A Wayne County Circuit Court judge Monday temporarily restored the minority business status of Piston Group.
Judge David Groner issued a restraining order for the Michigan Minority Supplier Development Council to give the lucrative certification back to the Southfield-based auto supplier as litigation continues.
Piston Group, owned by former Detroit Pistons star Vinnie Johnson, sued the council in May to restore the certification after months of battling. The MMSDC pulled Piston Group's certification in February, questions whether Johnson runs the day-to-day operations of his large supplier, which operates four subsidiaries — Piston Automotive, Irvin Automotive, the Detroit Thermal Systems joint venture with Valeo and office furniture unit Airea. To be certified, a company must be 51 percent majority-owned by a person of color, actively managed in the day-to-day operations by a person of color and operate independently, according to the organization.
The heads of Piston Group's four divisions are white, which the MMSDC says violates its rules.
The Piston Group lawsuit alleges the pulling of its certification was improper because Johnson does run the day-to-day operations. The lawsuit also seeks monetary and punitive damages.
At stake is hundreds of millions of dollars in contracts for the more than $4 billion supplier. The certification is valuable as automakers look to expand spending on minority-business enterprises.
"We are delighted by the court's decision today ... We will continue efforts to vindicate Mr. Johnson and establish to the court that Vinnie Johnson owns, controls and manages Piston Group satisfying the necessary criteria to be certified as a MBE," said Cinnamon Plonka, a partner at Farmington Hills-based law firm Zausmer PC and representing Piston Group in court. "The Piston Group is a minority-controlled business under every applicable standard. Today's ruling will allow Mr. Johnson to continue to devote his energies to managing the day-to-day operations of all the Piston Companies as a certified MBE and supporting our valued customers with outstanding quality, delivery and service."
The MMSDC takes issue with the ruling.
"We are not pleased that a preliminary injunction was issued," the organization said in a statement emailed Tuesday morning to Crain's. "The Piston Group and its four subsidiaries simply do not have enough day-to-day involvement of minority persons in their senior management to meet minority business enterprise status under the MMSDC's standards. The MMSDC requires that Piston Group complies with NMSDC standards as is the case with any other company that seeks to benefit from MBE certification. The Piston Group has presented a lot of misinformation, some quite egregious, in their court filings and public statements. We have not yet had an opportunity to respond. We look forward to presenting all the relevant facts and circumstances at the appropriate time to the court and a jury, if the case proceeds that far."
Piston Group and the Michigan Minority Supplier Development Council have been sparring for months over the certification. The MMSDC denied Piston Group an appeal of the decision, leading to the lawsuit.
Piston Group, the largest black-owned auto supplier in the U.S., alleged in its lawsuit that the council and its president, Michelle Sourie Robinson, were "vindictive, willful, wanton or malicious" in their actions.
The lawsuit alleges Robinson has an ax to grind with Piston Group, most notably being upset the company hired away then-council executive Ervin in 2018. The lawsuit also alleges Robinson threatened to decertify Piston on several occasions after Johnson declined to donate $300,000 to an MMSDC initiative and failure to participate as a sponsor in the organization's golf outing fundraiser in 2019.
"... we take issue with the validity given to baseless allegations regarding retribution on the part of the MMSDC's president and CEO, Michelle Sourie Robinson," MMSDC said in the emailed statement. "She and the MMSDC have continued to help Piston Group, and Johnson, in particular, by inviting them to take part in numerous business development initiatives without interruption until 2021. Most importantly, Ms. Robinson does not vote on matters of certification. Such decisions are made by the MMSDC's corporate members, and ratified by the MMSDC board, which is comprised largely of Piston Group's current and potential customers."
In a statement to Crain's in May, Piston Group said it has 516 salaried employees in its offices across the U.S., 34 percent of whom are minorities and 31 percent women.
Piston Group is No. 1 on the 2020 Crain's Detroit Business list of largest African American owned businesses and Crain's list of largest minority-owned businesses. It was No. 4 on the Crain's Fast 50 list of fastest-growing companies in metro Detroit, and No. 5 on the Private 200 list of largest privately held companies in Southeast Michigan.