White House warns court against scuttling Chrysler deal

The Obama administration encouraged the Supreme Court to leave in place its deal to finance a sale of Chrysler LLC to Italian automaker Fiat in a filing Monday.

Solicitor General Elena Kagen said that an application to the Supreme Court by Indiana investors to halt a final deal on Chrysler should be denied.

“Applicants make no meaningful effort to show that either of those findings is wrong, much less to demonstrate that review of those findings is an appropriate use of this Court’s resources,” Kagen wrote in a 26-page memo submitted to the Court on Monday. “The application for a stay should therefore be denied.”

Justice Ruth Bader Ginsburg, who oversees appeals from the New York area, will decide whether or not to refer the investors’ appeal of two lower courts’ decisions upholding the Chrysler deal, to the rest of the Court. Should she refer it to the rest of the Court, four of the nine members would have to support scheduling oral arguments on the matter.

In its filing, the Obama administration agrees with the investors’ argument that the Chrysler deal was an issue of national economic importance — but said that’s exactly why the court should deny a hearing.

“Applicants are left with the contention that this Court should grant review because the Chrysler bankruptcy is of national importance,” Kagen wrote. “As an economic matter, that is true, and blocking the transaction would undoubtedly have grave consequences.”