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Car-Racing Conspiracy Case Goes Full Throttle

(CN) - General Motors and Michelin cannot shake claims they blackballed a competitor's race-car tire choice, a federal judge ruled.

L.G. Motorsports builds racecars, competes in car-racing series and sells auto parts.

In a lawsuit now pending in the Eastern District of Texas, the company claimed that GM, Corvette Racing and Michelin conspired to prevent it from racing the No. 28 Corvette C6 in the GT2 class of the American Le Mans Series.

To race in various series a car must be homologated, or put together, in accordance with the series' governing bodies.

LG claims it bought a GT2 Corvette in spring 2008 based on GM's promise that it would obtain all the necessary approvals for homologation according to the Federation Internationale de L'Automobile racing series. GM also told LG it was not planning to race a car in the GT2 class.

But GM allegedly changed gears that fall and decided to race a GT2 class car in the series, while refusing to complete the homologation process for LG's car.

LG says it could not compete in the Federation Internationale series as a result, and GM further displayed a cutthroat competitiveness when it blocked LG from getting Michelin tires for its race car.

To secure its place in the winner's circle, GM and its in-house marketing arm, Corvette Racing, persuaded Michelin to not sell its tires to LG, according to the complaint.

LG claims Michelin tires are the best for race cars, and that its driver quit the team when Michelin allegedly made its products unavailable to LG. The resignation resulted in a substantial income loss, LG says.

GM moved to dismiss LG's claims, and Michelin filed an unopposed motion of joinder.

Last month, U.S. Magistrate Judge Don Bush recommended dismissing LG's antitrust claims. He said Michelin's refusal to sell did not prevent LG from getting other tires or racing different cars, and it does not harm overall competition.

"The court notes that antitrust laws are not designed to protect sporting events but rather to guarantee economic competition," Bush wrote.

"It may well be that GM LLC is engaged in unsportsmanlike conduct and that its actions are wholly petty and self-centered," he added. "But such actions do not rise to antitrust claims under either Section 1 or 2 of the Sherman Act."

LG's tortious-interference claim fared better, however, with Bush finding that GM's conduct over the tires may have caused LG's driver to quit and hurt profits.

Bush also refused to dismiss the claims of unfair competition under Texas law and conspiracy.

On March 30, U.S. District Judge Richard Schell adopted Bush's report. He gave LG 10 days to file an amended complaint and 15 days to submit a scheduling order for the remaining claims.

As Bush recommended in a separate report, Schell also dismissed claims against Douglas Fehan, the program manager of Corvette Racing.

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