country was facing a financial crisis. As losses mounted, some U.S. auto

companies looked to the federal government for help. The government gave financial relief to

General Motors Corporation (Old GM) and Chrysler through the Troubled Asset Relief Program.

That did not work, and Chrysler and Old GM filed for Chapter 11 bankruptcy in 2009. In

Europe, Fiat faced similar troubles. Fiat CEO Sergio Marchionne determined that Fiat had to

secure a partnership with one of the U.S. auto companies to survive. Marchionne determined

that “the UAW was Fiat’s bridge to establish a domestic footprint given the UAW’s significance

in the U.S. automotive market.” Complaint, R. 1, PageID 25.

Marchionne began to cultivate a relationship with the UAW, “quickly ma[king] the head

of the union’s Chrysler Department, [General] Holiefield, a strategic partner and soon thereafter

‘a true friend.’” Id. Marchionne sought to convince the UAW that a Fiat-Chrysler partnership

1Fiat Chrysler changed its name to Stellantis N.V. on January 17, 2021, after merging with Peugeot S.A.

Because the briefing and the lower court use Fiat and FCA, we do the same.

No. 20-1791 General Motors, LLC, et al. v. FCA US, LLC, et al. Page 3

would be good for the union, hoping that when it came time for Fiat to negotiate over a purchase

of Chrysler, the UAW would “throw its weight behind Fiat.” Id. at 25–26.

Fiat began to negotiate a partial purchase of Chrysler. As part of the purchase,

Marchionne demanded that the UAW support World Class Manufacturing (WCM), a system that

would make the Fiat/Chrysler facilities flexible, jettisoning “the union’s rigid job classification

system with its strict hierarchy and boundaries about who could do what.” Id. at 26–27.

Chrysler and the UAW agreed to Marchionne’s request to implement WCM. Similarly, the

UAW agreed to hire more temporary employees in place of hourly workers. And UAW

leadership agreed that, until 2015, it would “lift any cap or restraint on Tier Two workers”—“a

less expensive labor source,” comprising less-senior employees with a lower wage structure and

fewer benefits. Id. at 27. “Marchionne’s goal overall was to have as few constraints as possible

in his ability to operate Chrysler when it came out of bankruptcy.” Id. GM alleges that

“Marchionne implemented a bribery scheme to achieve this goal and help revive Chrysler and,

relatedly, harm GM.” Id.

Chrysler emerged from bankruptcy in June 2009 with Fiat owning 20 percent of its

equity, and the UAW owning 55 percent. Fiat had the right to purchase 40 percent of the

UAW’s equity interest in Chrysler.2 GM also emerged from bankruptcy, with the UAW owning

17.5 percent equity in the new company, making it the largest shareholder.

GM says the scheme began the following month, in July 2009, with a series of bribes.

Defendant Alphons Iacobelli, the former Vice President of Employee Relations at FCA, “and

other FCA officials began to transfer hundreds of thousands of dollars of Chrysler funds to

Holiefield.” Id. at 28. FCA paid for Holiefield’s wedding to Monica Morgan in Venice and

showered Holiefield with gifts, including a “custom-made Terra Cielo Mare watch worth several

thousand dollars.” Id. at 29.

2By 2013, Fiat had acquired a 58.5 percent stake in Chrysler, with the UAW owning the rest. In 2014, Fiat

acquired the UAW’s remaining stake in Chrysler. That is when the business entity officially became “FCA.” GM’s

complaint, however, uses “FCA” instead of Fiat when discussing all events after Fiat first acquired an interest in

Chrysler in 2009. We do the same for ease. And we use “FCA” to refer to all defendants, including the individual

defendants, when discussing the arguments presented to this court, and differentiate only when necessary.

No. 20-1791 General Motors, LLC, et al. v. FCA US, LLC, et al. Page 4

From there, “FCA began a long-running intentional scheme of improper payments to

certain UAW officials, funneled primarily through the [UAW-FCA National Training Center

(NTC)], made by FCA senior executives and agents (including with the knowledge and approval

of Marchionne) to influence the collective bargaining process.” Id. at 31. FCA used NTC’s

credit card and bank accounts to conceal payments and gifts to UAW officers and employees

worth over $1.5 million. The goal was “to obtain benefits, concessions, and advantages for FCA

in its relationship with the UAW.” Id. at 32. Defendant Michael Brown, FCA’s Director of

Employee Relations and NTC Co-Director, pleaded guilty to criminal charges for his role in the

fraud. He explained that “it was the intent of FCA executives to ‘grease the skids’ in their

relationship with UAW officials.” Id.

FCA funneled money to Holiefield and his wife, Morgan, through charitable

organizations and false front businesses, including Morgan’s photography business. Defendant

Jerome Durden, an FCA executive who served on the board of one of Holiefield’s charities,

assisted in these payments. The amounts were staggering. For example, FCA funneled

$425,000 to one business; Holiefield and Morgan used the money for personal expenses,

including closing costs on a house. The couple spent other payments made to these businesses—

in amounts of $386,400; $350,000; and $200,000 and so-on—to finish an in-ground pool, buy

clothes, and visit nightclubs and restaurants. On another occasion, the NTC directly paid off the

mortgage on Holiefield’s personal residence, sending a wire transfer for over $250,000.

FCA also encouraged UAW officials to use credit cards issued by the NTC. UAW

officials happily complied, “charging, for example, $1,259.17 for luxury luggage; $2,182 for a[n]

Italian-made Beretta shotgun; $2,130 for Disney World theme park tickets; over $1,000 for a pair

of Christian Louboutin designer shoes; and thousands of dollars in electronics and many more

such personal items.” Id. at 35. Other UAW officials, including former President Dennis

Williams, used FCA funds for lavish dinners and golf outings.

What did Chrysler get from the bribery scheme? GM says that because of FCA’s bribes,

“certain corrupt members of UAW’s leadership began providing Chrysler with labor peace and

competitive advantages to propel Chrysler’s performance without regard to the interests of UAW

membership.” Id. at 36. The bribes “were made for this very purpose: to obtain ‘benefits,

No. 20-1791 General Motors, LLC, et al. v. FCA US, LLC, et al. Page 5

concessions, and advantages’ not only in labor negotiations but also the implementation and

administration of at least the post-2009 CBAs, in 2011 and 2015.” Id. at 36–37. Also, “through

its bribery, FCA ensured that while these special advantages were conferred on FCA, the same or

similar advantages were not provided to . . . GM despite it seeking similar programs and

concessions.” Id. at 37. This, says GM, inflicted “massive direct damage on GM in the form of

higher costs.” Id.

FCA’s bribes secured the UAW’s agreement to FCA’s preferred WCM system. GM had

a similar, but inferior, program of its own (the Global Manufacturing System [GMS]). But

despite having “worked closely” with FCA to ensure the success of its system and to bring the

program on par with WCM, UAW leaders rebuffed GM’s “repeated efforts to collaborate . . . on

improvements to” GMS. Id. at 38–39. Without “buy-in” from the Union, GMS could not be as

successful as FCA’s WCM. Id. at 39. So, GM says that because of the bribes, the UAW never

“fully embraced” GM’s efforts to implement GMS. Id.

FCA’s bribes also secured it an advantage with respect to the hiring of lower cost

workers. A prior agreement had limited both FCA and GM in terms of the number of lower-

wage, Tier Two employees they could hire. But in 2009, the UAW and the auto companies

agreed to lift the cap, with an understanding that the cap would be reinstated in 2015. Because of

the bribes, the UAW privately told FCA that it would not actually reinstate the cap for either auto

company in 2015. Without this knowledge, GM stayed below the cap on Tier Two workers

between 2009 and 2015, while “FCA hired Tier Two workers with abandon, possessing the

incredibly valuable foreknowledge that it would not be penalized.” Id. at 40. “This difference

purchased through the bribery scheme provided FCA with a dramatic advantage with respect to

average labor costs.” Id. Similarly, because the UAW did not hold FCA to the contractual limits

on temporary workers (who are entitled to substantially less compensation than unionized

employees), FCA was able to lower its average hourly labor costs. GM received no such

concession on temporary workers. In addition, bribed UAW officials oversaw the UAW’s

grievance process. “Instead of zealously pursuing union grievances and health and safety

issues,” corrupt UAW grievance officials, “effectively” gave FCA “control” of “potentially

costly and disruptive labor grievances.” Id. at 41. “GM was denied any such corresponding

No. 20-1791 General Motors, LLC, et al. v. FCA US, LLC, et al. Page 6

benefit.” Id. Moreover, in 2014, through “‘side letter’ agreements” “outside of the traditional

bargaining process,” FCA obtained a favorable prescription drug agreement with the UAW,

which significantly reduced FCA’s healthcare costs. A similar prescription agreement would

have saved GM up to $20 million per year, but the UAW refused to agree to terms with GM.

Add this all up and the bribes bought FCA “a wage advantage to take FCA from worst to

first among the Detroit-based automakers” in terms of its labor costs. Id. at 42. “By 2015, FCA

[had] slashed its labor costs to $47 [per hour]—in the range of non-unionized foreign automakers

operating in the U.S.—and $8 less on average per hour than GM ($55).” Id. According to GM,

“FCA directed key UAW officials to deny similar labor advantages to GM, inflicting significant

additional costs on GM.” Id. at 43. The bribery continued when Dennis Williams took over as

president of the UAW in 2014. “Williams specifically directed his lieutenants and other corrupt

officials to accelerate their fraud, and use NTC funds and credit cards for travel, dining, and

other illegal purposes to improve the UAW’s budget.” Id. at 48. Williams would be a willing

participant in the rest of the scheme.

Marchionne also had long sought a merger with a U.S. auto company. “With

Marchionne as the lead, FCA schemed that it could effectively take over GM through a merger

(code-named ‘Operation Cylinder’), have Marchionne remain CEO of the combined companies,

and oversee the largest auto company in the world.” Id. at 49. It was in part for this reason that

Marchionne “had authorized the bribery of UAW leaders.” Id. Their “support was essential to

the success of Operation Cylinder” because “the UAW could effectively block a merger under

certain terms in the CBA.” Id. at 49–50. Marchionne approached GM about a merger in 2015,

but GM rejected the offer, even after bribed UAW executives pressed GM to move forward.

Bargaining over the 2015 collective bargaining agreements began in July 2015. By early

September, the UAW and GM had inched closer to a framework for a new agreement. Though

the UAW had initially demanded “nearly $1 billion” in total cost increases over the 2011 CBA,

the “new potential deal” reduced those costs by more than 20 percent. Id. at 54. But that

agreement never materialized.

No. 20-1791 General Motors, LLC, et al. v. FCA US, LLC, et al. Page 7

The auto companies and the UAW use “pattern bargaining, a strategy in which unionized

workers across an industry attempt to bargain uniform terms in their contracts.” Id. at 55.

“[T]he UAW selects one of the automakers as a ‘lead’ or ‘target’ company, with which the UAW

negotiates a CBA. Then, the UAW exerts pressure on the other two companies to use the first

agreement as a ‘pattern’ for negotiations.” Id. at 56. The UAW usually chooses the largest and

best performing automaker as the target because it allows the UAW to maximize its gains by

locking in favorable wage increases and signing bonuses. GM thought it would be chosen as the

target. Industry analysts agreed; they also believed FCA was not a viable target because it was

the smallest and least profitable of the companies.

Nevertheless, in September 2015, the UAW unexpectedly chose FCA as the target, a

position, according to GM, “secured through the years-long bribery scheme between FCA Group

and UAW leaders.” Id. at 58. Two days after selecting FCA as the target, “FCA and the UAW

reported that an agreement had been reached that, in Marchionne’s words, was a

‘transformational deal.’” Id. at 59. The UAW bargaining team celebrated the deal with a $7,000

dinner in Detroit—paid for with NTC funds.

The UAW’s FCA workforce rejected the agreement, however, sending the parties back to

the bargaining table. In early October, FCA and the UAW reached a new agreement. According

to GM, the terms of this deal “were structured to force enormous costs on GM.” Id. at 61. “[A]s

a pattern for a GM agreement, it would be vastly more expensive than the agreement GM had

negotiated prior to FCA’s selection as lead.” Id. In fact, it was twice as costly as the UAW’s

initial demands of GM, which GM had successfully negotiated down. FCA-UAW members

ratified the revised deal.

By this time, FCA and UAW leaders knew that the government had become suspicious.

GM says that “[t]hrough this ‘rich’ FCA-UAW labor contract, Williams and corrupt UAW

leaders were able to claim to the public, UAW members, and government investigators that

UAW leadership had obtained significant FCA concessions that could then be used in pattern

negotiation.” Id. at 62. “Marchionne, in turn, structured and agreed to these CBA terms to force

unanticipated higher costs on GM, which had a higher degree of more costly Tier One workers,

and further his takeover scheme.” Id.

No. 20-1791 General Motors, LLC, et al. v. FCA US, LLC, et al. Page 8

The UAW selected GM as the next target for negotiations, using “the fraudulently tainted

FCA-UAW pattern.” Id. “[T]he economic force of pattern bargaining and threat of strike forced

GM to largely concede FCA’s agreement as a pattern”; in November 2015, UAW workers

ratified the new agreement with GM. Id. at 63. “[A]lthough GM was able to reduce the

immediate cost impact of the FCA pattern by about $400 million, the final CBA between GM

and the UAW cost approximately $1.9 billion in incremental labor charges over four years—over

$1 billion more than the deal GM believed it had reached with the UAW before the UAW’s

selection of FCA as the lead.” Id. And “[a]lthough GM was able to successfully resist the FCA-

UAW leadership takeover scheme, substantial damage from the racketeering scheme had been

inflicted: direct injuries to GM that continue to reverberate and compound to this day, including

higher costs and lost investment initiatives.” Id.

By 2017, the jig was up. The Department of Justice criminally charged numerous FCA

executives and UAW officials for their roles in the conspiracy. “One by one, each of the

FCA and UAW co-conspirators entered guilty pleas admitting to a brazen scheme to

enrich themselves and corrupt the collective bargaining process through the FCA Control and

FCA-NTC Enterprises.” Id. at 66. That includes Iacobelli, Durden, and Brown, the three

individual defendants in this case. FCA also pleaded guilty for its role in the corruption scandal

and agreed to pay a $30 million fine. See David Shepardson, Fiat Chrysler to plead guilty,

pay $30 million to resolve U.S. criminal labor probe, Reuters (Jan. 27, 2021,

10:45 AM), https://www.reuters.com/article/us-usa-autos-labor/fiat-chrysler-to-plead-guilty-pay-

30-million-to-resolve-u-s-criminal-labor-probe-idUSKBN29W1ZA. For its part, the UAW

agreed to a consent decree that would put the union under federal monitoring for six years; a

judge approved the consent decree. See Breana Noble & Robert Snell, Judge approves

UAW consent decree; union has 30 days to propose monitors, The Detroit News

(Jan. 29, 2021, 7:35 PM), https://www.detroitnews.com/story/business/autos/2021/01/29/federal-

judge-approved-united-auto-workers-consent-decree/4317725001/.

On November 20, 2019, GM sued FCA, Fiat, Iacobelli, Durden, and Brown, asserting

three RICO claims against all defendants, one claim each under 18 U.S.C. § 1962(b), (c), and

(d); a claim for unfair competition under Michigan law against FCA and Fiat; and a claim for

No. 20-1791 General Motors, LLC, et al. v. FCA US, LLC, et al. Page 9

civil conspiracy against all defendants. The district court declined to exercise supplemental

jurisdiction over GM’s state law claims.3

All defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6) for

failure to state a claim. The district court granted the motions. Assuming that FCA had

committed the alleged RICO violations, the district court held that FCA’s alleged RICO

violations were either indirect or too remote to have proximately caused GM’s alleged injuries.

All of GM’s RICO claims therefore failed. The district court dismissed GM’s complaint with

prejudice.

GM filed a motion to alter or amend the judgment pursuant to Federal Rule of Civil

Procedure 59(e), arguing that newly discovered evidence showed that the scheme directly and

intentionally targeted it. GM asked the court to vacate its order or, in the alternative, allow it to

file an amended complaint. The court denied the motion, concluding that GM’s new evidence

was too speculative to warrant reopening the case and that there were no other clear legal errors.

GM timely appealed.

II.

We must first assess whether this case is properly before us. FCA argues that the

National Labor Relations Board (NLRB) has exclusive jurisdiction over GM’s claims because

they are based on conduct that arguably constitutes an unfair labor practice. FCA invokes the

doctrine of Garmon preemption, which gets its name from the Supreme Court’s decision in San

Diego Building Trades Council v. Garmon, 359 U.S. 236 (1959).4 Because FCA’s Garmon

argument potentially implicates the court’s subject matter jurisdiction, we address it before

proceeding to the merits. See Trollinger v. Tyson Foods, Inc., 370 F.3d 602, 608 (6th Cir. 2004);

3A Michigan state court dismissed all of GM’s claims against FCA. See David Shepardson, Michigan

judge tosses GM lawsuit against Fiat Chrysler, Reuters (Oct. 18, 2021, 5:55 AM),

https://www.reuters.com/business/autos-transportation/michigan-judge-tosses-gm-lawsuit-against-fiat-chrysler-

2021-10-17/.

4As this court explained in Trollinger v. Tyson Foods, Inc., the use of the word “preemption” to describe

the doctrine is a bit of a misnomer. 370 F.3d 602, 608 (6th Cir. 2004). “Garmon is more than a traditional

preemption doctrine . . . because when properly invoked it tells us not just what law applies (federal law, not state

law) but who applies it (the National Labor Relations Board, not the state courts or federal district courts).” Id.

No. 20-1791 General Motors, LLC, et al. v. FCA US, LLC, et al. Page 10

Int’l Longshoremen’s Ass’n. v. Davis, 476 U.S. 380, 393 (1986); Pulte Homes, Inc. v. Laborers’

Int’l Union of N. Am., 648 F.3d 295, 299 (6th Cir. 2011); but see Baker v. IBP, Inc., 357 F.3d

685, 688 (7th Cir. 2004) (holding that, when “[a]pplied to claims in federal court, and arising

under federal law,” Garmon does not affect a court’s subject-matter jurisdiction but is instead an

abstention doctrine, “allocating to an administrative agency the first crack at certain matters”).

“Sections 7 and 8 of the National Labor Relations Act protect certain labor practices

(such as organizing or joining a labor union, bargaining collectively, and engaging in concerted

activity, or refraining from engaging in any of these activities) and prohibit certain others (such

as interfering with a protected activity or coercing employees to join a union).” Trollinger,

370 F.3d at 608. Because Congress vested the NLRB “with primary jurisdiction to determine

what is or is not an unfair labor practice” under the NLRA, Kaiser Steel Corp. v. Mullins,

455 U.S. 72, 83 (1982), federal courts generally may not resolve claims based on “activity which

‘is arguably subject to § 7 or § 8 of the [NLRA],’ and they ‘must defer to the exclusive

competence of the [NLRB],’” id. (quoting Garmon, 359 U.S. at 245).

But there are exceptions to the NLRB’s primary jurisdiction. For example, “federal

courts may decide labor law questions that emerge as collateral issues in suits brought under

independent federal remedies” as “long as the statute does not conflict with §§ 7 or 8 of the

NLRA and . . . litigants do not circumvent the primary jurisdiction of the NLRB simply by

casting statutory claims [under §§ 7 or 8 of the NLRA] as violations of [an independent federal

law].” Trollinger, 370 F.3d at 609–10 (citations omitted). And Congress may also “expressly

carve[] out an exception to the [NLRB’s] jurisdiction.” Brennan v. Chestnut, 973 F.2d 644, 646

(8th Cir. 1992) (citing Vaca v. Sipes, 386 U.S. 171, 179–80 (1967) (citing cases)). Here,

Congress has done just that.

GM’s RICO claims are predicated on violations of a labor law—namely, 29 U.S.C. § 186

(also known as Section 302 of the Labor Management Relations Act (LMRA)), which prohibits

certain financial transactions between employers, employees and unions.5 It is one of two labor

5Section 186 of the LMRA is a criminal statute. Ohlendorf v. United Food & Comm. Workers Int’l Union,

Local 876, 883 F.3d 636, 640 (6th Cir. 2018). It does not create a private right of action, and the Attorney General

has the authority to enforce it. See id. at 640–43; In re WKYC-TV, Inc., 359 N.L.R.B. 286, 289 n.13 (2012).

No. 20-1791 General Motors, LLC, et al. v. FCA US, LLC, et al. Page 11

laws listed as RICO predicates in 18 U.S.C. § 1961(1).6 So the question is whether, by naming a

labor law as a RICO predicate, Congress “expressly carved out an exception to” the NLRB’s

jurisdiction. We answer: yes.

No circuit court has authoritatively addressed whether the NLRB retains primary

jurisdiction over RICO claims predicated on violations of § 186. Two have suggested in dictum,

however, that it does not. See Brennan, 973 F.2d at 646 (“[A] claimed violation of 29 U.S.C.

§ 186 would not be preempted because RICO includes violations of § 186 within the definition

of ‘racketeering activity’”); Tamburello v. Comm-Tract Corp., 67 F.3d 973, 977 (1st Cir. 1995)

(“The specific exceptions carved out in §§ 186 and 501(c) support the conclusion that Congress

intended that violations of labor laws other than § 186 [or § 501(c)] alleged as predicate acts are

preempted.” (alteration in original) (citation omitted)); see also Teamsters Local 372 v. Detroit

Newspapers, 956 F. Supp. 753, 759 (E.D. Mich. 1997) (stating that Garmon preemption does not

apply when “Congress has expressly carved out an exception to the NLRB’s jurisdiction,” such

as when it added § 186 as a RICO predicate). We agree.

Like our sister circuits, we are persuaded by a well-reasoned district court opinion that

confronted this very issue—Butchers’ Union, Local No. 498 v. SDC Investment, Inc., 631 F.

Supp. 1001 (E.D. Cal. 1986). See Brennan, 973 F.2d at 646 (calling Butchers’ Union the

“leading case” on whether federal courts may resolve RICO claims predicated on violations of

§ 186). Like the court in Butchers’ Union, we find it “hard to imagine that Congress would have

made § 186 a RICO predicate act without the intention of making violations of § 186, which

necessarily arise in the labor context, the basis of a RICO action brought in the district court.”

631 F. Supp. at 1007. Undoubtedly, a RICO claim predicated on § 186 violations will require

the resolution of labor law questions, “but that is simply a consequence of Congress making

§ 186 violations predicate acts for RICO purposes.” Id. at 1008. When it comes to the

jurisdiction of the NLRB, “Congress gets to make the rules—and change them.” Id. at 1006.

Although Congress designated the NLRB as the exclusive forum for consideration of most labor

The NLRB, however, has jurisdiction over unfair labor charges premised on a violation of § 186. See WKYC-TV,

Inc., 359 NLRB at 289 n.13; see also Ohlendorf, 883 F.3d at 643; Swanigan v. FCA US LLC, 938 F.3d 779, 785–86

(6th Cir. 2019).

6The other is 29 U.S.C. § 501(c), which pertains to the embezzlement of union funds.

No. 20-1791 General Motors, LLC, et al. v. FCA US, LLC, et al. Page 12

law questions, it “can and does create exceptions to that exclusivity.” Id. at 1006–07. This is

one of them.

FCA focuses on this court’s decision in Trollinger, which explained that “when a RICO

action depends upon a federal-law predicate offense and a violation of that predicate law may be

found only if the defendant’s conduct violates the NLRA, the federal district courts lack

jurisdiction under Garmon because the NLRA issues in the case would be anything but

collateral.” 370 F.3d at 610–11. Because the labor law issues in this case are hardly “collateral,”

FCA argues that Garmon preemption applies. But Trollinger did not address the question here—

whether, by expressly designating § 186 as a RICO predicate, Congress “has expressly carved

out an exception to the” NLRB’s jurisdiction. Brennan, 973 F.2d at 646. We hold that it has.

Accordingly, GM’s claims were properly before the district court.

III.

We turn to the merits. We review de novo the district court’s order dismissing for failure

to state a claim under Rule 12(b)(6). Rossborough Mfg. Co. v. Trimble, 301 F.3d 482, 489 (6th

Cir. 2002). “We construe the complaint in the light most favorable to the plaintiff, accept all

well-pleaded factual allegations as true, and examine whether the complaint contains ‘sufficient

factual matter, accepted as true, to state a claim to relief that is plausible on its face.’” Ohio Pub.

Emps. Ret. Sys., 830 F.3d at 382–83 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).

RICO provides a civil cause of action for treble damages to anyone injured “by reason

of” certain racketeering activity. 18 U.S.C. §§ 1964(c), 1962. To state such a claim, the plaintiff

must allege that the defendant’s violation was both a factual and proximate cause of his injury.

Holmes v. Sec. Inv. Prot. Corp., 503 U.S. 258, 266–68 (1992). Factual cause is established

“whenever a particular outcome would not have happened ‘but-for’ the purported cause.”

Bostock v. Clayton County, 140 S. Ct. 1731, 1739 (2020); see also UFCW Local 1776 v. Eli Lilly

& Co., 620 F.3d 121, 132 (2d Cir. 2010). And in the RICO context, proximate cause asks

whether “the alleged violation led directly to the plaintiff’s injuries.” Anza v. Ideal Steel Supply

Corp., 547 U.S. 451, 461 (2006); accord Holmes, 503 U.S. at 268–69. The directness

requirement rests on three premises: the difficulty of “ascertain[ing] the amount of a plaintiff’s

No. 20-1791 General Motors, LLC, et al. v. FCA US, LLC, et al. Page 13

damages attributable to the violation, as distinct from other, independent, factors”; the risk of

duplicative recoveries; and the availability of a more suitable plaintiff. Anza, 547 U.S. at 458–60

(quoting Holmes, 503 U.S. at 269); Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639, 654

(2008).

GM’s allegations can be grouped into three distinct categories of injuries. First, GM

alleges that from 2009–2015, FCA bribed the UAW to secure “unique competitive advantages.”

R.1, PageID 90. Second, GM alleges that, during the same period, FCA directed the UAW to

withhold those same benefits from GM. Finally, GM alleges that, through its bribes, FCA

weaponized the 2015 pattern-bargaining process to harm GM. We begin with the competitive-

advantage injuries.

A.

The Supreme Court’s opinion in Anza illustrates how to apply the directness requirement

to competitive-advantage injuries. In Anza, the Court considered a RICO claim brought by Ideal

Steel Supply against its competitor, National Steel Supply. 547 U.S. at 453–55. Ideal alleged

that National had cheated the State of New York by failing to charge sales taxes on some of its

transactions; that enabled National to unfairly lower its prices, which in turn cost Ideal sales. Id.

Those allegations, the Court held, were insufficient to establish proximate cause under RICO.

Id. at 461. “The cause of Ideal’s asserted harms . . . is a set of actions (offering lower prices)

entirely distinct from the alleged RICO violation (defrauding the State).” Id. at 458. Ideal’s

theory of causation, the Court explained, raised two of the concerns underlying the directness

requirement. First, delineating the extent to which the fraud, rather than other factors, caused

Ideal’s lost sales would be particularly complex; and second, there was a more directly injured

plaintiff, the State. Id. at 458–60.

Most of GM’s injuries are, like Ideal’s, assertions of an unfair competitive advantage.

According to GM, FCA’s bribes allowed it to commandeer the union grievance process, and to

secure the more efficient WCM system, a higher proportion of low-cost workers, and a cheaper

prescription-benefits program. In short, GM alleges that FCA’s corruption “helped buy a wage

advantage to take FCA from worst to first among the Detroit-based automakers” in terms of its

No. 20-1791 General Motors, LLC, et al. v. FCA US, LLC, et al. Page 14

labor costs. R. 1, PageID 42. GM does not say how FCA spent its wage savings: Did it slash its

prices, pay off debt, or invest in research and development? Nor does GM say what specific

harm resulted: Did it lose sales? Was it forced to cut profit margins? But the necessary

inference is that FCA’s unfair labor advantage hurt GM in the marketplace. That theory should

sound familiar. It is precisely the one rejected in Anza. See Anza, 547 U.S. at 458–61. As in

Anza, GM’s theory raises complex apportionment problems: What share of GM’s (unspecified)

marketplace injuries are attributable to FCA’s unfair labor advantage, rather than to “other,

independent[] factors”? Id. at 458 (quoting Holmes, 503 U.S. at 269). Thus, it is impossible to

“trace a straight line” from FCA’s conduct in violation of RICO to these injuries, precluding a

finding of proximate cause. See Wallace v. Midwest Fin. & Mortg. Servs., Inc., 714 F.3d 414,

420 (6th Cir. 2013). And, of course, there is a more “immediate” victim: FCA workers. Anza,

547 U.S. at 460. What didn’t work in Anza can’t work here.

Nor does it work under Hemi Group, LLC v. City of New York, 559 U.S. 1 (2010)

(plurality opinion). There, the City of New York taxed cigarette possession. Id. at 4. Hemi, an

out-of-state supplier, sold cigarettes online to residents of the City. Id. Hemi was not required to

collect the City tax, but the federal Jenkins Act required Hemi to submit its customer information

to the State of New York. Id. at 5. Hemi didn’t comply. Id. at 6. The City then sued Hemi

under RICO, arguing that “[w]ithout the reports from Hemi, the State could not pass on the

information to the City.” Id. at 9. Lacking customer information, the City could not collect the

tax from its residents. Id. The plurality found proximate cause lacking because the City’s harm

did not flow directly from the RICO predicate act (the failure to file Jenkins Act reports) but

rather from “the customers’ failure to pay their taxes.” Id. at 11. And there was a more

immediate victim (the State). Id. at 12. GM’s competitive-advantage theory of proximate cause

fails under Hemi Group for the same reasons that it fails under Anza.

GM argues that this case is different because FCA intended to harm GM. Whatever

purchase that formulation of proximate cause had at common law, see Restatement (Second) of

Torts § 435A; Hemi Grp., 559 U.S. at 23–25 (Breyer, J., dissenting), the Supreme Court has

squarely rejected it in this context. “A RICO plaintiff cannot circumvent the proximate-cause

requirement simply by claiming that the defendant’s aim was to increase market share at a

No. 20-1791 General Motors, LLC, et al. v. FCA US, LLC, et al. Page 15

competitor’s expense.” Anza, 547 U.S. at 460; Hemi Grp., 559 U.S. at 13. That is true

notwithstanding the Court’s statement in Bridge v. Phoenix Bond & Indemnity Co. that “one who

intentionally causes injury to another is subject to liability to the other for that injury.” 553 U.S.

at 657 (alteration omitted) (quoting Restatement (Second) of Torts § 870). While a later portion

of Bridge addressed RICO’s directness requirement, see id. at 657–58; Hemi Grp., 559 U.S. at

14, the Court discussed intent only in explaining that common law liability for fraud extended

beyond the party who relied on the defendant’s misrepresentation. See Bridge, 553 U.S. at 656–

57. We are highly skeptical that the unanimous Court in Bridge was silently overruling a key

holding of Anza in its discussion of traditional fraud principles. And if there were any room to

question our skepticism, the plurality opinion in Hemi Group erased it. See 559 U.S. at 12–13

(noting that, although the dissent in Anza thought proximate cause should turn on intent, “the

dissent there did not carry the day”); see also Empire Merchs., LLC v. Reliable Churchill LLLP,

902 F.3d 132, 145 (2d Cir. 2018) (after Anza and Hemi Group, “foreseeability and intention have

little to no import for RICO’s proximate cause test”); Slay’s Restoration, LLC v. Wright Nat’l

Flood Ins. Co., 884 F.3d 489, 493 (4th Cir. 2018) (focus of RICO inquiry is “directness,” not “on

whether the harm to the RICO plaintiff was a foreseeable result of the defendant’s conduct or

even whether it was ‘the intended consequence[] of [the defendant’s] behavior’” (first alteration

in original) (quoting Hemi Grp., 559 U.S. at 12)).7

Still, GM is right in at least one respect: Using an intermediary in a RICO scheme does

not alone preclude liability. Bridge held that the directness requirement was satisfied where a

bidder in a county auction sued a rival bidder, even though the rival’s scheme depended on first

duping the county. 553 U.S. at 657–58. The same was true when a mortgage company enlisted

the help of a crooked home appraiser to perpetuate lending fraud, Wallace, 714 F.3d at 416, and

when a political donor bribed a state’s governor to sign favorable legislation into law, Empress

Casino Joliet Corp. v. Johnston, 763 F.3d 723, 725 (7th Cir. 2014). These schemes, like many at

7Nothing in Wallace v. Midwest Financial and Mortgage Services. Inc., 714 F.3d at 416, suggests that an

injury that is foreseeable could satisfy RICO proximate cause even if the injury were indirect. Instead, Wallace is

best read consistently with Trollinger, which recognized that even if an injury is direct, “the causal link between the

injury and the conduct may still be too weak to constitute proximate cause—because it is insubstantial,

unforeseeable, speculative, or illogical, or because of intervening causes.” Trollinger, 370 F.3d at 614. In other

words, foreseeability may be necessary, but it is not sufficient.

No. 20-1791 General Motors, LLC, et al. v. FCA US, LLC, et al. Page 16

the heart of RICO conspiracies, use a middleman to accomplish their goals. See 18 U.S.C.

§ 1961(1) (bribery, extortion, money laundering, murder-for-hire). That fact alone does not

foreclose relief. What makes this case different, however, is the presence of an intermediate

victim. Despite falling prey to the defendant’s trickery, the county in Bridge was not injured in

any tangible, compensable way. 553 U.S. at 658 (recognizing that any reputational injury to the

county was too “speculative and remote”). The FCA workers, by contrast, are “more immediate

victim[s]” who are “better situated to sue.” Id. We join our sister circuits in recognizing this

critical distinction. Compare Empress Casino, 763 F.3d at 734 (finding proximate cause where

“[t]here was no more directly injured party standing between the [plaintiffs] and the alleged

wrongdoer”) with Empire Merchs., 902 F.3d at 144 (finding lack of proximate cause where

“New York State was a more direct victim of the smuggling operation”). GM’s theory,

therefore, is insufficient to establish RICO proximate cause.

B.

Perhaps sensing that its 2009–2015 injuries were doomed under Anza and Hemi Group,

GM alleges that FCA bribed union executives not only to give FCA certain concessions but also

to “deny similar labor advantages to GM.” R. 1, PageID 43. That theory suffers from a different

flaw—a lack of but-for causation.

FCA allegedly bribed the union to deny labor advantages to GM, but GM never asserts

that it would have received those advantages absent FCA’s bribes or that it was in any way

entitled to the benefits FCA received. Contra Bostock, 140 S. Ct. at 1739 (“[A] but-for test

directs us to change one thing at a time and see if the outcome changes. If it does, we have

found a but-for cause.”). Nor does GM allege that pattern bargaining was at play with respect to

these pre-2015 benefits. So even accepting as true GM’s allegation that FCA officials directed

UAW leaders to deny comparable benefits to GM, that fact doesn’t change the causation

analysis. GM has not alleged that it would have received such benefits absent the corruption. So

FCA’s bribes were not a but-for cause of the harm.

This may seem harsh to GM. While GM cleanly fought its way out of a once-in-a-

generation economic downturn, FCA bribed its way out. But GM’s inability to recover for the

No. 20-1791 General Motors, LLC, et al. v. FCA US, LLC, et al. Page 17

alleged denial of benefits follows from a straightforward application of elementary causation

principles. And its inability to recover for FCA’s illicit competitive advantage follows from

binding Supreme Court precedent. See Anza, 547 U.S. at 460; cf. id. at 474–75 (Thomas, J.,

concurring in part and dissenting in part) (criticizing the majority’s “restrictive proximate-cause

test” for foreclosing relief on competitive injuries that are “the principal concern of RICO”).

C.

That leaves GM’s allegations of injury stemming from the 2015 CBA negotiations.

Recall that, according to GM, FCA bought its way into the coveted “target” position for pattern

bargaining and negotiated two deals with the Union. The FCA workers rejected the first and

ratified the second. Then, using the second FCA deal as a template, GM and its workers reached

an agreement with GM that cost the company far more than its prior negotiations would have

predicted.

There are two ways to look at these facts. On one view, FCA, recognizing its relatively

weak financial position, wanted to be the target so that it could lock in a deal that kept its labor

costs low. That would sensibly explain why FCA workers rejected the first deal; it was not

labor-friendly enough. But if that is GM’s theory, it fails to satisfy proximate cause for the same

reasons as the other competitive-advantage injuries. Anza forecloses relief.

On the other hand, GM’s complaint seems to put forward a different theory regarding the

2015 CBA. According to GM, Marchionne spent more than a decade fixated on the idea of

merging with GM. In pursuit of that goal, FCA made several overtures to GM, used bought-and-

paid-for Union executives to influence GM’s Board, and amped up the pressure through the

press and private-capital campaigns. And the 2015 CBA negotiations were to be Marchionne’s

coup de grâce: FCA would purchase the first seat at the bargaining table so that it could give

away the farm, saddling GM with crippling labor costs and leaving it ripe for a takeover. Sure,

the deal would hurt FCA in the short-term, but Marchionne would get his prize.

Color us skeptical. But for the purposes of a motion to dismiss, we are satisfied that

GM’s factual allegations, taken as true, are plausible. Iqbal, 556 U.S. at 678. For one thing,

Marchionne’s overwhelming desire for an FCA–GM merger takes an otherwise irrational course

No. 20-1791 General Motors, LLC, et al. v. FCA US, LLC, et al. Page 18

of action “across the line from conceivable to plausible.” Bell Atl. Corp. v. Twombly, 550 U.S.

544, 570 (2007). For another, these CBAs are undoubtedly quite complex, making it plausible

that FCA could have structured the deal to hurt GM far worse than it hurt itself. Indeed, that

seems like a reasonable inference from GM’s allegation that FCA “structured and agreed to

[concessions] to force unanticipated higher costs on GM, which had a higher degree of more

costly Tier One workers.” R. 1, PageID 62. The upshot is that while the competitive-advantage

interpretation of these facts seems more likely, we are not convinced that it is such “an obvious

alternative explanation,” that GM’s alternate theory cannot clear the plausibility bar. Twombly,

550 U.S. at 567.

But GM isn’t out of the woods yet. Even accepting GM’s theory as true, the chain of

causation between FCA’s bribes and GM’s injury is still too attenuated. See Hemi Grp., 559

U.S. at 9. Consider what had to occur before the consequences of FCA’s bribe could have

reached GM: FCA had to buy the first seat at the bargaining table (that’s the RICO predicate);

but FCA workers rejected the first negotiated contract, so the UAW and FCA had to renegotiate

a more worker-friendly contract; then FCA workers had to ratify the renegotiated deal; the UAW

and GM then bargained on the basis of the renegotiated deal (GM admits it was able to partially

lessen the burden of the FCA contract); GM had to agree to a sufficiently attractive contract for

its workers, knowing that it was in a better financial position than FCA and could presumably

offer more than FCA did; and GM workers had to ratify the new contract. The chain leading

from FCA’s bribe to GM’s increased labor costs had to pass through the independent actions of

at least two independent parties—the FCA and GM workforces. So GM’s alleged harm rests on

“separate actions carried out by separate parties.” Id. at 11 (emphasis omitted). And that gives

rise to difficulties in assessing and apportioning fault, concerns central to the Court’s decisions in

Anza and Holmes. Would GM’s independent workforce have ratified the pre-negotiated deal if

GM had been first to the table? How much did the FCA workers’ rejection of the initial deal

contribute to GM’s alleged damages? Difficult questions like these distinguish GM’s theory

from the “straightforward” one in Bridge, where there were no “independent factors that

account[ed] for [the plaintiff’s] injury.” 553 U.S. at 658. At bottom, the directness requirement

“is meant to prevent these types of intricate, uncertain inquiries from overrunning RICO

litigation” and has “particular resonance when applied to claims brought by economic

No. 20-1791 General Motors, LLC, et al. v. FCA US, LLC, et al. Page 19

competitors.” Anza, 547 U.S. at 460. GM has failed to show that the predicate acts directly

caused its 2015 pattern-bargaining injuries. The district court did not err by dismissing GM’s

complaint on causation grounds.

IV.

Finally, GM argues that the district court erred by denying its motion to alter or amend

the judgment under Federal Rule of Civil Procedure 59(e). We review an order denying such a

motion for an abuse of discretion. Clark v. United States, 764 F.3d 653, 661 (6th Cir. 2014).

“Under Rule 59, a court may alter the judgment 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.” Id. (quotation marks omitted) (quoting Leisure Caviar, LLC v. U.S. Fish &

Wildlife Serv., 616 F.3d 612, 615 (6th Cir. 2010)).

GM argues that the district court erred by not allowing GM to amend its complaint based

on newly discovered offshore bank accounts in the names of various individuals involved in the

scheme. “To constitute ‘newly discovered evidence,’ the evidence must have been previously

unavailable.” GenCorp, Inc. v. Am. Int’l Underwriters, 178 F.3d 804, 834 (6th Cir. 1999).

GM says that the district court erred because leave to amend should be freely given and

that, generally, a plaintiff must be given one chance to amend the complaint when a court

dismisses based on purported pleading defects. But those conventions apply to pre-judgment

motions under Federal Rule of Civil Procedure 15. GM’s motion came after entry of the

judgment, and that makes a difference. Leisure Caviar, 616 F.3d at 615–16. “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.” Id. at 616 (citation omitted). So, “[w]hen a party seeks to

amend a complaint after an adverse judgment, it . . . must shoulder a heavier burden.” Id.

“Instead of meeting only the modest requirements of Rule 15, the claimant must meet the

requirements for reopening a case established by Rules 59 or 60.” Id.

GM argued before the district court that it was unable to obtain the evidence it now offers

due to the district court’s order denying limited discovery. We think that a fair point, and FCA

No. 20-1791 General Motors, LLC, et al. v. FCA US, LLC, et al. Page 20

does not challenge it. But, regardless, GM has not met its burden of showing that the district

court abused its discretion in denying the motion. The purported new evidence does not move

the needle. It confirms what we already knew—FCA was bribing UAW officials. The new

information? UAW officials might have been hiding large sums in foreign bank accounts. So

maybe the amounts of the bribes were more than originally thought. But that does not change

the nature of the scheme, only its size.

One name bears mention. GM uncovered an offshore bank account in former UAW Vice

President Joseph Ashton’s name, and from there infers that FCA bribed Ashton to harm GM.

Ashton was selected by former UAW President Dennis Williams and appointed by the UAW to

serve on GM’s Board from 2014 to 2017. GM characterizes the existence of the Ashton account

as “reveal[ing] that from 2010 to 2014, FCA and FCA NV likely made substantial payments to

Ashton.” Motion to Amend or Alter Judgment, R. 84, PageID 3000 (emphasis added). GM

alleges two separate theories of how Ashton harmed GM. First, GM says that Ashton, as lead

negotiator with GM from 2010 to 2014, was crucial in withholding the competitive-advantage

benefits from GM per FCA’s instructions. Second, GM says that FCA bribed Ashton to infiltrate

GM as a member of its Board and funnel GM’s secrets to FCA.

It is worth noting that GM does not say how Ashton’s account was funded, that there is

any connection between the various offshore accounts it has uncovered, or that it has evidence

that FCA bribed Ashton. Meanwhile, the Department of Justice has convicted Ashton for fraud

unrelated to FCA. See Former UAW Vice President Sentenced to 30 Months for Taking

$250,000 in Bribes and Kickbacks, U.S. Dep’t of Justice (Nov. 17, 2020),

https://www.justice.gov/usao-edmi/pr/former-uaw-vice-president-sentenced-30-months-taking-

250000-bribes-and-kickbacks.

Regardless, as for the allegations that Ashton harmed GM by withholding benefits from

2010 to 2014, at FCA’s instruction, that theory is not new, only the name of the actor is. As for

GM’s allegations that Ashton harmed GM once he joined GM’s Board, GM alleges only that

FCA bribed Ashton from 2010 to 2014 when he was with the UAW. See Motion to Amend or

Alter Judgment, R. 84, PageID 3000. GM does not say that it has evidence that FCA continued

to bribe Ashton once he renounced his UAW affiliation and joined GM’s Board. Any suggestion

No. 20-1791 General Motors, LLC, et al. v. FCA US, LLC, et al. Page 21

then that Ashton infiltrated GM and funneled its secrets to FCA is mere conjecture and not

supported by GM’s newly discovered evidence.

One last thing warrants attention. Above, we concluded that GM could not satisfy RICO

proximate cause for its competitive-advantage injuries because it failed to allege that it had any

right to, or legitimate expectation of, those benefits. GM’s proposed amended complaint, when

discussing Ashton’s role in the scheme and throughout, now contains conclusory allegations that

the UAW would have bestowed on a corruption-free GM the same competitive-advantage

benefits that it alleges FCA obtained only through bribery, although it fails to explain why the

UAW would have done so. So does this save GM? No, given the posture. These allegations

seem to be a direct response to the district court’s conclusion (like ours) that the complaint failed

to allege that GM had any entitlement to the competitive-advantage benefits that the UAW

withheld. As the district court explained, “[t]he allegations show that the ‘unique competitive

advantages’ at issue would not have been available to a company unwilling to bribe UAW

officials.” R. 82, PageID 2969–71. Rule 59(e) does not allow a plaintiff to use the district court

opinion “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, 616 F.3d at

616 (citation omitted). That is exactly what GM tries do here. Accordingly, the district court did

not abuse its discretion by denying GM’s Rule 59(e) motion.

***

We AFFIRM.