A federal judge from the Eastern District of Texas has approved a magistrate judge’s report that dismissed, in part, a private racing team’s claim against General Motors.
Plaintiff LG Motorsports claimed that General Motors (GM) fielded a Corvette team in the American Le Mans series, after initially telling the plaintiff that it had no plans to compete in the series.
While the court found that the defendant’s actions fell short of being anti-competitive, it did rule that the defendant could be liable for the driver leaving LG Motorsports and for other damages to the plaintiff’s business.
The controversy had its origins when LG Motorsports decided in 2007 that it would enter the GT2 racing class for modified sports cars. In anticipation of this, it purchased a Corvette C6 racing chassis built by Riley Technologies, GM’s official supplier, and allegedly secured assurances from GM that it would not enter the GT2 racing class.
But GM did field an entry and allegedly took steps that would block the plaintiff for competing alongside its entry.
Specifically, LG Motorsports alleged (http://lgmotorsports.com/gallery/albums/userpics/10002/filed%20doc%20GM_Mich.pdf) that the defendant’s actions “caused it to lose advertisement and sponsorship revenues, substantial investments made in hiring professional drivers, sales and business revenues from its retail business, the use of the Riley Corvette in FIA sanctioned events, and the value of the car itself.”
These actions, it charged, constituted a violation of the Sherman Act and the Texas Free Enterprise and Antitrust Act of 1983; unfair competition; tortious interference with existing and prospective business relations; business disparagement; and civil conspiracy.
Targeted in the suit, GM and Michelin moved to dismiss the claim, arguing that LG Motorsports had other options to race in GT2, as well as the fact that GM’s bankruptcy meant that the plaintiff had sued a company that by legal standards no longer existed.
The magistrate judge agreed, in part, with GM. “It may well be that GM…is engaged in unsportsmanlike conduct and that its actions are wholly petty and self-centered,” the court wrote. “But such actions do not rise to antitrust claims.”
However, the court did find that GM could be liable for the driver leaving LG Motorsports and other damages to plaintiff’s business, which includes selling tuning parts based on its race performance.
L.G. Motorsports, INC. v. NGMCO, INC., Corvette Racing, INC., Michelin North America, INC., and Doug Fehan; E.D.TX; CASE NO. 4:11CV11; 2012 U.S. Dist. LEXIS 29591; 3/6/12
Attorneys of record: (for plaintiff) Patrick William Powers, LEAD ATTORNEY, Peyton Healey, Powers Taylor LLP – Dallas, TX. (for NGMCO, Inc. Defendant) David A Ettinger, PRO HAC VICE, Honigman Miller Schwartz & Cohn, Detroit, MI; Timothy Allen Daniels, Figari Davenport & Graves, Dallas, TX. (for Michelin North America, Inc. Defendant) Thomas Monroe Bullion, III, LEAD ATTORNEY, Germer Gertz Beaman & Brown LLP, Austin, TX. (for Doug Fehan Defendant) Sally Christine Helppie, LEAD ATTORNEY, Eunice Kim Nakamura, Vincent Lopez Serafino Jenevein Dallas, Dallas, TX; Cynthia J Haffey, PRO HAC VICE, Butzel Long Detroit, MI; Sheldon Klein, PRO HAC VICE, Butzel Long – Michigan, Bloomfield Hills, MI.
